The Supreme Court killed one tariff regime. Two replacements followed, and Washington is now refunding $166 billion while fighting over what comes next.
The Supreme Court killed one tariff regime. Two replacements followed, and Washington is now refunding $166 billion while fighting over what comes next.
The Supreme Court settled the core legal question on February 20, 2026. In a 6-3 ruling, it held that the 1977 emergency-powers law Trump used, the International Emergency Economic Powers Act, never gave presidents the power to impose tariffs. Trump signed a replacement 10% global tariff under Section 122 of the Trade Act of 1974 within hours.
That fix ran into trouble too: a trade court ruled it unlawful in May, though an appeals court let collection continue while it reviews the case. Section 122 expired on July 24, 2026, and the administration replaced it with new Section 301 tariffs on goods from about 60 countries tied to forced-labor enforcement. Customs has refunded roughly $100 billion of the $166 billion collected under the invalidated tariffs, with about $29 billion still under review.
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Key Indicators
$100B
IEEPA refunds issued
Amount Customs has repaid to importers through its new CAPE refund system as of August 5, 2026, about 60% of the $166 billion collected under the tariffs the Supreme Court struck down.
330,000+
Importers awaiting refunds
Companies that paid IEEPA duties and are working through CBP's CAPE portal to recover payments, up from earlier estimates of 301,000.
60
Countries facing new Section 301 tariffs
Economies hit with 10%-12.5% forced-labor tariffs starting July 24, 2026, the day the Section 122 global tariff expired.
0
Prior IEEPA tariff precedents
No president had ever used IEEPA to impose tariffs before Trump did in 2025, a gap the Supreme Court's ruling confirmed the statute never closed.
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25 events
Latest: August 5th, 2026 · 1 month ago
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August 2026
CBP Reports $100 Billion in IEEPA Refunds Issued
LatestFinancial Impact
The administration said it had refunded about $100 billion of the $166 billion collected under the invalidated IEEPA tariffs, with roughly $29 billion still under review and $1.6 billion stalled for missing bank details.
July 2026
Section 122 Tariff Expires, Section 301 Forced-Labor Tariffs Take Its Place
Policy Shift
Trump's 10% global tariff expired after its 150-day statutory limit. The administration immediately replaced it with new Section 301 tariffs of 10%-12.5% on goods from about 60 countries tied to forced-labor enforcement.
June 2026
Federal Circuit Stays Section 122 Injunction
Legal Decision
The appeals court paused the trade court's ruling against the Section 122 tariff, finding the government had a reasonable chance of winning on appeal. CBP kept collecting the duties until the tariff expired.
May 2026
Trade Court Strikes Down Section 122 Global Tariff
Legal Decision
The Court of International Trade ruled 2-1 in Oregon v. Trump and Burlap & Barrel v. Trump that Trump's 10% Section 122 tariff exceeded his authority, finding the economic conditions did not meet the law's balance-of-payments requirement. Relief applied only to the named plaintiffs.
April 2026
CBP Opens CAPE Refund Portal, Phase 1
Administrative Action
Customs launched the Consolidated Administration and Processing of Entries (CAPE) system inside its ACE portal, letting importers file for IEEPA tariff refunds electronically.
March 2026
Trade Court Extends Refund Ruling to Non-Litigants
Legal Decision
The Court of International Trade ruled that importers who never filed suit are still entitled to refunds under the Learning Resources decision, widening the pool of eligible companies.
January 2026
Supreme Court Begins Recess Without Issuing Ruling
Legal Milestone
Court entered four-week recess without deciding IEEPA tariff cases, extending market uncertainty. Decision now expected in February at earliest.
Tariff Collections Reach $150 Billion Milestone
Financial Impact
CBP data shows IEEPA tariff collections approaching $150 billion, up from $133.5 billion in mid-December, as duties continue accumulating pending Supreme Court decision.
CBP Announces Mandatory Electronic Refund System
Administrative Action
Customs published interim rule requiring all tariff refunds be issued electronically via ACH starting February 6, 2026, eliminating paper checks. Move seen as preparation for potential mass IEEPA refunds.
DOJ Confirms Refunds Would Apply to All IEEPA Tariffs
Legal Clarification
Justice Department clarified that if Supreme Court strikes down tariffs, refunds will extend beyond cases directly challenged to all duties imposed under IEEPA authority, including those on Brazil, India, and dozens of other countries.
December 2025
CIT Issues Administrative Stay on New Cases
Procedural Order
Court stayed 700+ protective lawsuits filed by importers, holding them pending Supreme Court decision.
CIT Clarifies Refund Authority and Statute of Limitations
Legal Decision
Court ruled it has power to order refunds of unlawful duties and will retain jurisdiction for two-year limitations period.
November 2025
Supreme Court Hears Three Hours of Arguments
Oral Arguments
Justices grilled both sides in extended session. Court appeared skeptical of government's position, repeatedly asking where IEEPA explicitly authorizes tariffs.
September 2025
Supreme Court Grants Expedited Review
Legal Milestone
SCOTUS consolidated V.O.S. Selections and Learning Resources cases, agreed to fast-track oral arguments.
CIT granted summary judgment to V.O.S. Selections, ruling IEEPA does not authorize tariffs. Government appealed immediately.
April 2025
Learning Resources Files Parallel Challenge
Litigation
Educational toy manufacturers sued in D.C. District Court challenging Liberation Day tariffs.
First Legal Challenge Filed
Litigation
V.O.S. Selections and four other small businesses sued in Court of International Trade, arguing IEEPA doesn't authorize tariffs.
Liberation Day: Reciprocal Tariffs Announced
Executive Action
Trump announced sweeping reciprocal tariffs on dozens of countries under IEEPA, citing trade deficits and unfair practices.
March 2025
Mexico and Canada Tariffs Implemented
Implementation
25% blanket tariffs on Mexico and Canada took effect after delay period expired.
February 2025
IEEPA Tariffs Officially Published
Legal Milestone
Federal Register publication triggered two-year statute of limitations for importers seeking refunds if courts rule tariffs unlawful.
China Tariffs Take Effect, Retaliation Begins
Implementation
10% tariffs on Chinese imports went live. China announced retaliatory duties.
Canada and Mexico Tariffs Postponed 30 Days
Policy Shift
Trump agreed to delay implementation after retaliatory measures threatened, but China tariffs proceeded.
Trump Declares National Emergencies, Orders IEEPA Tariffs
Executive Action
President signed three executive orders imposing 25% tariffs on Canada and Mexico, 10% on China, citing fentanyl trafficking as national security emergency.
Scenarios
1
Supreme Court Strikes Down IEEPA Tariffs, $129B Refund Scramble Begins
Possible
Discussed by: Constitutional Accountability Center, Brennan Center for Justice, trade law analysts across major firms including Holland & Knight and Mayer Brown
The Court rules IEEPA doesn't authorize tariffs, triggering the largest customs refund operation in U.S. history. Customs and Border Protection, already underfunded and understaffed, faces 301,000 importers demanding refunds totaling $129 billion. The process takes years, strains government finances, and vindicates congressional control over taxation. Trump could immediately reimpose similar tariffs using Section 232 national security authority or push Congress for legislation, but the precedent limiting emergency powers would stand.
2
Supreme Court Upholds Tariffs, Presidential Trade Power Expands Dramatically
Possible
Discussed by: Former Solicitor General Elizabeth Prelogar, government lawyers, analysts at PwC and Baker Tilly
The Court validates IEEPA as tariff authority, establishing that presidents can impose massive trade barriers by declaring emergencies without congressional approval. The $129 billion stays collected, importers lose refund hopes, and future presidents gain unprecedented economic leverage. Congressional trade authority effectively transfers to the executive branch. The ruling would encourage emergency declarations for policy goals—immigration, climate, industrial policy—backed by tariff threats.
Discussed by: Legal scholars observing oral arguments, constitutional law experts
The Court invalidates these specific tariffs on procedural or narrow statutory grounds without deciding whether IEEPA could ever authorize duties. Perhaps it rules the fentanyl and trade deficit rationales don't constitute the type of emergency IEEPA contemplated, or questions whether the proclamations met statutory requirements. This preserves future executive flexibility while blocking Trump's particular approach, but creates ongoing uncertainty about the limits of emergency economic powers.
4
Supreme Court Splits the Difference, Validates Some Tariffs But Not Others
Unlikely
Discussed by: Trade policy analysts, importers, law firms advising on refund strategies
The Court distinguishes between the targeted fentanyl tariffs on China, Mexico, and Canada versus the sweeping Liberation Day reciprocal tariffs. It might uphold narrow emergency-linked duties while striking down broad economic tariffs, creating a messier refund situation where some importers get money back and others don't. This outcome would require extensive litigation to sort out which specific tariff lines survive and which fall, prolonging uncertainty for years.
5
Federal Circuit Upholds the Section 122 Ruling, Voiding a Second Tariff Authority
Uncertain
Resolves by Feb 1, 2027
Discussed by: Trade attorneys at Skadden and Barnes Richardson Colburn covering the appeal
The Federal Circuit could affirm the trade court's finding that Trump's Section 122 tariff never met the law's balance-of-payments requirement. Since Section 122 already expired and was replaced by Section 301 duties, an affirmance would mainly determine refunds for the plaintiffs in Oregon v. Trump rather than restart tariff collection.
6
Congress Curbs Presidential Tariff Power by Statute
Unlikely
Resolves by Jan 3, 2027
Discussed by: Sponsors of the Prevent Tariff Abuse Act (H.R. 407) and the Trade Review Act (S. 1272)
Two bills in Congress would require lawmakers to approve tariffs before they take effect, or bar presidents from using IEEPA for that purpose. Neither has passed either chamber, and Republican leadership has shown little appetite for handing back the authority Trump has used repeatedly this year.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
1 of 3
1930-1934
Smoot-Hawley Tariff Act of 1930
During the Great Depression's onset, Congress passed the Smoot-Hawley Tariff Act raising duties on over 20,000 imported goods to protect American industries. Trading partners retaliated with their own tariffs. World trade collapsed by 66% between 1929 and 1934, deepening the Depression. U.S. exports fell from $7 billion to $2.5 billion.
Then
Immediate retaliation from Canada, Mexico, Europe devastated export-dependent industries and farmers.
Now
Became the canonical example of protectionism's dangers, cited in every trade debate since. Led to decades of trade liberalization efforts.
Why this matters now
Trump's IEEPA tariffs triggered similar retaliatory threats from Canada, Mexico, and China. The scale—$129 billion collected—and breadth recall Smoot-Hawley's sweeping reach.
2 of 3
1952
Youngstown Sheet & Tube Co. v. Sawyer (1952)
During the Korean War, President Truman seized steel mills to prevent a strike he claimed would jeopardize national defense. The Supreme Court ruled 6-3 that he lacked authority—neither Congress nor the Constitution granted him power to seize private property, even in wartime emergency. Justice Jackson's concurrence established the foundational framework for analyzing presidential power: it's strongest when Congress approves, weakest when Congress prohibits.
Then
Truman returned the mills to private ownership, and the steel strike proceeded.
Now
Created the Youngstown framework that courts still use to assess executive authority. Established that emergencies don't create power, they only occasion its exercise.
Why this matters now
The IEEPA case sits squarely in Youngstown's framework. Did Congress authorize tariffs when it passed IEEPA, or does the statute's silence mean prohibition? Courts apply Jackson's test.
3 of 3
2018-present
Section 232 Steel and Aluminum Tariffs (2018)
In his first term, Trump used Section 232 of the Trade Expansion Act of 1962 to impose 25% steel and 10% aluminum tariffs, claiming imports threatened national security. Unlike IEEPA, Section 232 explicitly authorizes tariffs. Trading partners protested but the authority was clear, so legal challenges failed. The tariffs remained in place through Biden's presidency.
Then
Steel and aluminum industries got protection, but manufacturers using these metals faced higher costs. Allies imposed retaliatory tariffs.
Now
Normalized using national security justifications for economic tariffs, setting precedent Trump expanded with IEEPA.
Why this matters now
Shows Trump had legal tariff tools available in Section 232. His choice to use IEEPA instead—a statute without explicit tariff authorization—is what created the constitutional crisis.
