Today, the U.S. Supreme Court ruled that the government cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs. This is a significant legal change, but there is no immediate operational impact for importers. Duties under IEEPA must still be paid, and refund questions remain unresolved. IEEPA tariffs will be replaced with a 10% global tariff under Section 122 of the Tariff Act of 1974.
What Did the Supreme Court Decide?
The Court determined that IEEPA cannot serve as the legal basis for tariffs. This ruling only affects tariffs imposed under IEEPA and does not impact those under Section 301 (including China tariffs) or Section 232 (steel, aluminum, copper, autos, and auto parts), which remain in force.
Will IEEPA Duties Stop Soon?
U.S. Customs and Border Protection (CBP) will continue collecting IEEPA duties until it provides official instructions to the trade on revised entry procedures. We expect these to be forthcoming.
Refunds Uncertain
The Supreme Court did not address refunds. The process will be decided by lower courts. Importers should continue to protest unliquidated entries to preserve their right to refunds, as deadlines apply.
What Should Importers Do?
Importers should keep paying all duties, track IEEPA payments separately, keep documentation, and monitor updates from CBP and the courts.
Section 122 and Looking Ahead
The Administration announced on February 20th that they would impose a global tariff effective immediately of 10% under Section 122, as well as initiate new investigations under Section 232 and Section 301. There are also numerous 232 investigations pending that could lead to future product-based tariffs.
Bottom Line
This Supreme Court ruling is important legally, but there is no immediate change for importers. Stay vigilant, keep records, pay required duties, and watch for further guidance on refunds and compliance.
