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Supreme Court Ruling on IEEPA Tariffs
On February 20, 2026, the U.S. Supreme Court decided Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. This invalidates President Trump’s IEEPA “emergency” tariffs and opens the door to significant refund claims by affected importers.
 

What the President did
Soon after taking office, President Trump:

Declared national emergencies over Illegal drugs from Canada, Mexico, and China

“Large and persistent” trade deficits and weakened supply chains

Used IEEPA to impose:

• Drug‑trafficking tariffs – 25% on most Canadian and Mexican imports, 10% on most Chinese imports

• “Reciprocal” trade‑deficit tariffs – at least 10% on virtually all imports, with higher rates for many countries

• These measures generated billions of dollars in extra duties paid by U.S. importers.

• 
  The legal challenge

• Small businesses and several States sued in federal courts and in the U.S. Court of International Trade (CIT), arguing that:

• IEEPA allows emergency regulation of imports, but does not transfer Congress’s core taxing and tariff‑setting power to the President.

• The tariffs were effectively unlimited in scope, size, and duration, far beyond anything Congress clearly approved.

• The CIT and the Federal Circuit agreed; the Supreme Court then reviewed and consolidated the cases.
   

The Supreme Court’s core holding
Bottom line: IEEPA does not authorize the President to impose tariffs.
 

Key reasons:

• Tariff power is Congress’s job. The Constitution gives Congress—not the President—the power to impose taxes and duties, including tariffs.

• IEEPA never mentions tariffs. The statute lists powers like “investigate, block, regulate, nullify, prevent, or prohibit” imports and exports, but says nothing about tariffs or duties.

• “Regulate” ≠ “tax.” The Court rejected the idea that the generic power to “regulate importation” quietly includes the extraordinary power to tax.

• No historical practice. In nearly 50 years of IEEPA, no President had used it to impose tariffs, which strongly suggests Congress never intended such a sweeping delegation.

• Major questions doctrine. For big, economically and politically significant powers like unilateral tariff setting, Congress must speak clearly. IEEPA doesn’t.

Result: the Court affirmed the CIT decision striking down the tariffs and vacated and remanded the D.C. case with instructions to dismiss on jurisdictional grounds.

What this means for importers
Because the IEEPA tariffs lacked valid statutory authority:

Duties collected under those tariffs were unlawful, and many importers may now be eligible for tariff refunds—potentially tens or hundreds of billions of dollars overall. The refund process is expected to be complex and messy, involving the Court of International Trade and U.S. Customs and Border Protection (CBP).
 

Why Congress still matters

• The ruling does not eliminate presidential tariff tools altogether. Congress has already granted specific tariff powers in other laws (such as Section 232 and Section 301) and can adjust those powers as it chooses.

• What the Court rejected is using a general emergency law like IEEPA as a back‑door, open‑ended grant of tariff‑setting authority to the President.