February 20, 2026|Client Alerts
By Akana K. J. Ma, John C. Ramig, Seth K. Trimble, and Sonja Arndt-Johnson
On February 20, 2026, the U.S. Supreme Court issued a landmark decision holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs.
This decision invalidates the Reciprocal and Fentanyl based tariffs imposed under IEEPA and represents a significant limit on executive authority over trade policy. For companies that have paid substantial tariffs under these measures, the ruling opens the door to potential refund claims and related recovery strategies and throws into disarray international trade deals predicated on the IEEPA tariffs.1
Key Holdings
1. Tariffs Are a Core Congressional Power
The Court reaffirmed that tariffs are a form of taxation reserved to Congress under Article I of the Constitution.
2. IEEPA Does Not Authorize Tariffs
The Court rejected the government’s argument that IEEPA’s authority to “regulate … importation” includes the power to impose tariffs, and that the government must rely on clear statutory authorization
- The statute does not reference tariffs or duties
- “Regulate” does not include taxation
- No historical practice supports such authority
3. No Emergency or Foreign Affairs Exception
The Court rejected arguments that emergency powers or foreign affairs considerations justify broader executive authority in this context.
Primary tariff authority remains with Congress even when national emergencies are declared.
As a consequence, many international trade deals with countries finalized under IEEPA tariffs may be renegotiated.
Practical Impact for Businesses
Immediate Implications
- IEEPA-based tariffs are unlawful and cannot be sustained going forward
- Ongoing enforcement and collection of such tariffs is expected to cease
- Supply chain pricing and contract assumptions tied to these tariffs may need to be revisited
Refund Opportunities
The most significant impact for many businesses is the potential recovery of previously paid tariffs.
Companies that imported goods subject to IEEPA tariffs may have viable claims for refunds, subject to procedural requirements and timing considerations.
As discussed in our prior alert, refund recovery will likely depend on:
- Whether claims were timely filed
- Whether entries remain open or can be challenged
- The mechanisms used by Customs and Border Protection to process refunds
Recommended Actions
In light of this decision, companies should act promptly to preserve and maximize recovery. Buchalter has already initiated actions on behalf of clients at the U.S. Court of International Trade (CIT) in order to recover IEEPA-based tariffs.
Actions to Take:
1. Identify all entries into US ports since February 2025 that were subject to IEEPA tariffs;
2. Do not confuse duties paid under other U.S. laws, such as Section 232 or 301 tariffs under other US laws.
3. Determine if entries are unliquidated or already liquidated, as the procedures for claiming a refund under existing CBP regulations vary for liquidated versus unliquidated entries. For unliquidated entries, a Post-Summary Correction is an administrative process whereby importers can electronically amend data and claim refunds for duties submitted at the time imports subject to IEEPA tariffs entered a U.S. port. If an entry has already liquidated, importers historically filed an official Protest with CBP to claim a refund, however a claim filed with the U.S. Court of International Trade may now be the most expedient route for liquidated entries under the IEEPA.
4. Ensure that the importer’s import broker has registered with the US CBP electronic refund portal.
5. Importers are urging the Trump Administration to issue guidance on a duties refund process, especially for those importers who have not filed Complaints with the US Court of International Trade previously challenging the IEEPA tariffs, however the government has yet to indicate what it will do.
If your business has been impacted by IEEPA-based tariffs or if you have questions regarding the content of this alert, please contact any of the authors of this alert:
Akana K. J. Ma (international trade attorney): ama@buchalter.com
John C. Ramig (international trade attorney): jramig@buchalter.com
Seth K. Trimble (litigation attorney): strimble@buchalter.com
Sonja Arndt-Johnson (litigation attorney; CIT admitted): sarndtjohnson@buchalter.com
Conclusion
The Supreme Court’s decision represents a significant shift in the balance of trade authority and creates meaningful opportunities for businesses to recover substantial tariff payments.
Given the potential financial impact and procedural complexity, companies should act quickly to assess exposure, preserve claims, and pursue recovery strategies.
1 The dissenting opinion noted that while these specific tariffs were invalidated, the ruling does not fully prevent the president from utilizing other legal authorities to impose future tariffs.
This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.
