Explainer: Supreme Court Strikes Down Administrations IEEPA Tariffs; What It Means and How Refunds May Work

(as of Feb. 27, 2026)

Executive takeaways

• The Supreme Court held that IEEPA does not authorize the President to impose tariffs. 

• Venue matters: the Court agreed the Court of International Trade (CIT) has exclusive jurisdiction over these tariff disputes, and it vacated the D.C. district court case for lack of jurisdiction while affirming the Federal Circuit/CIT track.

• Collection has ended for new entries: CBP guidance says IEEPA duties stopped being collected for goods entered (or withdrawn for consumption) on/after 12:00 a.m. ET Feb. 24, 2026, and it identifies the affected executive orders.

• Refunds are not automatic yet: the Supreme Court did not set refund mechanics; the process is still unsettled and is headed back to the CIT and/or CBP administrative guidance.

1) What the Court Decided

The Cases

The ruling came in Learning Resources, Inc. v. Trump (consolidated with Trump v. V.O.S. Selections, Inc.) on February 20, 2026.

The Legal Holding (the “Why”)

In plain terms, the Court said:

• Tariffs are taxes, and the Constitution assigns tariff/tax power to Congress, not the President acting alone.

• The government’s argument leaned heavily on IEEPA’s authority to “regulate… importation.” The Court held those words can’t carry an open-ended power to impose tariffs of any size, scope, or duration.

• The Court also reasoned that treating “regulate” as a revenue-raising/taxing power creates constitutional problems because IEEPA also refers to “importation or exportation,” and taxing exports is constitutionally forbidden.

The Jurisdiction Holding (quietly huge for refunds)

The Court agreed the CIT has “exclusive jurisdiction” over these claims because they arise out of tariff law administration and modifications to the Harmonized Tariff Schedule.

Procedurally, the judgment:

• Affirmed the Federal Circuit/CIT merits decision in the V.O.S. Selections track; and

• Vacated and remanded the D.C. district court decision in Learning Resources with instructions to dismiss for lack of jurisdiction.

Practical implication: if you’re seeking money back, you should be thinking CBP + CIT, not federal district court.

2) What Tariffs are Affected (and what changed immediately)

CBP’s “Stop Collecting” guidance

CBP issued a Cargo Systems Messaging Service bulletin implementing an executive order titled “Ending Certain Tariff Actions.” It states that IEEPA duties “will no longer be in effect and will no longer be collected” for entries on or after 12:00 a.m. ET Feb. 24, 2026.

CBP’s bulletin lists the IEEPA-based actions being terminated for collection purposes, including (among others):

• EO 14193, 14194, 14195 (border/drug-related duties),

• EO 14257 (the “reciprocal tariff” action),

• plus other IEEPA-based tariff actions listed in the bulletin.

What is Not Automatically Affected

The CBP/Reuters reporting emphasized this does not change other tariff regimes such as Section 232 or Section 301 tariffs.

3) What the Ruling Means for Businesses and Individuals Who Directly Paid IEEPA Tariffs

Who Counts as a “Direct Payer” in Practice?

Usually:

• the Importer of Record, or

• another party shown in the entry/payment chain as the party who actually remitted duties to CBP (sometimes through a broker or courier account structure).

If you’re a downstream buyer who only paid higher prices to a supplier, that’s real economic harm, but it’s not the same thing as having paid a “duty” to the government. Refund systems typically track entries and duty payments, not downstream price effects.

What You Gained From the Ruling

• A clear merits ruling that the IEEPA tariff authority was unlawful—the key “liability” piece.

What You Did Not Automatically Gain

• An automatic check from Treasury/CBP. The Supreme Court did not set a refund program or order a broad refund procedure in its decision.

4) Refunds: What We Know Now (and what we don’t)

What We Know Now

1. No formal refund mechanism has been announced yet by CBP or the CIT (as of Feb. 25 in at least one detailed trade alert).

2. Refund pathways are being actively litigated.Plaintiffs’ counsel (Liberty Justice Center and others) have filed motions in the CIT seeking permanent injunctive relief that would (among other things) require the government to issue the directives needed to refund unlawfully collected tariffs with interest and direct CBP to begin issuing refunds.

3. There is a backlog of related cases at the CIT. Liberty Justice Center reports hundreds of related cases pending and stayed awaiting resolution in the lead case. Another trade alert notes a blanket stay on refund cases in the CIT (with V.O.S. Selections as the lead vehicle), and uncertainty about when that stay will lift.

4. CBP ended collection going forward but hasn’t said how it will refund the past.Reuters similarly reported CBP offered no refund details in its messaging and promised additional guidance.

What We Still Don’t Know (the big open questions)

• Will refunds be automatic (administrative mass refunds), or claim-based (you must file something), or lawsuit-based (you must be a plaintiff to get paid)?

• Scope of relief: can the CIT order relief that effectively applies “nationwide,” or only for parties before the court? This is expressly flagged as uncertain in practitioner commentary.

• Timing: some advisors warn it could be quick, or could take years, depending on litigation and administrative choices.

5) How to Seek a Refund: A Practical Playbook for Direct Payers (what you can do now)

Think of this as “get your proof and preserve your options.” The worst outcome is being right on the merits and wrong on the paperwork.

Step A: Build Your Refund Dataset (do this first)

At minimum, assemble:

• entry numbers and dates,

• CBP Form 7501 / entry summaries,

• proof of payment,

• invoices/packing lists/certificates of origin,

• and, critically, liquidation status and liquidation dates by entry.

If you don’t have the full trail, you may need to request it from your broker or consider a FOIA route.

Step B: Split Entries into “Unliquidated” vs “Liquidated”

This split drives which tools you can use.

1) Unliquidated Entries: Consider Post Summary Corrections (PSC)

One plausible administrative route discussed by trade practitioners is using CBP’s existing tools for unliquidated entries (including PSC).

Key timing/eligibility points (per one accounting/trade explainer):

• the entry summary must be accepted,

• cannot be under CBP review,

• must be paid,

• PSC changes generally must be submitted within 300 days from entry and up to 15 days before scheduled liquidation (whichever is earlier).

Reality check: Whether CBP will accept PSCs as the mechanism for IEEPA refunds is not confirmed; it’s a “possible mechanism” described by advisors, not an announced program.

2) Liquidated Entries: Protest May be an Option, but There’s Disagreement

A common refund tool in customs practice is a protest (often filed on CBP Form 19 through ACE) if filed within 180 days of liquidation, with the possibility of going to the CIT if denied.

However, at least one trade-law alert suggests protests may be unlikely or potentially “non-protestable” for this issue, given the CIT’s exclusive jurisdiction framing and the nature of the claim.

What to do with that conflict:

• If you are inside the 180‑day window, you should discuss with trade counsel whether a protest is strategically useful as a rights-preserving step, even if the ultimate path is CIT litigation.

3) If Refunds End up Being Lawsuit-Dependent: Protective CIT Filings May Matter

Multiple sources describe importers filing or considering protective actions at the CIT to preserve refund rights if the eventual remedy is limited to parties who sue.

One trade alert also notes a view that importers may have up to two years (described as running to February 2027 from the initial IEEPA tariff implementation) to file an action under 28 U.S.C. § 1581(i) if individual litigation is required.

Separately, another commentary suggests a two-year posture may apply to CIT recovery for liquidated entries under 28 U.S.C. § 2636 (with timing nuances by entry).

Translation: even if you don’t sue immediately, you should treat time limits as real and get a tailored deadlines map for your entries.

Step C: Prepare for Electronic Payment Mechanics

Advisors are flagging that CBP has been moving toward electronic refunds (ACH) rather than paper checks, meaning your importer/broker payment profiles and banking details need to be clean.

Step D: Contract and Pass-Through Cleanup (don’t skip this)

Before money starts moving, review:

• tariff pass-through clauses,

• pricing adjustments,

• who “owns” the refund economically (importer vs customer),

• assignment/agency language with brokers/couriers.

PwC’s “actions to consider” list specifically calls out reviewing contractual tariff pass-through provisions and coordinating across trade/tax/finance/legal.

6) FAQ

Q: Does the Supreme Court decision mean CBP must refund everyone automatically?

A: Not yet. The Court decided legality and jurisdiction, but did not prescribe refund mechanics, and multiple sources say the refund process remains uncertain.

Q: Are IEEPA tariffs still being collected on today’s entries?

A: CBP guidance says no for goods entered/withdrawn for consumption on or after 12:00 a.m. ET Feb. 24, 2026.

Q: Who should be planning refund claims?

A: Primarily the parties that directly paid duties to CBP (commonly the importer of record). Downstream parties may need contractual remedies rather than a direct CBP refund lane.

Q: What should we do this week?

A: Inventory duties paid, gather entry documentation, identify liquidation status/dates, and map PSC/protest/CIT timing options while we wait for CBP/CIT guidance.

7) Evolving Issue

Because the refund pathway is evolving, companies and individuals that directly paid IEEPA duties should prepare a complete entry-level record, identify time-sensitive administrative options (PSC/protest windows where applicable), and evaluate whether a protective CIT posture is warranted depending on litigation developments and the scope of any eventual relief.