IEEPA Tariffs Unwound: What the Supreme Court Decision Means for Importers Now

Key Takeaways

• In Learning Resources, Inc., et al. v. Trump, the Supreme Court ruled that tariffs imposed under IEEPA were not authorized, opening the door to more than $160 billion in refunds across 53 million+ shipments
• The decision does not impact other major tariff regimes, including Section 301 and Section 232
• The CIT in Atmus Filtration, Inc. v. United States has confirmed that refund eligibility extends beyond litigants to all entry types, including entries where liquidation is final
• U.S. Customs and Border Protection is building the CAPE refund system within ACE, with Phase 1 targeting unliquidated and recently liquidated entries; refunds will be electronic only, requiring ACH enrollment
• Companies should act now: set up your ACE portal, enroll in ACH for electronic refunds, organize entry data, and assess exposure for phased CAPE filing opportunities.

Guest author Bryce Judy – Tarifflo

What Is IEEPA and Why It Matters Now

If the recent wave of tariff headlines has felt disjointed, that is because the legal foundation behind them has been anything but straightforward. At the center of it is the International Emergency Economic Powers Act (IEEPA), a statute originally designed to give the president authority to respond quickly to national emergencies tied to foreign threats and economic activity. Historically, that authority has been used to freeze assets or restrict transactions. It was not designed to impose tariffs.

That distinction is more than academic. Tariffs are taxes, and the power to tax sits with Congress. The use of IEEPA to impose tariffs created a legal tension that has now been resolved in a way that could have real financial consequences for importers.

The Supreme Court Draws a Clear Line

In early 2026, in Learning Resources, Inc., et al. v. Trump, the Supreme Court addressed that tension directly. The Court held that IEEPA does not authorize the imposition of tariffs. In practical terms, the government relied on a statute that does not support that type of action.

The result is significant. A large body of tariffs imposed over the past year under IEEPA authority has effectively been invalidated. For businesses that paid those duties, this creates a potential refund opportunity that is substantial in scale. Total refund exposure is estimated at more than $160 billion in illegal tariff costs across more than 53 million shipments.

At the same time, the Court stopped short of prescribing how refunds should be administered. That has left the Court of International Trade and federal agencies to work through the mechanics in real time, which is where much of today’s uncertainty sits.

What Remains Fully Intact

Despite the scope of the ruling, it is narrow in application. It applies only to tariffs imposed under IEEPA. Other tariff regimes remain unchanged and fully enforceable.

This includes Section 301 tariffs tied to China, Section 232 tariffs related to national security concerns such as steel, aluminum, and now copper, and antidumping and countervailing duties. These are grounded in separate statutory authorities that were not part of the Court’s analysis.

In fact, the government has already begun shifting strategy. Some of the invalidated tariffs are being replaced using alternative legal frameworks. Recent developments include expanded tariff measures in the pharmaceutical sector and a significant expansion of Section 232 duties. On April 2, 2026, the President issued a proclamation imposing 10 to 50 percent additional duties on the full customs value of steel, aluminum, and copper articles and their derivatives from all countries, effective April 6, 2026 (HTSUS headings 9903.82.02 through 9903.82.17). Notably, this is the first time copper has been brought under Section 232 authority. For goods outside Chapters 72, 73, 74, and 76, a 15 percent metal-content threshold by aggregate weight applies; goods below that threshold are not subject to the additional duties. CBP has also indicated that new smelt-and-cast reporting requirements for copper will be required once ACE functionality is available. The net effect is not a reduction in tariff exposure, but a reconfiguration of where and how that exposure exists.

Where Exposure Is Most Likely

The companies most affected by the invalidated IEEPA tariffs tend to be those importing goods that were captured under broad, country-based or “reciprocal” measures. This includes a wide range of consumer products, electronics, industrial components and manufacturing inputs, particularly from China, Mexico and Canada.

From a practical standpoint, the fastest way to identify exposure is through import data. Entries reflecting HTS classifications in the 9903.01 or 9903.02 series are strong indicators that duties were assessed under the IEEPA framework. For many businesses, these tariffs were layered across supply chains rather than isolated to a single category, which means the total exposure may be more significant than initially assumed.

Government Response and Implementation in Progress

The government response is active but still evolving. The Court of International Trade, in Atmus Filtration, Inc. v. United States, has indicated that refunds should not be limited to companies that participated directly in litigation, which meaningfully broadens the potential pool of eligible claimants.

At the same time, the administrative challenge is substantial. Customs and Border Protection is working through tens of millions of import entries and building the infrastructure needed to process claims through the Automated Commercial Environment (ACE). Specifically, CBP is developing the Consolidated Administration and Processing of Entries (“CAPE”) system within ACE to administer IEEPA duty refunds. CAPE is being rolled out in phases. Phase 1 will accept unliquidated entries and entries liquidated within the preceding 80 days (within the 90-day statutory reliquidation window under 19 U.S.C. § 1501), with CBP estimating up to 45 days for processing from acceptance of a validated entry. Entries with final liquidation are expected to be addressed in subsequent phases. Refunds will only be delivered via electronic payment.

Complicating matters further, the administration is pursuing a dual-track approach. While agencies work to return improperly collected duties, new tariff measures are being implemented under alternative authorities to maintain broader trade policy objectives. That overlap is contributing to confusion in the market and underscores the need for a coordinated response at the company level.

What Companies Should Be Doing Now

This is a moment where preparation will directly impact outcomes. The most important step is to get your data in order early. Import entry records, including CBP Form 7501 details, HTS classifications and duty payment dates, will drive both eligibility and timing.

Equally important is ensuring your ACE account is active and fully functional. Importers must also enroll in the ACH refund program within ACE, as CBP has confirmed that refunds will only be delivered via electronic payment. That system will serve as the primary channel for filings and communication, and any gaps there will create unnecessary delays.

From there, companies should develop an internal estimate of refund exposure. Understanding the magnitude of potential recovery, including interest, is critical for planning and prioritization. Not all claims will move at the same pace, so having a clear view of where the largest opportunities sit allows for a more focused approach.

Segmenting entries is also key. Unliquidated entries are generally the most straightforward and likely to move first. Under CAPE Phase 1, entries subject to reconciliation, drawback claims, open protests, or lacking ACE filing status are excluded. Entries with “Suspended,” “Extended,” or “Under Review” status, including AD/CVD entries and warehouse withdrawals, will be accepted in Phase 1 but processed differently; CAPE will remove the IEEPA HTS codes but will not liquidate or process refunds for those entries until further action by CBP or the Department of Commerce. Recently liquidated entries that remain within a protest window still present viable opportunities. Notably, because entries subject to an open protest are excluded from CAPE Phase 1, importers may want to prioritize CAPE submissions over filing protests at this stage. Older entries may require more complex strategies, potentially including litigation depending on how the administrative process develops.

Timing will matter. As the refund process is implemented in phases, companies that are prepared to file early with clean, well-supported data are likely to see faster results.

At the same time, this is not just a backward-looking exercise. With new tariffs already emerging in sectors such as pharmaceuticals and the expansion of Section 232 duties to cover copper alongside steel and aluminum at rates of 10 to 50 percent, businesses should be reassessing sourcing strategies, evaluating tariff engineering opportunities and aligning tax, customs and supply chain functions more closely. Companies should also review their HTS classifications against the new 9903.82.02 through 9903.82.17 headings to understand where IEEPA refunds may be partially or fully offset by new Section 232 liability on the same goods. The environment remains dynamic, and those who stay proactive will be best positioned to navigate what comes next.