The Tax Times: Supreme Court Kills Emergency Tariffs: What Importers Must Do Now

On February 20, 2026 the Supreme Court struck down President Trump's right to issue tariffs in Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026).

The Court held that IEEPA does not give the president authority to impose tariffs. The decision emphasized several reasons:

1. Congressional intent and structure:
When Congress delegates tariff authority, it does so explicitly and with constraints. IEEPA contains no such language or safeguards.

2. Nature of tariffs:
Tariffs are distinct from regulatory tools like “compel” or “prohibit.” They function as taxes raising revenue for the Treasury and therefore fall outside the spectrum of regulatory powers granted by IEEPA.

3. Predecessor statutes and prior cases:
The Court rejected reliance on the Trading with the Enemy Act and the Yoshida International decision, noting these do not establish a binding or consistent meaning transferable to IEEPA.

4. Historical wartime precedents:
Wartime authorities involving tariffs do not apply in peacetime and cannot justify extending IEEPA’s scope.

5. Other Supreme Court precedents:
Prior cases such as Algonquin and Dames & Moore involved different statutory frameworks and did not address tariffs, making them inapplicable here.

Finally, Justice Kagan, joined by Justices Sotomayor and Jackson, agreed that IEEPA does not authorize tariffs but wrote separately to say the Court could resolve the case without invoking the major-questions doctrine.

The decision sharply curtails tariff authority under IEEPA, unwinds a large tranche of existing “emergency” tariffs, and pushes any new tariffs back into more traditional (and constrained) trade statutes.^[1]^[2]^[3]

What tariffs are directly affected

· All tariffs whose sole statutory basis was IEEPA are invalid going forward; agencies must stop assessing and collecting them once the ruling takes effect.

· Lower courts had already struck down billions of IEEPA‑based duties, a figure the Supreme Court’s ruling now effectively confirms nationwide.

· Emergency‑style “global” tariffs (broad country and product coverage, imposed by presidential proclamation after an emergency declaration) are no longer available under IEEPA at all.

Practical impact on importers and prior payments

· Importers that paid IEEPA‑based duties may be able to seek refunds where they preserved rights (e.g., protests, protective refund claims, or participation in the test cases), with exposure measured in the tens of billions.

· Commentary anticipates significant refund litigation and administrative processes, but relief will not be automatic for parties that did not timely file claims or protests.

· For businesses, landed costs on affected products should fall once the tariffs are removed, easing some input‑price pressure and improving margins or consumer pricing, depending on pass‑through.

Impact on future presidential tariff power

· The ruling confirms that tariffs are treated as an exercise of the taxing power, so the president needs clear, specific delegation; IEEPA’s “regulate importation” language is insufficient.Him him

· “Emergency tariff risk” is materially reduced: a president cannot declare a national emergency and then use IEEPA as a blank check for broad, open‑ended tariffs.

· Future tariff actions must rely on traditional authorities like Section 201 (safeguards), Section 232 (national security), Section 301 (unfair trade), or Section 122 of the Trade Act of 1974, all of which contain scope, rate, duration, and procedural limits.

Strategic and policy implications

· Congress regains leverage over large‑scale tariff programs; any future across‑the‑board tariff schemes will likely require new legislation or substantial modification of existing statutes.

· For trade planning, companies can place less weight on IEEPA‑based “emergency” tariff scenarios and more on targeted, process‑heavy actions under Sections 201/232/301, which are easier to monitor through investigations and notices.

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