The lawsuits over Trump’s tariffs reached their peak on February 20, 2026, when the U.S. Supreme Court ruled 6–3 that the International Emergency Economic Powers Act does not give the president authority to impose tariffs, invalidating the sweeping import duties the administration had put in place beginning in early 2025. The decision has since triggered a fight over roughly $166 billion in refunds, prompted the White House to pivot to a different tariff statute that was itself struck down and then temporarily reinstated on appeal, and opened new investigations that could produce fresh duties by late July 2026.
The Tariffs That Started the Fight
Between February and April 2025, President Trump signed four executive orders relying on IEEPA to impose tariffs on imports. Three orders issued February 1, 2025, targeted goods from Canada, Mexico, and China, citing an influx of illegal drugs. A fourth, signed April 2, 2025, addressed what the administration called “large and persistent” trade deficits and applied tariffs globally, with rates on Chinese goods reaching 125%.1Axios. State Attorneys General Lawsuit Trump Tariffs The administration’s sole legal hook was IEEPA’s authorization to “regulate” importation during a declared national emergency.
Who Sued
Two main challenges reached the courts. On April 14, 2025, the Liberty Justice Center filed suit in the U.S. Court of International Trade on behalf of five small businesses: V.O.S. Selections, a New York wine importer; FishUSA; Genova Pipe; MicroKits; and Terry Precision Cycling.2Liberty Justice Center. V.O.S. Selections, Inc. v. Trump Nine days later, twelve state attorneys general led by Oregon filed a parallel suit in the same court. The plaintiff states were Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, and Vermont.3New York Attorney General. Oregon et al. v. Trump Complaint Both sets of plaintiffs argued the same thing: IEEPA does not authorize tariffs, and the president had usurped Congress’s constitutional power to lay and collect duties.
The cases were consolidated before a three-judge panel of the Court of International Trade, which granted summary judgment for the challengers on May 28, 2025, and permanently enjoined the tariffs. The panel wrote that “IEEPA does not confer such unbounded authority.”4U.S. Court of International Trade. Slip Opinion 25-66 The Federal Circuit stayed the injunction the following day but then affirmed the ruling en banc on August 29, 2025.5U.S. Court of Appeals for the Federal Circuit. V.O.S. Selections v. Trump Opinion
What the Supreme Court Held
Chief Justice John Roberts wrote the majority opinion in the consolidated cases, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson.6SCOTUSblog. A Breakdown of the Court’s Tariff Decision The Court’s reasoning rested on two points.
First, IEEPA authorizes the president to “regulate” importation, but “regulate” does not include the power to tax. Tariffs are a “branch of the taxing power” the Constitution vests in Congress, and Congress has historically delegated tariff authority only in explicit terms with limits on scope, duration, and procedure. In IEEPA’s nearly fifty-year history, no president had ever used it to impose tariffs.7U.S. Supreme Court. Learning Resources, Inc. v. Trump Opinion
Second, a three-justice plurality of Roberts, Gorsuch, and Barrett applied the “major questions doctrine,” holding that when the executive claims power of “vast economic and political significance,” courts should demand clear congressional authorization. IEEPA never mentions tariffs, duties, or taxes.6SCOTUSblog. A Breakdown of the Court’s Tariff Decision
Justice Kagan, joined by Sotomayor and Jackson, concurred but wrote that the major questions doctrine was unnecessary because ordinary statutory interpretation reached the same result. Justice Jackson wrote separately to point to legislative history from IEEPA and its predecessor, the Trading with the Enemy Act, confirming that Congress never intended the statute to cover tariffs.
Justices Thomas, Kavanaugh, and Alito dissented. Kavanaugh, writing for the three, argued that “regulate importation” and “adjust imports” are functionally indistinguishable and that the major questions doctrine had never been applied to a foreign affairs statute. He warned the ruling would force the government to refund “billions of dollars” in collected duties. Thomas wrote separately to argue that historical practice supported presidential tariff power under IEEPA.6SCOTUSblog. A Breakdown of the Court’s Tariff Decision
The $166 Billion Refund Fight
The Supreme Court’s opinion did not spell out how importers would recover the duties they had already paid. That question fell to the lower courts. On March 4, 2026, Judge Richard Eaton of the Court of International Trade ordered U.S. Customs and Border Protection to process refunds on all entries subject to IEEPA duties, an estimated $166 billion covering more than 330,000 importers and 53 million entries.8Fox Rothschild. Court Orders $166 Billion in Tariff Refunds Then Pauses Them
CBP objected on logistical grounds. The agency estimated 4.4 million labor hours of manual processing and said its Automated Commercial Environment system could not isolate IEEPA-specific duties from other tariff entries. Two days later, Judge Eaton suspended the immediate compliance requirement but did not vacate the refund order.8Fox Rothschild. Court Orders $166 Billion in Tariff Refunds Then Pauses Them
CBP started a phased refund program through a new system called CAPE (Consolidated Administration and Processing of Entries) on April 20, 2026. By late April, importers and brokers had submitted over 75,000 CAPE declarations covering 11.2 million entries, and roughly 1.74 million entries had cleared validation.9Sidley Austin. IEEPA Tariff Refund Claims Key Considerations The administration did not contest refunds on roughly $85 billion in duties still in the pipeline that had not been finalized. It did challenge the court’s authority to order refunds for entries where liquidation had become final, arguing those required case-by-case judicial orders.
On June 2, 2026, the Department of Justice appealed the nationwide refund order to the Federal Circuit, arguing it amounted to an impermissible universal injunction benefiting non-parties. Judge Eaton has maintained that the Court of International Trade’s exclusive nationwide jurisdiction over customs matters distinguishes it from ordinary district courts.10Thompson Hine. Trump Administration Appeals CIT’s IEEPA Tariff Refund Order That appeal is pending.
The Administration’s Pivot to Section 122
The same day the Supreme Court issued its ruling, President Trump signed Proclamation 11012, imposing a new 10 percent global tariff under Section 122 of the Trade Act of 1974.11Federal Register. Proclamation 11012: Imposing a Temporary Import Surcharge Section 122 lets the president impose tariffs up to 15 percent for 150 days when the country faces “large and serious balance-of-payments deficits.” The new tariff took effect February 24, 2026, and is set to expire July 24, 2026.
The proclamation carved out energy products, critical minerals, pharmaceuticals, certain electronics, passenger vehicles and auto parts, aerospace products, and certain agricultural items including beef, tomatoes, and oranges. Goods entering duty-free under the USMCA and textiles qualifying under CAFTA-DR were also exempt.
A 24-state coalition co-led by the attorneys general of Oregon, California, Arizona, and New York filed a new challenge in the Court of International Trade on March 5, 2026. The states argued the administration was mischaracterizing a trade deficit as a “balance-of-payments deficit,” a concept tied to specific 1970s economic metrics they said no longer apply under the modern floating exchange-rate system.12Oregon Department of Justice. AG Rayfield Leads Multistate Lawsuit Against Trump Over New Illegal Tariffs The Liberty Justice Center filed a parallel private-business challenge on behalf of Burlap and Barrel, a spice importer, and Basic Fun, a toy company.13Duane Morris. New Section 301 Investigations, IEEPA Tariff Refund Developments, Legal Challenges Section 122
On May 7, 2026, a three-judge CIT panel ruled 2–1 that the Section 122 tariffs were “invalid” and “unauthorized by law.” The majority found the administration had failed to identify genuine balance-of-payments deficits using the metrics Congress had in mind in 1974, relying instead on trade deficits and current account figures, which the court treated as legally distinct.14U.S. Court of International Trade. Slip Opinion 26-47 Relief was narrow. Only the three importer-plaintiffs (the State of Washington, Burlap and Barrel, and Basic Fun) received injunctive protection and refund rights. The court declined to issue a nationwide injunction, citing a recent Supreme Court decision limiting lower courts’ power to grant such relief.15ASIL. The U.S. Court of International Trade Invalidates Trump’s 10% Global Tariff
The government appealed the next day. On June 11, 2026, the Federal Circuit granted a stay pending appeal, finding the government was “likely to succeed on the merits.” The 10 percent tariff continues to be collected from all other importers while the appeal proceeds.16ABC News. Appeals Court: US Government Collecting 10% Tariffs Now
Section 301 Investigations Waiting in the Wings
Even before the Section 122 tariff was set to expire, the administration opened new fronts. In March 2026, the U.S. Trade Representative launched two sets of Section 301 investigations. The first, initiated March 11, targeted 16 economies including China, the European Union, Japan, South Korea, and India, citing structural overcapacity in sectors ranging from steel and semiconductors to batteries and automobiles.13Duane Morris. New Section 301 Investigations, IEEPA Tariff Refund Developments, Legal Challenges Section 122
The second, launched March 12, examined 60 economies for allegedly failing to prohibit or enforce bans on imports of goods produced with forced labor. On June 2, 2026, the USTR determined those failures were “unreasonable” and “actionable” and proposed additional tariffs of 10 to 12.5 percent on all products from the targeted economies. Public hearings were scheduled for July 7, and the USTR signaled that the new tariffs could be ready to take effect by July 24, the same day the Section 122 tariff expires.17USTR. USTR Makes Findings and Proposes Action on 60 Section 301 Investigations
Where Things Stand
The IEEPA tariffs have been struck down for good. The refund process for the roughly $166 billion collected under them is partially underway through the CAPE system, but the government’s appeal of the nationwide refund order is pending at the Federal Circuit, and importers whose entries have already been liquidated face the most uncertainty.10Thompson Hine. Trump Administration Appeals CIT’s IEEPA Tariff Refund Order The 10 percent Section 122 tariff remains in effect for most importers under the Federal Circuit’s stay, though it is scheduled to expire July 24, 2026.16ABC News. Appeals Court: US Government Collecting 10% Tariffs Now The Section 301 tariffs the USTR has proposed have not yet faced judicial challenge.