On February 20, 2026, the U.S. Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. The decision invalidates $160 billion in collections through February 20 and eliminates what would have been $1.4 trillion in tariff revenue through 2035.
If you think this ruling simplifies your tariff exposure, you're reading it wrong. Within hours of the decision, President Trump signed a proclamation imposing a 10% global tariff under Section 122 of the Trade Act of 1974, effective February 24, 2026. On February 21, he announced plans to increase that rate to 15%. Tariff exposure didn't disappear. It shifted legal foundations.
The Court's reasoning turned on statutory construction, not constitutional limits. Chief Justice Roberts, writing for the majority, held that IEEPA's authority to "regulate importation" does not include the power to impose tariffs. The statute never mentions "tariffs," "duties," or "taxes." In nearly 50 years, no president had used IEEPA to impose tariffs: they relied on tariff-specific statutes like Section 301 or Section 232.
Three justices went further, invoking the "major questions" doctrine. Where Congress delegates authority involving "vast economic and political significance," particularly over a core congressional power like taxation, the delegation must be explicit. IEEPA lacks that clarity.
The ruling strikes down all IEEPA-based tariffs. That includes the reciprocal tariffs imposed in April 2025, the trafficking and immigration tariffs related to fentanyl, and the tariffs on China, Canada, and Mexico imposed between February and April 2025.
Section 232 and Section 301 tariffs remain in effect. Section 232 tariffs alone will raise $635 billion over the next decade, costing U.S. households an average of $400 in 2026. Those collections continue uninterrupted.
The new 10% tariff under Section 122 took effect February 24, 2026. Section 122 authorizes the president to impose a temporary import surcharge up to 15% ad valorem for a period not exceeding 150 days without congressional action. This tariff expires July 24, 2026, unless Congress extends it.
Section 122 has never been invoked before. The administration structured it to exclude goods previously exempted from IEEPA tariffs: USMCA-qualifying goods from Canada and Mexico, goods subject to Section 232 tariffs, critical minerals, pharmaceuticals, certain electronics, and 1,109 product exceptions listed in Annex II. Steel, aluminum, and copper imports are also exempt.
Treasury Secretary Bessent stated that combining Section 122, Section 232, and forthcoming Section 301 tariffs "will result in virtually unchanged tariff revenue in 2026." The Office of the U.S. Trade Representative announced new Section 301 investigations into unfair trading practices by other countries.
The Court did not address whether refunds must be issued or how reimbursement should work. That question returns to the U.S. Court of International Trade. Nearly 2,000 importers had already filed cases at the CIT seeking refunds before the Supreme Court ruled.
On January 8, 2026, the administration stipulated it would refund IEEPA tariffs for all current and future similarly situated plaintiffs following a final and unappealable CIT decision ordering refunds. The stipulation covers IEEPA tariffs on Brazil and India, which were not part of the Supreme Court litigation.
Refund procedures depend on liquidation status. For unliquidated entries, importers can file a Post-Summary Correction electronically to amend data and claim refunds. For liquidated entries, the fastest route is filing a claim directly with the CIT. For entries where the books have closed, importers may need to file an administrative protest within 180 days of the liquidation date.
U.S. Customs and Border Protection cannot cease collecting tariffs based solely on the Supreme Court opinion. CBP requires a directive from the executive branch.
As of February 23, CBP still required IEEPA tariff codes to release goods. Lori Mullins, director of operations at Rogers & Brown Custom Brokers, confirmed: "Customs has not removed the requirement to report the IEEPA tariff codes in order to obtain a release of goods, so for cargo to continue moving, the IEEPA tariffs are still being reported on entries."
An estimated 211,000 containers valued at $8.2 billion that arrived in U.S. ports between Friday and Sunday will still be subject to IEEPA tariffs until CBP updates its systems. The executive order stated that IEEPA tariffs "shall no longer be in effect and, as soon as practicable, shall no longer be collected."
The Trump administration has negotiated trade framework deals with 12 countries and trade agreements with seven countries, all premised on trading partners' desire to escape IEEPA tariffs or secure lower rates. The Supreme Court ruling generates uncertainty about those deals, including agreed-upon tariff rates. The legal foundation for those negotiations no longer exists.
1. Continue Paying. Until CBP issues a CSMS message updating its systems, report IEEPA tariff codes to obtain release of goods. The proclamation ordering termination of IEEPA collections says "as soon as practicable."
2. Separate Your Tariff Categories. Section 232 and Section 301 tariffs remain in effect. Do not confuse duties paid under those authorities with IEEPA collections. Your refund claims depend on accurate categorization.
3. Determine Liquidation Status. Pull a report of all entries subject to IEEPA tariffs. Flag which are unliquidated versus liquidated. Refund procedures differ based on status.
4. Register for Electronic Refunds. Confirm that your customs broker has registered with the CBP electronic refund portal. Processing refunds for $160 billion in collections will strain administrative capacity. Early registration positions you ahead of the queue.
5. Prepare Section 122 Filings. The new 10% tariff takes effect February 24. Review the 1,109 product exceptions in Annex II to determine which of your imports qualify for exemption. USMCA-qualifying goods from Canada and Mexico, goods subject to Section 232 tariffs, and critical minerals are excluded.
More than 1,000 businesses filed for refunds before the ruling. That number will grow significantly.
For help navigating IEEPA refunds or Section 122 compliance, contact Transmodal at (201) 316-1600 or info@transmodal.net.