Supreme Court Invalidates IEEPA Tariffs: What Importers Should Do Now

Key Takeaways

• The Supreme Court ruled that the International Emergency Economic Powers Act does not authorize presidential tariffs, holding that tariff authority rests with Congress under Article I of the Constitution. This decision immediately invalidates IEEPA-based duties but does not affect tariffs imposed under Sections 232 or 301.
• Importers must act quickly to preserve refund rights. Recovery depends on liquidation status: unliquidated entries may allow administrative correction, while liquidated entries require filing a formal protest within 180 days or refund claims may be permanently barred.
• Tariff risk is not over. Although IEEPA tariffs are invalid, the administration retains alternative trade authorities, including Section 232 and Section 301, making proactive exposure modeling and compliance planning critical.

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The Supreme Court of the United States has held that the International Emergency Economic Powers Act of 1977 (“IEEPA”) does not authorize the president to impose tariffs. The Court concluded that IEEPA’s authority to “regulate . . . importation” does not include the power to impose duties, which fall within Congress’ Article I taxing authority. The ruling immediately affects companies that paid duties under IEEPA and raises practical questions about refunds, protests, and future tariff exposure. This alert focuses on what importers should do now.

Immediate Actions for Importers

1. Quantify IEEPA duty exposure.
2. Identify which entries are liquidated vs. unliquidated.
3. Calendar 180-day protest deadlines immediately.
4. Download and preserve ACE data now.
5. Confirm Importer of Record standing.
6. Prepare for potential replacement tariffs under Sections 232 or 301.

What the Decision Means and What It Does Not

What it Does

• Invalidates tariffs imposed under IEEPA.
• Confirms that tariff challenges fall within the exclusive jurisdiction of the U.S. Court of International Trade (“CIT”).

What it Does Not Do

• Automatically issue refunds.
• Invalidate tariffs imposed under Section 232, Section 301, or other trade statutes.
• Prevent the administration from pivoting to alternative tariff authorities.

Refund recovery will proceed through established customs procedures.

Refund Strategy: Practical Framework

The key operational question is simple:

Has the Entry Liquidated?

Liquidation status determines the refund pathway.

1. Unliquidated Entries

If an entry remains unliquidated, duty liability is not yet final. This typically provides the most efficient path to recovery. Importers may be able to:

• File a Post-Summary Correction (“PSC”) in ACE.
• Seek liquidation extensions where appropriate.
• Amend entry data administratively.

Recommended Action:

• Immediately generate a report of all unliquidated IEEPA entries.
• Preserve correction rights.
• Avoid unintended liquidation where exposure is material.

2. Liquidated Entries

Once an entry liquidates, duty liability becomes final unless challenged. To preserve refund rights:

• Step 1: File a formal protest within 180 days of liquidation.
• Step 2: If denied, consider filing suit in the CIT.

Missed protest deadlines generally eliminate recovery. Given the potential volume of claims, disciplined deadline tracking is critical.

3. Informal Entries

Lower-value shipments are often deemed liquidated at time of payment. These may require immediate protest analysis if within the 180-day window.

4. Standing: Who Controls the Refund?

Refund rights typically belong to the Importer of Record. Companies should confirm:

• Which entity was designated as Importer of Record.
• Whether brokers or affiliates were listed.
• Who holds protest and litigation standing.

Complex distribution structures require careful review.

5. Documentation: Preserve the Record Now

Refund recovery depends on documentation. Importers should secure:

• CBP Form 7501 entry summaries
• Proof of duty payment
• ACE exports
• Bond documentation
• Classification and origin support

Download ACE data immediately. Historical access can become more difficult during high-volume refund environments.

Litigation Considerations

High-value exposures may warrant a coordinated litigation strategy. Key considerations:

• Whether to seek accelerated disposition of protests.
• Whether to participate in consolidated CIT proceedings.
• Whether test-case litigation may shape broader industry recovery.

We expect structured refund guidance from CBP, but timing remains uncertain.

Ongoing Tariff Risk

The Court’s ruling is limited to IEEPA. The administration retains authority under:

• Section 232 (national security)
• Section 301 (unfair trade practices)
• Other Trade Act provisions

Importers should prepare for the possibility of revised or replacement tariff measures.

Practical Checklist for Trade Teams

Within the Next 7 Days

• Run ACE report of all IEEPA entries.
• Categorize by liquidation status.
• Flag entries within 180 days of liquidation.
• Confirm Importer of Record designation.

Within the Next 30 Days

• File protective protests where appropriate.
• Evaluate PSC opportunities.
• Assess potential financial statement impact.
• Model exposure under alternative tariff regimes.

Looking Ahead

This is a significant separation-of-powers ruling with substantial commercial implications. It does not signal the end of aggressive trade policy. Refund implementation will likely evolve through agency guidance and litigation. We are closely monitoring developments and advising clients on:

• Protest strategy
• Refund modeling
• CIT litigation planning
• Replacement tariff risk analysis
• Executive and board-level briefings

Please contact our Global Trade & Sanctions team for a tailored exposure and recovery strategy.