The Supreme Court just pulled the rug out from under the most aggressive trade policy in modern history. On February 20, 2026, in a 6-3 decision for Learning Resources, Inc. v. Trump, the Court ruled that the President can't use the International Emergency Economic Powers Act (IEEPA) to slap massive, indefinite tariffs on imports. Basically, the Court said that because tariffs are a form of tax, only Congress has the power to create them unless they've explicitly handed that power over. They haven't.
If you’re an importer who has been bleeding cash to pay these duties over the last year, this sounds like a massive win. It is. But don't expect a check in the mail tomorrow. We’re looking at roughly $175 billion in illegally collected revenue, and the path to getting it back is a bureaucratic minefield. President Trump has already signaled he’ll fight these refunds in court for years. It's going to be a mess. Read more on a similar issue: this related article.
The Problem with the IEEPA Power Grab
For the past year, the administration used IEEPA as a "get out of jail free" card for trade policy. They used it to bypass the slow, investigation-heavy processes required by other trade laws. They hit Canada, Mexico, and China with 25% "fentanyl tariffs" and then rolled out "reciprocal tariffs" against almost everyone else on what they called "Liberation Day" in April 2025.
The Supreme Court essentially called foul on the legal gymnastics used to justify this. The majority opinion argued that "regulating" imports doesn't give the White House the right to tax them into oblivion without a clear nod from the legislative branch. This ruling effectively kills the IEEPA-based tariffs, but it leaves others standing. If you’re paying duties under Section 232 (steel and aluminum) or Section 301 (Chinese tech and trade practices), those are still very much alive. Further journalism by Financial Times highlights comparable perspectives on the subject.
The $175 Billion Refund Scramble
Now for the hard part. The Supreme Court didn't actually order the government to start writing checks. They just said the legal basis for the tariffs was gone. This sends the whole mess back to the U.S. Court of International Trade (CIT) to figure out the "how."
If you're an importer of record, you're the one in line for the money. But the government isn't just going to hand it over. You have to go get it. Here is the reality of the situation right now:
- The 180-Day Wall: For many shipments, the clock is ticking. You usually have 180 days after an entry is "liquidated" (finalized by Customs) to file a protest. If you miss that window, the government might argue your right to a refund is gone forever.
- The "Pass-Through" Tussle: This is where it gets ugly. Many importers passed the cost of these tariffs down to their customers or retailers. Now, those customers are showing up asking for their cut of the refund. Expect a wave of private lawsuits between suppliers and buyers over who actually "bore the burden" of the tax.
- Digital Only: U.S. Customs and Border Protection (CBP) stopped issuing paper checks earlier this month. If you aren't set up for ACH payments in the ACE Portal, your refund could sit in "reject status" indefinitely.
Which Tariffs are Actually Gone
It's easy to get confused by the alphabet soup of trade laws. To be clear, the following are the ones the Court just nuked:
- The 25% tariffs on Canada, China, and Mexico linked to the fentanyl emergency.
- The broad "reciprocal" tariffs from April 2025.
- Any other duty triggered specifically by an IEEPA emergency declaration.
Everything else—Section 232, Section 301, and the new Section 122 "stopgap" 15% tariff—is still hitting your bottom line.
Why Your Accounting Department is About to Panic
Getting a refund isn't as simple as showing a receipt. CBP will likely demand "entry summaries" (Form 7501) for every single shipment. If you’ve been importing thousands of SKUs from multiple countries, you’re looking at a data nightmare.
You’ll need to prove:
- The exact amount of IEEPA duty paid.
- That the entry hasn't been "liquidated" for more than 180 days (or that you filed a protective protest).
- That you are the legal Importer of Record.
The administration’s pivot to Section 122—a temporary 150-day surcharge—is a tactical move to keep the revenue flowing while they try to find a more "legal" way to keep the tariffs. It means that even as you're fighting for a refund on last year's taxes, you're still paying a 10% to 15% surcharge on new shipments starting February 24, 2026.
Stop Waiting and Start Documenting
The biggest mistake you can make right now is waiting for a "refund portal" to appear. It might never happen. Instead, you need to treat this like an audit.
Start by pulling every single entry summary from the last 12 months. Separate your IEEPA payments from your Section 232 or 301 payments. If you haven't filed "protective protests" with the CIT yet, talk to your trade counsel immediately. Some legal experts think the 180-day rule might be waived given the scale of the "illegal" collection, but "thinking" it might happen won't protect your capital.
Check your ACE Portal account today. If your banking info isn't current or your ACH isn't verified, you're giving the government an excuse to hold onto your money longer. This isn't just a legal battle; it's a cash flow battle. The companies that get their data in order first are the ones who will actually see that $175 billion start trickling back into their accounts before the end of the decade.
