Client alert: Update on IEEPA tariff refunds

On February 20, 2026, the US Supreme Court issued a landmark 6–3 tariff decision in Learning Resources, Inc. v. Trump.^[1] In its much-awaited ruling, the Court held that the International Emergency Economic Powers Act (“IEEPA”) did not authorize the President to impose tariffs. The decision invalidated tariffs imposed by the Trump Administration under the IEEPA and opened the door to potentially substantial refunds for affected businesses, individuals and others. 

Notably, the Court’s ruling left the logistics of issuing refunds to the Court of International Trade (“CIT”) and the U.S. Customs and Border Protection Agency (“CBP”). It did not address the legality of tariffs imposed under alternative statutory regimes. 

This alert clarifies how affected parties can claim refunds for the IEEPA tariffs and what to expect going forward.   

The Supreme Court’s holding in Learning Resources

In its decision in Learning Resources, the Supreme Court unanimously held that the authority to impose tariffs is a core taxing power vested in Congress. ^[2]

Where the Justices parted ways was whether, under the major questions doctrine, the statutory authorization to “regulate . . . importation” under the IEEPA grants the Executive Branch unilateral authority to impose duties or tariffs. ^[3]  A majority of the Court invalidated both categories of tariffs imposed under the IEEPA: (1) first, tariffs that had been justified as addressing drug trafficking and immigration concerns, and (2) second, so‑called “reciprocal” tariffs that had been imposed broadly on imports from numerous trading partners. As Justice Gorsuch pointed out in his concurrence, the IEEPA “did not clearly surrender to the President the sweeping tariff power he seeks to wield.” ^[4]

As a result, the Court’s decision immediately implicated billions of dollars in tariffs that had been unlawfully collected under the IEEPA since 2025. 

Open questions impacting refund claims

Despite its breadth, the Learning Resources decision did not resolve the following critical issues:

• The refund mechanism or timetable for returning unlawfully collected tariffs under the IEEPA;
• The legality of tariffs imposed pursuant to other statutory authorities—such as Sections 122, 232, or 301 of the Trade Act; and
•  Future potential exposure under additional alternative tariff regimes.

The emerging refund landscape

A wide range of manufacturers, importers, retailers and wholesalers may qualify for refunds. This could include manufacturers of shoes, handbags, scarves, perfumes and liquor.  It could also include sellers and re-sellers of a broad range of goods.

Following the Supreme Court’s decision, on March 4, 2026, Judge Richard Eaton, a long-serving jurist on the CIT, issued an order instructing the CBP to issue refunds “with respect to any and all unliquidated entries that were entered subject to the IEEPA duties.” ^[5]

It is still early in the refund process.

In a CIT court filing, the Government suggested that it could not immediately pay the full amount of the refunds - which are estimated at hundreds of millions of dollars - because its existing procedures and technology were not suited to doing so. ^[6]

The CBP has thus started work on an Automated Commercial Environment (“ACE”) system - called Consolidated Administration and Processing of Entries (“CAPE”) - in order to process these refunds. The CBP noted in a court filing that it hoped to complete the system by mid-April 2026. ^[7] Once operational, impacted companies can use the CAPE portal to submit IEEPA refund requests. ^[8]

Despite the development of an automated IEEPA refund system, there are still several uncertainties surrounding claims for refunds. First, the government may further delay the IEEPA refund process by appealing the CIT’s order. Second, the CIT’s order covers all unliquidated and all non-final liquidated entries—leaving unaddressed whether finalized liquidated entries (many of which are informal) spanning past the 180-day protest period will also qualify for refunds.^[9] This is notable because some entries that are subject to IEEPA refunds: 1) may have been liquidated by the CBP and are currently subject to a 180-day clock prior to finalization, or 2) may have been finalized and are thus technically outside the scope of the CIT’s order directing the CBP to process IEEPA refunds.

Additional tariff authority

In addition, the legality of tariffs imposed under alternative statutory regimes remains in flux. 

As an immediate response to the Supreme Court decision, the Trump Administration imposed a 10% global tariff, spanning the period February 24, 2026 to July 24, 2026, by invoking Section 122 of the Trade Act of 1974.^[10] Those tariffs can last for only 150 days unless Congress approves an extension. 

In an interview, Treasury Secretary Scott Bessent stated: “It’s my strong belief that the tariff rates will be back to their old rate within five months.”^[11]

On March 5, 2026, 22 State Attorneys General filed suit in the CIT challenging this sweeping action.^[12] This lawsuit is just one of many pending legal actions disputing the remaining tariff regimes that have been imposed by the Trump Administration since taking office in 2025. It is possible that further refunds could be available in the future should courts invalidate these other tariff regimes.

How Withers can help

Withers regularly advises business owners, importers, and investors in navigating complex regulatory and financial recovery issues arising from government action, including customs and duty issues. Our team is actively monitoring all tariff regimes for updates impacting our clients. We are well prepared to assist individuals and companies assess and apply for IEEPA refunds, pursue recovery through the CIT where appropriate, and plan for continued trade exposure under alternative statutory authorities. 

As the refund process continues to develop, in our view, businesses that act early and strategically will be better positioned to recover unlawfully collected tariffs and manage their future trade risk. Similarly, companies that were secondarily impacted by tariffs, such as service providers who were not paid or who provided discounts and purchasers who paid premiums, may also benefit from tracking these issues and considering whether they have a right to recoupment.