Federal courts have struck down two of President Trump’s major tariff programs in the span of three months. In February 2026, the Supreme Court ruled 6-3 that the emergency-powers tariffs Trump imposed in 2025 were illegal. In May 2026, the U.S. Court of International Trade ruled that the 10% global tariff he imposed as a replacement was also unlawful. Both decisions are being implemented unevenly: the emergency tariffs are being refunded, but the 10% replacement tariffs are still being collected under an appeals-court stay while the government’s appeal proceeds.
Here is where each case stands, what it means for money already paid, and what tariff authority the administration is now trying to build in place of what the courts have taken away.
The Supreme Court Ruling on the Emergency Tariffs
Starting in early 2025, Trump used the International Emergency Economic Powers Act to impose duties of 25% on most Canadian and Mexican imports, escalating rates on Chinese goods that eventually reached an effective 145%, and a separate set of “reciprocal” tariffs of at least 10% on imports from virtually all trading partners.1Supreme Court of the United States. Learning Resources, Inc. v. Trump, No. 24-1287
Five small businesses, represented by the Liberty Justice Center, challenged the tariffs in the Court of International Trade. The lead plaintiff was V.O.S. Selections, a New York wine importer whose owner said the duties “threatened our survival.”2Liberty Justice Center. Landmark Victory for Small Businesses: Supreme Court Strikes Down Liberation Day Tariffs The CIT ruled the tariffs illegal in May 2025, the Federal Circuit affirmed en banc in August, and the Supreme Court heard arguments that November.3U.S. Court of Appeals for the Federal Circuit. V.O.S. Selections v. Trump, Nos. 2025-1812, 2025-1813
On February 20, 2026, the Court held in a 6-3 decision that “IEEPA does not authorize the President to impose tariffs.” Chief Justice Roberts, writing for the majority, reasoned that the statutory power to “regulate” importation does not include the power to tax, and that no president had used IEEPA to impose tariffs in the statute’s nearly 50-year history. “Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly,” Roberts wrote.1Supreme Court of the United States. Learning Resources, Inc. v. Trump, No. 24-1287
Justice Kavanaugh dissented, joined by Justices Thomas and Alito, arguing that the historical understanding of “regulate importation” encompasses tariffs.1Supreme Court of the United States. Learning Resources, Inc. v. Trump, No. 24-1287
The 10% Replacement Tariffs and the May 2026 Ruling
On the same day the Supreme Court ruling came down, Trump signed a proclamation imposing new 10% tariffs on most imports under a different statute: Section 122 of the Trade Act of 1974. The duties took effect four days later.4The White House. Fact Sheet: President Donald J. Trump Imposes a Temporary Import Duty to Address Fundamental International Payment Problems
Section 122 authorizes the president to impose temporary, nondiscriminatory import surcharges of up to 15% for no more than 150 days to address “fundamental international payments problems.” The administration cited the U.S. balance-of-payments deficit as justification.5The White House. Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems The tariffs included broad exemptions for critical minerals, energy products, pharmaceuticals, certain electronics, passenger vehicles, aerospace products, and USMCA-compliant goods from Canada and Mexico.4The White House. Fact Sheet: President Donald J. Trump Imposes a Temporary Import Duty to Address Fundamental International Payment Problems
Two lawsuits followed within weeks. Oregon Attorney General Dan Rayfield led a coalition of 24 state attorneys general, with Arizona, California, and New York as co-leads.6Washington State Attorney General. AG Brown Wins Tariffs Lawsuit Against Trump Administration In a separate but consolidated case, the Liberty Justice Center represented spice importer Burlap and Barrel, Inc. and Florida toy company Basic Fun, Inc., which makes Tonka Trucks, Lincoln Logs, and Care Bears and imports components from China.7Liberty Justice Center. Client: Basic Fun
On May 7, 2026, Judges Mark A. Barnett and Claire R. Kelly ruled 2-1 that the tariffs were “invalid” and “unauthorized by law.” The central question was what “balance-of-payments deficits” means under Section 122. The majority held that the statute requires a specific deficit in the total flow of money in and out of the country, not merely the trade deficit or current account deficit the administration relied on. The court concluded that Section 122 “cannot be stretched into a general-purpose tariff power.”8Liberty Justice Center. Burlap and Barrel, Inc. v. Trump
Judge Timothy C. Stanceu dissented, arguing that no such economic metrics appear in the statutory text and that courts are not “experts in international macroeconomics matters.”9Sullivan & Cromwell. Trade Court Strikes Down President Trumps 10 Section 122 Tariff
The ruling did not stop the tariffs nationwide. Citing the Supreme Court’s 2025 decision in Trump v. CASA, Inc., which restricts federal courts from issuing injunctions covering non-parties, the CIT ordered the government to stop collecting from only three plaintiffs: the State of Washington, Burlap and Barrel, and Basic Fun. Claims from the other 23 states were dismissed for lack of standing because those states are not direct importers.10ASIL. The US Court of International Trade Invalidates Trumps 10 Global Tariff
Why the 10% Tariff Is Still Being Collected
The administration appealed to the U.S. Court of Appeals for the Federal Circuit and requested a stay. On June 11, 2026, the appeals court granted it, finding the government had “sufficiently” shown a likelihood of success on appeal. The court said it was “persuaded by the federal government’s argument that the CIT majority’s interpretation … may be incorrect,” pointing to legislative history that supports a broader reading of “balance-of-payments deficit.”11International Trade Today. CAFC Finds US Likely to Succeed in Section 122 Appeal, Issues Stay
The practical result: collection continues for all importers, including the three plaintiffs who won at the CIT. The Federal Circuit reasoned that any harm from continued collection could be undone later through refunds with interest if the tariffs are ultimately found unlawful.11International Trade Today. CAFC Finds US Likely to Succeed in Section 122 Appeal, Issues Stay
There is a built-in end date regardless. By statute, Section 122 tariffs can last no more than 150 days, putting expiration at July 24, 2026, unless Congress extends them, which is widely considered unlikely.5The White House. Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems New importer complaints seeking exemptions based on the May ruling are being filed at the CIT, and the Justice Department has cited that surge as a reason to keep the CIT’s decision on hold.12Inside U.S. Trade. Trump Administration Renews Call to Block CIT Tariff Ruling as New Suits Arise
Refunds for the Emergency Tariffs
After the Supreme Court ruling, the Federal Circuit sent the IEEPA cases back to the Court of International Trade in early March 2026 to oversee refunds. The government had collected roughly $166 billion, affecting more than 330,000 importers across over 53 million entries.13Reuters. US Tariff Lawsuits Returned to Trade Court to Determine Next Steps
U.S. Customs and Border Protection began processing refunds in phases through its Consolidated Administration and Processing of Entries system. By the end of June 2026, more than $95 billion had been queued for refund and over $40 billion had been disbursed, with about $23 billion approved and transmitted to the Treasury.14Holland & Knight. IEEPA Tariff Refund Update: Government Appeals
Not everyone is getting their money back. Senior Judge Richard K. Eaton ordered CBP to reliquidate every IEEPA-duty entry, then suspended that order two days later after the government showed manual processing would require an estimated 4.4 million labor hours.15Fox Rothschild. Court Orders $166 Billion in Tariff Refunds, Then Pauses Them in 48 Hours A larger fight remains over “finally liquidated” entries, meaning imports whose duty calculations were completed more than 90 days ago. The government estimates its exposure on those at over $30 billion but argues that only the roughly 4,000 importers who filed lawsuits at the CIT are entitled to refunds on them, again invoking Trump v. CASA to argue that relief cannot extend to non-parties.14Holland & Knight. IEEPA Tariff Refund Update: Government Appeals
Consumer Class Actions Against Retailers
The refunds are going to importers, not to consumers who paid higher prices at checkout. A separate wave of class action lawsuits has been filed against companies including Costco, UPS, FedEx, and eyewear giant EssilorLuxottica, alleging those importers raised prices to cover tariff costs and should now pass refund proceeds back to customers rather than keep them as a windfall. Plaintiffs assert breach of contract, unjust enrichment, and consumer protection claims. FedEx has publicly said it plans to pass refund proceeds to customers; motions in the other cases remain pending.16Sullivan & Cromwell. Tariff Refund Claims Spur Litigation, Potential Deals
What Tariff Authority Is Left
The court rulings do not clear away every Trump-era tariff. Two other statutory authorities remain in force and were not affected by the IEEPA or Section 122 decisions.
Section 232 of the Trade Expansion Act of 1962 covers national security tariffs. Those duties on steel, aluminum, and copper remain in place. On June 1, 2026, Trump signed a proclamation adjusting the rates, reducing duties on agricultural equipment and expanding eligibility for lower rates on machinery with high domestic content.17The White House. Fact Sheet: President Donald J. Trump Updates Tariffs on Steel, Aluminum, and Copper Imports
Section 301 of the Trade Act of 1974 is the administration’s primary replacement vehicle. It authorizes tariffs on countries engaged in unfair trade practices, but requires a formal investigative process with public hearings and a written record. As of June 2026, the U.S. Trade Representative has issued findings in 60 Section 301 investigations covering economies from China and the European Union to Australia, Japan, and the United Kingdom, focused on failures to prohibit imports produced with forced labor. The USTR has proposed additional duties of 10% to 12.5% depending on the country.18Office of the U.S. Trade Representative. USTR Makes Findings and Proposes Action in 60 Section 301 Investigations Separate Section 301 investigations target Brazil, with a proposed 25% tariff, and Vietnam over intellectual property enforcement.19Wiley Rein. USTR Proposes Multiple New Tariff Actions and Other Trade-Related Measures Public hearings are scheduled for early July 2026.
Whether courts will uphold tariffs built through Section 301 remains untested. The formal record and hearing requirements make the legal case for those duties stronger than for IEEPA and Section 122, but they also mean any new tariffs will take longer to impose than the ones the courts have now struck down.