Supreme Court Restricts Presidential Tariff Authority Under IEEPA

The latest: At a White House press conference on the afternoon of February Feb. 20, President Trump just said he will sign an order today implementing a 10% tariff under Section 122, and will initiate several investigations under Section 301 and other authorities to address unfair trading practices.

In Brief

The Situation

Beginning with the Supreme Court’s decision in Trump v. V.O.S. Selections and Learning Resources v. Trump, the court held that IEEPA does not authorize the president to impose tariffs. The justices concluded that IEEPA’s power to “regulate … importation” cannot be construed as a delegation of Congress’s exclusive taxing authority. The ruling invalidates the Trump administration’s IEEPA-based 10% baseline tariff, reciprocal tariffs and fentanyl-related trafficking tariffs, marking a major shift in the administration’s effort to build a broad regime of emergency-based trade measures.
 
The Result

Most tariffs grounded solely in IEEPA are now legally void, and billions of dollars in duties may be subject to potential refund claims, though the court left refund mechanics unresolved. Key tariff regimes remain untouched—particularly those imposed under Section 232 (national security) and Section 301 (unfair trade practices)—meaning significant Trump era and ongoing tariff structures on steel, autos and Chinese imports continue in effect. Federal agencies and the Court of International Trade must now determine how to handle pending tariff refund litigation and administrative processes.
 
Looking Ahead

The administration is expected to pivot to alternative statutory authorities, including Sections 232, 301, 122 and 338, to continue pursuing tariff-driven trade policy objectives. The administration may use Section 122 to quickly restore some tariffs, though this is a temporary, time-limited solution by statute. The administration will likely use Section 232 and 301 to conduct trade investigations that will be the basis of its longer-term tariff policy. Congress is signaling renewed interest in reasserting its constitutional trade authority, and bipartisan attention is turning to ensuring transparency in any refund process. Stakeholders should closely monitor upcoming tariff actions, potential new trade investigations, evolving negotiations with trading partners, and expected guidance from Customs and Border Protection (CBP) and the Treasury Department regarding refund pathways.

Action Items

Companies affected by the now invalidated IEEPA-based tariffs should begin preparing for potential refund claims by gathering import records and duty documentation while awaiting guidance from CBP and the Department of the Treasury. With the Court of International Trade’s administrative stay lifted, refund-related litigation will move forward, making it critical for importers to understand filing timelines and procedural requirements. Stakeholders should also monitor the administration’s expected shift toward alternative tariff authorities, including Sections 232 and 301, to assess whether future investigations or targeted tariffs may affect their supply chains. Continued engagement with federal agencies and policymakers will be essential to navigate both the refund process and the evolving trade landscape.

With its decision in the consolidated cases Trump v. V.O.S. Selections (No. 25‑250) and Learning Resources v. Trump (No. 24‑1287), the Supreme Court held that the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1701 et seq., does not authorize the president to impose tariffs. The court concluded that IEEPA’s grant of authority to “regulate … importation” cannot be read to include the power to levy duties or taxes, an authority the Constitution assigns exclusively to Congress. It emphasized that IEEPA’s detailed list of permitted actions omits any reference to tariffs or duties, and that no president in the statute’s nearly 50‑year history had used it to impose tariffs.

The ruling will have a significant impact on the Trump administration’s global regime of “reciprocal” tariffs ranging from 10% to over 50%, as well as its attempt to use IEEPA‑based tariffs to pressure China, Canada and Mexico to curb illicit drug flows, including fentanyl and precursor chemicals. The court rejected those uses of IEEPA, concluding that such sweeping and economically transformative tariff authorities would require clear congressional authorization, which IEEPA does not provide. To the extent those tariffs remain in place, they will now need to rely on other statutory tariff authorities.

Despite this outcome, the decision does not disturb major tariffs imposed under other statutes because those measures were not based on IEEPA. Tariffs on steel, aluminum, autos, furniture and other imports imposed under Section 232 of the Trade Expansion Act of 1962 remain in place, as do the extensive tariffs applied during President Trump’s first term on Chinese imports under Section 301 of the Trade Act of 1974. Additional sector‑specific tariff proposals, including on pharmaceuticals and semiconductors, remain pending and could still be pursued under authorities other than IEEPA, primarily Section 232.

In light of the court’s ruling, President Trump plans to rely more heavily on Sections 232 and 301, both of which explicitly delegate tariff authority and have historically been used by presidents to impose significant trade restrictions. While these statutes require specific procedural steps and impose substantive limits that IEEPA lacks, they remain viable channels for new tariffs. In the interim the administration will also turn to a historically unused authority, Section 122 of the Trade Act of 1974. This statute enables the president to impose import quotas and surcharges of up to 15% on any country or group of countries with whom the United States has a “large and serious” trade deficit for up to 150 days.

The ruling also introduces uncertainty surrounding recently announced trade frameworks and bilateral understandings. While many trading partners entered negotiations under the pressure of potential IEEPA‑based tariffs, several deals contemplated significant relief from Section 232 duties. Although the court’s decision removes the threat of expansive IEEPA tariffs, the continued availability of Section 232 and Section 301 authorities may still incentivize participating countries to uphold their commitments. The ultimate impact on these negotiated agreements remains to be seen.

The ruling may also have an impact, albeit temporarily, on the Trump administration’s move to suspend “de minimis” treatment for low-value shipments. The administration relied on IEEPA to suspend the ability of goods valued at or under $800 to enter the United States duty-free and instead subject these goods to applicable tariffs or separate fees. The court’s ruling did not directly address the impact on “de minimis.” Regardless, any impact will be short-lived as Congress largely eliminated the provision in the One Big Beautiful Bill Act (P.L. 119-21), effective July 1, 2027.

Background

IEEPA grants the president authority to address “any unusual and extraordinary threat … to the national security, foreign policy, or economy of the United States” following the declaration of a national emergency. Traditionally, the statute has been used to impose targeted sanctions, freeze assets or block specific foreign property transactions. That practice changed when President Trump declared that the importation of fentanyl and its precursor chemicals constituted a national emergency and, on Feb. 1, 2025, invoked IEEPA to impose tariffs on imports from Canada, Mexico and China. He later declared a separate national emergency relating to the U.S. trade deficit and used that declaration to justify a universal 10% tariff, along with country‑specific reciprocal tariffs.

This novel use of IEEPA was at the center of the two challenges before the Supreme Court. In Learning Resources, Inc. v. Trump, the plaintiffs filed suit in federal district court on April 22, 2025, arguing that IEEPA does not authorize the president to impose tariffs. The district court agreed, concluding that IEEPA does not permit the president to impose or adjust tariff rates, and granted a preliminary injunction limited to the plaintiffs—though it stayed the injunction pending appeal.

Meanwhile, in Trump v. V.O.S. Selections, Inc., the Court of International Trade (CIT) exercised jurisdiction over similar challenges to the IEEPA‑based tariffs. The CIT likewise held that the tariffs were unlawful, granting summary judgment to the plaintiffs and issuing a nationwide injunction, which it also stayed pending appeal. The administration appealed to the U.S. Court of Appeals for the Federal Circuit, which, sitting en banc, affirmed the CIT on Aug. 29, 2025. Although the majority left open the possibility that IEEPA could authorize some forms of tariff action, a concurring group of judges emphasized that IEEPA provides no tariff authority at all. The appellate court stayed its ruling to allow the government time to seek Supreme Court review.

On Sept. 9, 2025, the Supreme Court consolidated the two cases and agreed to hear them on an expedited basis. The court held oral argument on Nov. 5, 2025, and the decision was released on Feb. 20, 2026.

For more information, please view our previous client alerts outlining the (1) initial challenges, (2) appeals process and (3) oral arguments.

Decision Overview

The Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Although the statute empowers the president to “regulate … importation” during a declared national emergency, the court concluded that this phrase cannot plausibly be read to include the power to levy tariffs, an authority the Constitution places squarely and exclusively in Congress under Article I. The court emphasized that tariffs are a form of taxation, and nowhere in IEEPA’s detailed list of verbs such as “investigate,” “block,” “regulate,” “nullify” or “prohibit” did Congress include terms like “tariff,” “duty,” “tax” or any synonymous language indicating a delegation of its taxing power. The court also noted that in IEEPA’s nearly 50-year history, no president had ever used it to impose tariffs and, more broadly, Congress has always delegated tariff authority explicitly and with tight constraints when it intended to do so.

The majority also held that the president’s claimed authority triggered the Major Questions doctrine, because the tariffs imposed under IEEPA were economically and politically momentous. For such extraordinary assertions of executive power, the court explained, clear congressional authorization is required, and IEEPA’s broad but nonspecific language falls short of that standard. Separately, several concurring justices agreed that ordinary statutory interpretation led to the same result, finding that “regulate importation” has never been understood to include the power to impose taxes, and the structure of IEEPA aligns with an emergency power to freeze or block foreign property, not to raise revenue from U.S. importers.

The court rejected counterarguments that pointed to earlier statutes or foreign-affairs precedents. It found that the Trading with the Enemy Act (TWEA) and the lower‑court decision in U.S. v. Yoshida (1975) did not establish a settled meaning that Congress incorporated into IEEPA, and that wartime precedents did not apply because the president expressly disclaimed any inherent wartime authority and the nation was not at war. It further rejected claims that emergency or foreign-affairs contexts justified reading IEEPA broadly, reiterating that Congress alone controls tariff policy and that neither emergencies nor diplomatic considerations can justify inferring a sweeping delegation absent explicit statutory language.

Because IEEPA provided no such authorization, the court affirmed the Federal Circuit’s judgment in V.O.S. Selections, concluding the tariffs were unlawful. It vacated the district court decision in Learning Resources on jurisdictional grounds, directing that case to be dismissed. The decision ultimately reaffirms that tariff authority, an essential element of Congress’ taxing power, cannot be exercised by the president without a clear, express delegation of authority, and that IEEPA’s broad emergency powers stop well short of allowing the executive to reshape U.S. tariff policy unilaterally.

Impact on Existing Tariffs

The Supreme Court ruling invalidates the following tariffs:

• 10% Baseline Tariff. The administration’s across‑the‑board 10% tariff, first imposed on April 5, 2025, and maintained for countries not subject to reciprocal tariffs, was grounded entirely in IEEPA and therefore cannot stand. The court held that IEEPA’s authority to “regulate … importation” does not include the power to tax imports, making the baseline tariff invalid.
• Country-Specific Reciprocal Tariffs. These tariffs, intended to respond to long‑standing trade deficits and applied at rates ranging from 15% to 41% as of Aug. 7, 2025, also relied on IEEPA. Because the president lacks tariff authority under IEEPA irrespective of national emergency declarations, these reciprocal tariffs are invalid as well.
• Trafficking Tariffs. President Trump’s Feb. 1, 2025, declaration that fentanyl importation constituted a national security emergency led to a series of trafficking‑related tariffs on Canada, Mexico and China. These included a 25% (later 35%) tariff on certain Canadian and Mexican goods failing United States-Mexico-Canada Agreement (USMCA) rules of origin, as well as a 10% tariff on all Chinese imports. The Supreme Court held that IEEPA provides no authority for the president to impose tariffs of any kind, even in response to an “unusual and extraordinary threat,” rendering the trafficking tariffs unlawful.

The following tariffs are not affected by the Supreme Court ruling and are still in effect:

• Section 232 Tariffs: Tariffs imposed under Section 232 of the Trade Expansion Act of 1962, including the 50% tariff on steel, aluminum and copper, and the 25% tariff on automobiles, heavy‑duty vehicles, lumber and timber remain valid because Section 232 expressly authorizes the president to adjust imports for national security reasons. Any future tariffs the administration may impose on pharmaceuticals, critical minerals, semiconductors or smartphones under Section 232 would likewise be unaffected.
• Section 301 Tariffs: Tariffs imposed on Chinese goods during President Trump’s first term under Section 301 of the Trade Act of 1974 also remain in effect. The Supreme Court’s ruling does not disturb these measures because Section 301 independently authorizes retaliatory duties in response to unfair trade practices.

Alternative Tariff Authorities

The Trump administration remains committed to using tariffs as a tool to achieve broader economic and national security goals. Since the tariff litigation began, U.S. officials have been coalescing around a “plan B” to utilize alternative authorities that further the president’s trade goals. However, none of the authorities authorize the president to impose broad, sweeping tariffs as he has attempted to do under IEEPA. In remarks shortly after the decision was released, the president indicated that he will leverage a mix of the following authorities to maintain and expand tariffs:

Alternative Tariff Authorities
Statute	Authority	Limitation
Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862)	This statute empowers the president to impose tariffs on a strategic good following a Department of Commerce investigation that determines such a product’s importation threatens the national security of the United States.	Due to the fact that Section 232 requires an investigation and must be tied to national security concerns, the Trump administration would be unable to invoke the authority to impose sweeping tariffs on a wide range of goods.
Section 301 of the Trade Act of 1974 (19 U.S.C. § 2411)	This statute grants expansive authority to the Office of the U.S. Trade Representative (USTR) to investigate and then remedy “unfair” trade practices, including by way of tariffs.	USTR would need to individually investigate countries, and the tariff USTR imposed would be limited to the value of the burden being imposed on U.S. industry.
Section 338 of the Tariff Act of 1930 (19 U.S.C. § 1338)	This statute enables the president to impose new and additional tariffs of up to 50% ad valorem on foreign imports from countries “discriminating” against U.S. commerce.	Section 338 requires an investigation, which can be initiated by the U.S. government or by a private petition to the International Trade Commission. However, the statute has never been used to impose tariffs.
Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132)	This statute enables the president to impose import quotas and surcharges of up to 15% on any country or group of countries with whom the United States has a “large and serious” trade deficit.	Section 122 has never been used to impose tariffs or other trade restrictions and is limited to 150 days (unless expanded by Congress).
Section 201 of the Trade Act of 1974 (19 U.S. C. § 2251)	This statute enables the president to grant temporary import relief (in the form of trade barriers) to protect domestic industries that are seriously injured or threatened by increased imports.	Section 201 requires a petition to be submitted, triggering an ITC investigation that culminates in a report to the president recommending a course of action. The president can impose recommended measures for an initial period of up to four years and extend for a maximum of eight years.

The administration will likely pursue a suite of the authorities listed above to continue rebalancing the trade scales. In the short term, the president plans to invoke Section 122 to largely maintain the 10% baseline tariff. He may also use Section 338 to impose higher duties on countries where securing negotiating leverage is a top priority, such as China.

Separately, the Trump administration could expedite existing Section 232 investigations to impose tariffs on strategic goods. Nine Section 232 investigations remain outstanding, leaving the door open to future tariffs on goods ranging from semiconductors to medical equipment. Section 301 investigations regarding China’s and Brazil’s trade practices are also underway, and USTR could quickly initiate investigations into other trading partners. Sections 232 and 301 provide the Trump administration with a strong legal basis to impose tariffs, but these statutes cannot be deployed quickly due to their required investigations, meaning they will likely be excluded from any short-term strategy.

Refunds

IEEPA‑based tariffs generated billions of dollars in revenue, and the Trump administration may now face the task of refunding those amounts to affected importers. Because the Supreme Court held that IEEPA does not authorize the president to impose tariffs, every duty collected under that authority lacks a valid statutory basis. However, the court did not address whether refunds are required, nor did it provide guidance on how refunds should be administered. As a result, both the legal obligation to return the funds and the mechanics of repayment remain unresolved.

Only Justice Brett Kavanaugh, writing in dissent, directly confronted the refund issue. He warned that the court’s ruling “is likely to generate … serious practical consequences in the near term,” including a multibillion‑dollar refund problem. He noted that “refunds of billions of dollars would have significant consequences for the U.S. Treasury,” and emphasized that the court “says nothing … about whether, and if so how, the government should go about returning the billions of dollars that it has collected from importers,” adding that the process is likely to be a “mess,” as acknowledged at oral argument.

Given the unprecedented scale and structure of President Trump’s IEEPA‑based tariff regime, any refund mechanism will take a significant amount of time to design and implement. Hundreds of importers have already filed lawsuits before the U.S. Court of International Trade (CIT) to preserve their rights to restitution. In response to the flood of filings, the CIT issued an administrative stay for all IEEPA‑related refund cases filed on or after Dec. 24, 2025. The order froze all unassigned cases seeking refunds until a “final, unappealable decision” from the Supreme Court.

With the Supreme Court now having invalidated every IEEPA‑based tariff, the CIT’s administrative stay is lifted. As a result, both previously filed and newly filed refund actions may now proceed. The CIT will play a central role in determining not only which importers are entitled to refunds but also how repayment will be calculated and administered in light of the Supreme Court’s ruling.

Congressional and Administration Reaction

President Trump gave a press conference shortly after the SCOTUS ruling was released. The president reiterated that the administration will utilize alternate trade practices, statutes and authorities “as recognized by the entire court… and Congress,” emphasizing that he views these powers as “stronger” than the IEEPA-based tariffs. He predicted that these alternatives could generate more revenue than the IEEPA tariffs, identifying Sections 232, 122, 201, 301 and 338 tariff authorities as examples. President Trump announced his intention to sign an executive order imposing a 10% global tariff via Section 122 tariff authority, which allows up to a 15% temporary duty for five months. He said the administration will use the five-month period to conduct investigations and determinations under Section 301 and other authorities. USTR Jamieson Greer confirmed the administration’s plan, noting that additional Section 301 investigations will be announced in the coming days and weeks. The Section 122 tariffs will come into effect in three days.

The President criticized the court for not addressing the issue of refunds in its ruling, predicting that “we will end up being in court for five years” to resolve litigation issues stemming from refund requests. He affirmed that several trade agreements remain in place, and those reliant on IEEPA will be replaced with alternate tariff authorities. In particular, the president said nothing will change in regard to the U.S.-India trade deal.

Separately, House Ways and Means Trade Subcommittee Chair Adrian Smith (R‑NE) emphasized the importance of ensuring that U.S. trading partners uphold their commitments under existing trade agreements. He urged Congress to “ensure that these [trade] agreements provide lasting stability beyond any single administration,” noting that lawmakers must work to maintain the market access secured through recent trade negotiations. Similarly, Senate Finance Committee member Sen. Chuck Grassley (R‑IA) called on the administration to “keep negotiating [trade agreements] while also working with Congress [to] secure longer‑term enforcement measures to provide expanded market opportunities.” Sen. Bernie Moreno (R‑OH), by contrast, sharply criticized the ruling, calling it “outrageous” and a betrayal of the administration’s ability to protect jobs, revive manufacturing and hold China accountable.

Democratic lawmakers welcomed the decision. House Ways and Means Ranking Member Richard Neal (D‑MA) described the ruling as “a victory for the American people,” highlighting that tariff authority properly returns to Congress. Sens. Elizabeth Warren (D‑MA) and John Hickenlooper (D‑CO) called for a clear, accessible refund process to ensure small businesses can recover duties paid under the now‑invalidated IEEPA tariffs.

Several Republicans who had broken with the administration on IEEPA‑based tariffs also applauded the ruling. Reps. Don Bacon (R‑NE) and Thomas Massie (R‑KY), both supporters of the House joint resolution to terminate the Canada fentanyl‑related IEEPA tariffs, praised the decision and underscored the need to restore tariff and trade authority to the legislative branch.

Democratic lawmakers had been preparing additional resolutions to condemn the administration’s use of emergency powers to levy tariffs. In light of the Supreme Court’s decision, they have indicated they will pause those efforts and await the administration’s formal response.

Next Steps

The tariff landscape will remain highly fluid for the foreseeable future, and developments in both the executive and judicial branches should be monitored closely. The White House may move quickly to announce new tariffs under alternative statutory authorities in an effort to maintain leverage over trading partners. At the same time, federal agencies such as U.S. Customs and Border Protection (CBP) and the Department of the Treasury may soon issue guidance regarding potential refund processes.

Impacted entities should begin preparing a strategy for potential refund claims now. Thoroughly documenting import histories, maintaining accurate records and filing all required paperwork in a timely manner will be essential. Continued engagement with policymakers will also be critical to understanding and responding to tariff‑related activity across the federal government.

For additional insights into the Trump administration’s trade agenda, or assistance navigating this rapidly evolving environment, please contact a member of the Brownstein team.

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THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING THE RECENT SUPEREME COURT RULING ON IEEPA TARIFFS. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.