The IEEPA tariff lawsuit ended at the U.S. Supreme Court on February 20, 2026, when a 6-3 majority held that the International Emergency Economic Powers Act does not give the President authority to impose tariffs. The ruling in Learning Resources, Inc. v. Trump invalidated the sweeping import duties the Trump administration had imposed on goods from nearly every country in the world beginning in early 2025, and it opened the largest tariff refund effort in U.S. history, covering an estimated $166 billion to $175 billion collected from more than 300,000 importers.1
What the Supreme Court Held
Chief Justice John Roberts wrote the majority opinion, joined on the core statutory holding by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. The Court gave three reasons IEEPA does not reach tariffs.
First, the text. IEEPA lists powers to “investigate, block, regulate, direct and compel, nullify, void, prevent or prohibit” certain transactions. The words “tariff” and “duty” appear nowhere in the statute, and the government could not identify any federal law in which “regulate” had been read to include the power to tax.
Second, constitutional structure. The Court treated tariffs as a branch of the taxing power that Article I assigns to Congress. Reading “regulate importation” to include taxation would also render part of the statute unconstitutional, because IEEPA covers exportation as well and the Constitution forbids taxing exports.
Third, history. In nearly fifty years of IEEPA use, no president had ever invoked it to impose tariffs. When Congress has delegated tariff authority through other statutes, it has used the word “duty” and imposed strict limits on amount and duration.
A three-justice plurality of Roberts, Gorsuch, and Barrett went further and applied the major questions doctrine, holding that a claimed power of “unlimited amount, duration, and scope” over “the core congressional power of the purse” required clear congressional authorization that IEEPA does not supply.
Justice Kavanaugh dissented, joined by Justices Thomas and Alito, arguing that “regulate importation” and “adjust imports” are functionally indistinguishable and that a Nixon-era surcharge under the Trading with the Enemy Act supplied historical precedent. Justice Thomas filed a separate dissent.
The Court affirmed the Federal Circuit’s judgment in the consolidated Trump v. V.O.S. Selections, Inc. case and vacated the D.C. District Court’s ruling in Learning Resources on the ground that jurisdiction over tariff claims belongs in the U.S. Court of International Trade.
The Tariffs That Were Struck Down
The dispute traced to two national emergency declarations in early 2025. On February 1, President Trump declared an emergency citing fentanyl trafficking and immigration and imposed tariffs of 20 to 25 percent on imports from Canada, Mexico, and China. On April 2, he declared a second emergency citing persistent trade deficits and imposed a baseline 10 percent tariff on nearly all imports, plus steeper “reciprocal” rates on countries with large trade imbalances with the United States. The administration called the April action “Liberation Day.”
Challenges arrived within weeks. The Liberty Justice Center sued at the Court of International Trade on April 14, 2025, on behalf of five small businesses including wine importer V.O.S. Selections; Oregon and eleven other states filed a parallel case nine days later. A separate suit by educational-products companies Learning Resources and hand2mind went to the D.C. District Court. On May 28, 2025, a three-judge CIT panel granted summary judgment to the plaintiffs and permanently enjoined collection. The Federal Circuit affirmed en banc on August 29, 2025, holding that IEEPA’s power to “regulate” imports does not encompass tariffs. The Supreme Court heard argument on November 5, 2025.
What Replaced the IEEPA Tariffs
President Trump signed an executive order terminating the IEEPA tariffs on the day of the Supreme Court ruling, and U.S. Customs and Border Protection stopped collecting them at midnight on February 24, 2026. Within hours, the president signed a new order imposing 10 percent tariffs on goods from all countries under Section 122 of the Trade Act of 1974, a provision designed to address balance-of-payments crises. Those tariffs took effect at the moment the IEEPA duties ended and were set for an initial period of 150 days.
The Section 122 tariffs drew their own lawsuits. Oregon led a 24-state coalition at the CIT on March 5, 2026, and the Liberty Justice Center followed on March 9 for spice company Burlap and Barrel and toy maker Basic Fun. The plaintiffs argued Section 122 is a narrow tool for a fixed-exchange-rate era obsolete since 1976 and that the administration was conflating “trade deficits” with the “balance-of-payments deficits” the statute actually addresses. On May 7, 2026, the CIT granted summary judgment to the private plaintiffs and the State of Washington and struck down the Section 122 tariffs. The Federal Circuit stayed that ruling on June 11, 2026, and the appeal is pending.
The administration also opened trade investigations under Section 301(b) of the Trade Act of 1974, covering 15 countries and the European Union on industrial overcapacity and 60 countries on forced labor. Those are separate authorities and were not affected by the IEEPA decision.
How the Refunds Are Being Processed
The Supreme Court did not decide what happens to the roughly $166 billion to $175 billion in IEEPA tariffs already collected on some 34 million entries. That question returned to the Court of International Trade. On March 4, 2026, CIT Senior Judge Richard Eaton issued a refund order in Atmus Filtration, Inc. v. United States directing CBP to liquidate all unliquidated entries without IEEPA duties and to reliquidate entries that were liquidated but not yet final. He ruled the order applies to all importers, not only those who had filed suit, reasoning that every importer suffered the same legal harm and that requiring individual complaints would “thwart the efficient administration of justice.”
CBP told the court on March 6 that it could not comply immediately with a refund of more than $100 billion given the volume and inadequate technology. The agency built a new web-based system, Consolidated Administration and Processing of Entries (CAPE), which launched on April 20, 2026. Importers submit claims through the ACE Secure Data Portal using structured CSV files, and valid refunds are generally processed within 60 to 90 days.
The rollout is phased:
- Phase 1 (launched April 20, 2026) covers unliquidated entries and entries liquidated within the preceding 80 days. By early June, CBP had processed refunds on nearly 8.5 million entries. As of June 9, 2026, the agency had accepted claims covering about $90 billion of the $166 billion total, with roughly $23 billion approved and transmitted to Treasury for payment. Over $40 billion in refunds were projected to be disbursed by the end of June.
- Phase 2 (scheduled June 29, 2026) covers reconciliation entries and entries subject to antidumping or countervailing duties, an estimated 2.8 million entries worth about $28.7 billion.
- Phase 3 (targeted for late July) covers “finally liquidated” entries, meaning those that completed both the liquidation cycle and the 180-day protest period.
The Fight Over Refunds for Importers Who Did Not Sue
The sharpest ongoing dispute concerns Phase 3. The government maintains that finally liquidated entries can be refunded only to importers who filed their own lawsuits at the CIT, arguing that Judge Eaton’s universal order is an impermissible injunction under the Supreme Court’s July 2025 decision in Trump v. CASA, Inc., which held that federal courts generally lack authority to issue universal injunctions protecting non-parties. Approximately $30 billion in duties on finally liquidated entries remain contested on this basis.
Judge Eaton distinguished the CIT from the general federal courts covered by CASA, noting the CIT has exclusive nationwide jurisdiction over tariff disputes under the Customs Courts Act of 1980. Because no other court can hear these claims, he reasoned, his order is not a universal injunction reaching into other forums but the only court with jurisdiction doing its job. He also cited the Uniformity Clause, which requires duties to be uniform throughout the United States.
The Department of Justice filed notices of appeal to the Federal Circuit on June 2, 2026, challenging the CIT’s universal refund orders, and petitioned for a writ of mandamus to prevent CBP Commissioner Rodney Scott from being compelled to testify at a June 9 CIT hearing about the refund timeline. The Federal Circuit had not granted an interim stay of the refund orders as of mid-June 2026. About 4,000 plaintiff importers are expected to receive full refunds; over 2,000 companies have filed individual claims at the CIT, and the number continues to grow. Importers who never sued face potential delays or permanent loss of refunds on their finally liquidated entries if the government’s position prevails on appeal.
Corporate Claims and Consumer Class Actions
Publicly disclosed IEEPA refund claims or expectations include Ford Motor at $1.3 billion, Home Depot at $540 million, General Motors at $500 million, Stellantis at $465 million, TJX Companies at $400 million, Polaris at $125 million, Hasbro at $50 million, and Funko at $20 million. Apple, Walmart, Tesla, and Illumina have also acknowledged eligibility. Costco, Revlon, Bumble Bee Foods, Kawasaki Motors, EssilorLuxottica, and Yokohama Tire are among dozens of companies that filed separate CIT suits, consolidated under AGS Company Automotive Solutions v. United States. S&P 500 companies collectively disclosed roughly $7.3 billion in IEEPA-related refunds or anticipated payments.
Consumers are pursuing a separate track, suing retailers rather than the government. Class actions against Amazon in the Western District of Washington allege the company passed unlawful tariff costs onto customers instead of absorbing them as the importer of record. A proposed nationwide class action was filed against Lululemon in the Eastern District of Michigan on March 27, 2026, asserting unjust enrichment and arguing the company is pursuing a “double recovery” by seeking government refunds while retaining the higher prices it charged shoppers. Nike has faced similar suits. The cases seek restitution for the period between February 2025, when the IEEPA tariffs took effect, and late February 2026, when they were terminated.
With the IEEPA duties gone, the Section 122 replacement under appeal, and the universal refund question heading to the Federal Circuit, the next round of rulings will decide how much of the $166 billion actually finds its way back to importers and, indirectly, to the customers who paid the markups.