Background
On February 1, 2025, President Donald Trump invoked the International Emergency Economic Powers Act (“IEEPA”) to issue tariffs on imports from China, Canada, and Mexico, declaring emergencies concerning illicit drugs, primarily fentanyl (the trafficking tariffs). Then, on April 2, 2025, President Trump declared a separate emergency concerning “a lack of reciprocity in our bilateral trade relationships...as indicated by large and persistent annual U.S. goods trade deficits.” President Trump invoked IEEPA to announce tariffs of at least 10% on imports from almost all U.S. trading partners as well as higher, country-specific “reciprocal tariffs” for many countries (collectively, the worldwide tariffs). Subsequently, President Trump modified the trafficking tariffs and the worldwide tariffs several times. The President also cited IEEPA when imposing tariffs on imports from Brazil, India, and other imports based on emergency declarations.
Lawsuits Challenging IEEPA Tariffs
Several parties filed lawsuits challenging the IEEPA tariffs, contending the President did not have authority to impose tariffs pursuant to IEEPA. In September 2025, the Supreme Court agreed to review the decision of the U.S. Court of Appeals for the Federal Circuit in Trump v. V.O.S. Selections, Inc. and the decision of the U.S. District Court for the District of Columbia in Learning Resources, Inc. v. Trump.
Although the lower courts reached essentially the same conclusion on the merits in V.O.S. Selections and Learning Resources, they differed as to which court had jurisdiction. In V.O.S. Selections, the Federal Circuit and the trial court, the U.S. Court of International Trade (CIT), both held lawsuits challenging IEEPA tariffs under must be filed in the CIT because of its exclusive jurisdiction over lawsuits “aris[ing] out of [a] law of the United States providing for . . . tariffs.”
In Learning Resources, the U.S. District Court for the District of Columbia held IEEPA did not authorize tariffs, therefore these lawsuits did not fall within the CIT's jurisdiction. Both the V.O.S. Selections and Learning Resources decisions were stayed (i.e., paused) by the lower courts, allowing the tariffs to remain in effect until the Supreme Court's decision. Also, U.S. Court of Appeals for the Federal Circuit issued an order staying the issuance of its mandate pending — as relevant — “a judgment of the Supreme Court if certiorari is granted.” The order also provided that “[w]hile the issuance of the mandate is withheld,” the CIT “shall take no further action in this case.” Id.
The Supreme Court's Decision and Opinion on IEEPA Tariffs
On February 20, 2026, the Supreme Court held in a 6-3 decision that IEEPA's phrase “regulate . . . importation” does not authorize the President to impose tariffs, considering both the meaning of the word “regulate” as well as statutory context. Chief Justice Roberts wrote the opinion, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson.
The Court analyzed the meaning of “regulate.” According to Black's Law Dictionary, “regulate” means to “fix, establish, or control; to adjust by rule, method, or established mode; to direct by rule or restriction; to subject to governing principles or laws.” The Court observed that the term “regulate” “captures much of what a government does on a day-to-day basis” but “is not usually thought to include taxation.” The Court also considered the usage of the term “regulate” in other federal statutes, indicating “the Government cannot identify any statute in which the power to regulate includes the power to tax.” The Court concluded: “When Congress addresses both the power to regulate and the power to tax, it does so separately and expressly.”
Looking at the words of the statute itself, IEEPA includes eight verbs besides “regulate,” authorizing the President to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit...importation or exportation.” The list is specific, thus inferring Congress would have expressly included tariffs had it intended to authorize them. Moreover, the Court reasoned, construing the word “regulate” broadly enough to include tariffs would make the other verbs in this list duplicative.
Implications of the Supreme Court's IEEPA Tariff Ruling
- Tariff Invalidation: The ruling blocks the sweeping reciprocal tariffs, trafficking tariffs imposed on Canada, China and Mexico, and the IEEPA tariffs against Brazil and India.
- Refunds for Importers: Importers may be eligible to recover duties paid under IEEPA. Plaintiffs already filed a Motion for Immediate Issuance of the Mandate stayed by the Court of Appeals for the Federal Circuit. This allows immediate enaction of the injunctive relief issued by the CIT, permanently enjoining the IEEPA tariffs and allowing for the issuance of refunds. The Motion is currently pending.
- Limits on Executive Power: The decision reinforces Congress’s constitutional authority over taxation and trade and limits the President for unilaterally imposing tariffs under IEEPA.
- Tariff Alternatives: The administration is currently evaluating tariffs under Section 232 (national security), Section 201 (injury to domestic industry), Section 301 (retaliatory tariffs), or Section 122 (balance of payments). However, each of these tariffs contain procedural requirements and scope limitations.
Practical Advice for Importers: Refund Opportunities and Next Steps
Companies importing goods should continue to maintain importation information such as tracking and bill of lading entries, documentation of duties paid, and liquidation dates. It may be necessary to file protests or post-summary corrections to obtain refunds once the CIT implements the decision. In addition, companies should evaluate their supplier and customer contracts to determine and address possible tariff-related refunds. For assistance with these inquiries or procedures, please contact Miller Nash's International Trade Group.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
