By: Francesca Jaubert
When President Trump’s second term in office began, he issued multiple executive orders to address two separate emergencies using the IEEPA statute.[1] The first involved a threat to public health caused by the influx of illegal drugs from Mexico, Canada, and China.[2] The drug trafficking tariffs against Canada and Mexico were at 25% for most non-USMCA goods and at 10% for China.[3] The second threat involved the undermining of critical supply chains in the United States.[4] These tariffs were nicknamed the “Liberation Day” tariffs and varied in amounts based on the types of products and country of origin.[5] Over time, the administration amended the new U.S. tariff regime to include tariff adjustments for trading partners who entered a “Trade and Security Agreement” with the U.S.[6] This new regime was upended when the Supreme Court issued a ruling in Learning Resources Inc. v. Trump[7] on February 20, 2026, finding all IEEPA tariffs unconstitutional.[8] The Supreme Court combined two cases from small businesses and states that challenged the constitutionality of tariffs President Trump issued under IEEPA.[9] In order for a President to act under IEEPA, they must first identify an unusual and extraordinary threat originating outside the United States and must declare an emergency, after which the President is authorized by Congress to take a multitude of actions that may address the issue, except for extending the authority to tax.[10] Many of the Justices agreed this issue should be analyzed under the Major Questions Doctrine to review whether Congress had clearly indicated with statutory language the intent to authorize the President to use tariffs under IEEPA.[11] But the majority decision only concludes that of all the actions permitted under IEEPA, raising revenues is not one, and “the fact no other President has found such power in IEEPA is strong evidence that it does not exist”.[12]
President Trump responded to this decision by issuing Executive Order 14389, “Ending Certain Tariff Actions” under IEEPA, and issuing a new presidential proclamation, “Imposing a Temporary Import Surcharge to Address Fundamental Payments Problems” under §122 of the Trade Act of 1974.[13] When the President authorizes a tariff under § 122, the tariff cannot exceed 15% and will stay in effect for 150 days unless Congress chooses to extend the tariff.[14] Customs and Border Patrol (CBP) announced a new 10% tariff rate against imports from all countries based on President Trump’s new proclamation.[15] However, the President took to his social media platform Truth Social to announce “his intent to raise this tariff rate to 15% in the near future.”[16]
While the tariff regime remains in flux, a larger question arises from the Supreme Court’s failure to address tariff refunds in the Learning Resources decision.[17] With over $130 billion already collected in IEEPA duties, the details of how the government will issue refunds to businesses will likely be left to lower courts like the International Trade Court to figure out.[18] Currently, more than 2,000 tariff refund-related cases remain pending as companies rush to preserve their refund claims from expiring.[19] Since import procedures require many itemized documents, importers believe, in theory, that refund procedures should be quick and simple.[20] However, at this time, it is unclear whether affected businesses will need to file in court to receive refunds or if CBP will establish an administrative process to conduct these refunds over time.[21] Previous refund cases for smaller amounts resulted in the Court of International Trade establishing a “claims-resolution procedure” so exporters could apply for refunds from the government over a two-year process.[22] Another solution offered by amicus brief authors pointed to a previous case where CBP offered automatic processing of refunds for importers that paid higher tariff rates during a lapse of the Generalized System of Preferences program.[23]
The International Trade Court can use any of these solutions to address this potentially massive refund. However, the Court could also work with CBP and other parts of the government to create a new solution that addresses the large and complex IEEPA tariffs.[24] On March 4, 2026, the International Trade Court began the refunding process by ordering CBP to “liquidate [any and all unliquidated entries that were entered subject to the IEEPA duties] without regard to the IEEPA duties.”[25] While there is no clear answer as of yet, businesses must keep up with the second Trump administration’s changing tariff regime, especially when a refund may be on the horizon.
[1] See Exec. Order No. 14193, 90 Fed. Reg. 9113 (Feb. 7, 2025) (“Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border”); Exec. Order No. 14194, 90 Fed. Reg. 9117 (Feb. 7, 2025) (“Imposing Duties to Address the Situation at Our Southern Border”); Exec. Order No. 14195, 90 Fed. Reg. 9121 (Feb. 7, 2025) (“Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China”); Exec. Order No. 14257, 90 Fed. Reg. 15041 (Apr. 7, 2025) (“Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits”).
[2] See generally Exec. Order No. 14193, 90 Fed. Reg. 9113 (Feb. 7, 2025) (addressing illicit drugs entering the United States from the northern border); Exec. Order No. 14194, 90 Fed. Reg. 9117 (Feb. 7, 2025) (addressing illicit drugs entering the United States from the southern border); Exec. Order No. 14195, 90 Fed. Reg. 9121 (Feb. 7, 2025) (addressing the opioid supply chain in China).
[3] See William Burkhart & Keigh Hammond, Cong. Rsch. Serv., R48549, Presidential 2025 Tariff Actions: Timeline and Status 6–7 (2026). See generally Diego Bitar, Christopher Hernandez-Roy & Earl Wayne, USMCA Review 2026, CSIS (Aug. 18, 2025), https://www.csis.org/analysis/usmca-review-2026 [https://perma.cc/8KXP-87E3] (explaining how USCMA provides preferential treatment to imported goods manufactured across North America).
[4] See Exec. Order No. 14257, 90 Fed. Reg. 15041 (Apr. 7, 2025).
[5] See id.
[6] See Exec. Order No. 14346, 90 Fed. Reg. 43737 (Sep. 10, 2025) (“Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements).
[7] Learning Res., Inc. v. Trump, No. 24-1287, 2026 WL 477534 (U.S. Feb. 20, 2026).
[8] See id. at *3 (finding Congress did not give the President tariff authority in the IEEPA statute).
[9] See id. at *1.
[10] See id. at *3; see also 50 USC § 1701(a) (describing prerequisites for statutory authority under IEEPA).
[11] See id. at *3 (“When Congress grants the power to impose tariffs, it does so clearly and with careful constraints. It did neither in IEEPA.”); see also id. (seeing that dissents from Kavanaugh, Thomas, and Alito all agree with the main opinion of Chief Justice Roberts, Barrett, and Gorsuch that this case invoked the Major Questions Doctrine).
[12] See id. at *11.
[13] See Exec. Order No. 14389, 91 Fed. Reg. 9437 (Feb. 25, 2026) (“Ending Certain Tariff Actions); Proclamation No. 11012, 91 Fed. Reg. 9339 (Feb. 20, 2026) (“Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems”); see also 19 USC § 2132 (being referred to as “section 122 of the Trade Act of 1974”).
[14] See § 2132.
[15] See CBP Issues CSMS Guidance on Section 122 Duties and Continued Suspension of De Minimis Eligibility, Husch Blackwell (Feb. 24, 2026), https://www.internationaltradeinsights.com/2026/02/cbp-issues-csms-guidance-on-section-122-duties-and-continued-suspension-of-de-minimis-eligibility/ [https://perma.cc/V84R-JWXL].
[16] See id.
[17] See Ari Hawkins, What Happens to Billions in Tariff Money Already Paid? Supreme Court Leaves Refunds Unsettled, Politico (Feb. 20, 2026, at 14:37 ET), https://www.politico.com/news/2026/02/20/tariff-refunds-supreme-court-00791244 (on file with the American University Business Law Review).
[18] See id.
[19] See Ari Hawkins, White House Faces Thousands of Lawsuits as it Tries to Slow-Walk Tariff Refunds, Politico (Mar. 03, 2026, at 05:00 ET), https://www.politico.com/news/2026/03/02/businesses-ready-battle-white-house-tariff-refunds-00808048 (on file with the American University Business Law Review).
[20] See Lori Ann LaRocco, Supreme Court Trump Tariff Decision Impact: What to Expect as Fight for Billions in Refunds Begins, CNBC (Feb. 20, 2026, at 17:30 ET), https://www.cnbc.com/2026/02/20/supreme-court-trump-tariff-decision-illegal-refunds.html [https://perma.cc/8CZA-AVDL].
[21] See id.
[22] Amy Howe, How the Tariffs Could be Refunded if the Court Sides Against Trump, SCOTUSblog (Dec. 18, 2025, at 09:30 ET), https://www.scotusblog.com/2025/12/the-tariffs-rebate-debate/ [https://perma.cc/ELH4-DHLP] (referencing the relief process used to resolve an unconstitutional tax in United States v. U.S. Shoe Corp., 523 U.S. 360 (1998)).
[23] See id.
[24] See generally LaRocco, supra note 20 (describing how the Court of International Trade will work with the government to process claims for a refund); Howe, supra note 22 (explaining how Congress has previously required the government to issue refunds on tariffs).
[25] See Atmus Filtration, Inc. v. United States, No. 26-01259, 2026 WL 616128, at *2 (U.S. Ct. Int’l Trade Mar. 6, 2026).
