Supreme Court invalidates IEEPA tariffs, importers eye Section 122 fallback
The Supreme Court held IEEPA does not authorize presidential tariffs, invalidating all such duties since February 2025, while the administration signals Section 122 of the Trade Act as the next legal avenue.
The U.S. Supreme Court held on February 20, 2026, that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, a decision that invalidates all such duties enacted since February 2025. The ruling in Learning Resources, Inc. v. Trump affects a wide range of tariffs, including those levied against China, Mexico, and Canada. While this creates a significant opportunity for importers to seek refunds on past duties, the decision did not specify a refund mechanism, leaving the issue to be litigated at the U.S. Court of International Trade. Sophisticated counsel and their clients care because the financial stakes are high, but the landscape remains unsettled. Within hours of the ruling, the administration signaled it would use other statutes, namely Section 122 of the Trade Act of 1974, to maintain its tariff policies. This rapid pivot means importers must now prepare for a new legal basis for tariffs while simultaneously pursuing refunds under the old regime. The immediate action is a two-track strategy: compiling records to file refund claims while proactively assessing supply-chain vulnerabilities and tariff-mitigation tactics for the expected Section 122 duties.