U.S. Tariff Lawsuits: Supreme Court Ruling and $166B Refunds

The Trump tariff lawsuits are a cluster of challenges filed by states, small businesses, and importers against the sweeping import duties the Trump administration imposed starting in February 2025 under the International Emergency Economic Powers Act. On February 20, 2026, the Supreme Court ruled 6–3 that IEEPA does not authorize tariffs, invalidating the duties. Hours later the administration replaced them with a 10 percent tariff under a different statute, and that replacement is now the subject of its own lawsuits. Separately, more than 2,000 importers are fighting in court for refunds of roughly $166 billion in duties already collected.¹

The Tariffs That Started It

Beginning in February 2025, President Trump signed a series of executive orders declaring national emergencies tied to drug trafficking, illegal immigration, and trade deficits, and used those declarations to impose tariffs under IEEPA, a 1977 statute written for sanctions and embargoes. The tariffs included a 25 percent duty on most goods from Canada and Mexico, rates between 10 and 145 percent on Chinese imports, and a 10 percent baseline tariff on goods from nearly every other country. On April 2, 2025, the administration announced additional “reciprocal” or “Liberation Day” tariffs on dozens of trading partners at rates as high as 49 percent.² No president in IEEPA’s nearly 50-year history had ever used the statute to impose tariffs.³

Who Sued and What They Argued

The legal response came quickly, from both private businesses and state governments.

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, a Pennsylvania fishing retailer; Genova Pipe of Utah; MicroKits of Virginia; and Terry Precision Cycling of Vermont.⁴ Two days later, California Governor Gavin Newsom and Attorney General Rob Bonta filed a separate challenge in the U.S. District Court for the Northern District of California.⁵ On April 23, 2025, a coalition of twelve state attorneys general, led by Oregon and Arizona, filed a third suit in the Court of International Trade.⁶ A fourth case, brought by the toy company Learning Resources and another small business, was filed in the U.S. District Court for the District of Columbia.⁷

The arguments across these cases overlapped. The plaintiffs contended that Article I, Section 8 of the Constitution gives the taxing power exclusively to Congress, and that IEEPA’s authorization for the president to “regulate… importation” during an emergency does not include the power to tax. They argued that trade deficits do not qualify as the “unusual and extraordinary threat” IEEPA requires, and that under the major questions doctrine, a power this sweeping needs explicit congressional authorization the statute does not provide.⁸⁴

The government countered that IEEPA’s broad emergency language covered tariffs, that the president’s emergency declaration was a non-reviewable political question, and that tariffs are a traditional tool for regulating imports.⁹

How the Lower Courts Ruled

In May 2025, the Court of International Trade granted summary judgment for the plaintiffs in V.O.S. Selections, holding that the tariffs exceeded IEEPA’s scope and issuing a permanent injunction.¹⁰ On May 28, 2025, the same court granted summary judgment for the states in Oregon v. Trump and enjoined the tariffs.¹¹

California’s separate case took a different path. On June 2, 2025, Judge Jacqueline Scott Corley of the Northern District of California dismissed it, holding that tariff disputes fall within the Court of International Trade’s exclusive jurisdiction. She dismissed the case outright, at California’s request, so the state could appeal the jurisdictional question to the Ninth Circuit, where it was later stayed pending the Supreme Court’s ruling.¹²⁵ The D.C. district court granted a preliminary injunction in Learning Resources, though the same jurisdictional question loomed over that case.

The Federal Circuit stayed the CIT’s injunction in Oregon v. Trump and heard the government’s appeal en banc. On August 29, 2025, it affirmed, holding that IEEPA did not authorize the tariffs and describing them as “unbounded in scope, amount, and duration.”¹¹ On September 9, 2025, the Supreme Court granted certiorari and consolidated V.O.S. Selections with Learning Resources. Oral argument was heard on November 5, 2025.⁷

The Supreme Court’s February 2026 Decision

On February 20, 2026, the Supreme Court ruled that IEEPA does not authorize the president to impose tariffs. Chief Justice John Roberts wrote the majority opinion for six justices. The decision rested on two points: the text of IEEPA does not mention tariffs or duties, and the power to tax imports is a core congressional function that cannot be delegated without unmistakably clear statutory language.³

Roberts wrote that because the president was asserting “the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,” he needed to show “clear congressional authorization to exercise it.” The Court found none. IEEPA’s grant of authority to “regulate… importation” did not extend to taxation, and no president in the statute’s half-century had previously read it that way.¹³

The justices divided on reasoning. A three-justice plurality of Roberts, Gorsuch, and Barrett invoked the major questions doctrine. Justices Sotomayor, Kagan, and Jackson concurred in the result through ordinary statutory interpretation, without relying on that framework. Justices Thomas and Kavanaugh dissented, with Thomas arguing that the nondelegation doctrine does not apply to import duties.¹⁴

The Court affirmed the Federal Circuit’s judgment in V.O.S. Selections. It vacated the D.C. district court’s ruling in Learning Resources and ordered that case dismissed for lack of jurisdiction, confirming that the Court of International Trade has exclusive authority over tariff challenges.³ The ruling voided both the fentanyl-related tariffs that began in February 2025 and the April 2025 reciprocal tariffs, with potential refund liability estimated at up to $175 billion.¹⁴

The Replacement Tariff and a New Round of Lawsuits

The administration moved within hours. On the afternoon of February 20, 2026, Trump signed Executive Order 14389, “Ending Certain Tariff Actions,” which terminated the collection of all IEEPA-based duties under nine prior executive orders. Customs and Border Protection stopped collecting them effective February 24, 2026.¹⁵¹⁶

At the same time, the president issued Proclamation No. 11012, imposing a new 10 percent global tariff under Section 122 of the Trade Act of 1974. That statute authorizes temporary tariffs to address “large and serious balance-of-payments deficits,” and the proclamation cited the United States’ $1.2 trillion goods trade deficit in 2025.¹⁷ Section 122 caps tariff rates at 15 percent and limits them to 150 days without congressional action; the new tariff is scheduled to expire on July 24, 2026. It applies uniformly to all countries, with exceptions for goods covered by USMCA, certain critical minerals and pharmaceuticals, energy products, and items already subject to Section 232 duties.¹⁸

The replacement drew a lawsuit almost immediately. On March 5, 2026, a coalition of 24 states filed suit in the Court of International Trade, again captioned Oregon v. Trump. Attorneys general from New York, Oregon, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington, and Wisconsin joined, along with the governors of Kentucky and Pennsylvania.¹⁹²⁰

The states argued that balance-of-payments deficits are a distinct concept from trade deficits, and that the administration was misapplying Section 122. They pointed to inconsistent application and country- and product-specific exemptions as inconsistent with any genuine payments crisis.²¹

On May 7, 2026, a three-judge panel of the Court of International Trade ruled 2–1 that the Section 122 tariffs were “unlawful,” “invalid,” and “unauthorized by law,” finding that current economic conditions do not amount to the “large and serious balance-of-payments deficits” the statute requires.²² The court granted relief only to three plaintiffs that established standing as direct importers: the State of Washington, Burlap and Barrel (a New York spice importer), and Basic Fun (a Florida toy company). The 23 other state plaintiffs had their claims dismissed for lack of standing.²³

The court ordered the government to stop collecting the tariff from those three plaintiffs and to refund their past payments, but declined to issue a nationwide injunction. On June 11, 2026, the Federal Circuit stayed the ruling pending appeal, saying the administration was “likely to succeed” on the merits.²⁴

The Fight Over $166 Billion in Refunds

The Supreme Court’s IEEPA ruling resolved the legality question but opened a financial one. The government collected roughly $166 billion in IEEPA tariffs over about a year, and more than 2,000 importers have filed suit in the Court of International Trade seeking refunds.¹

The Court of International Trade appointed Senior Judge Richard K. Eaton as the sole judge to handle IEEPA refund cases. In late March and early April 2026, Judge Eaton issued a series of orders directing CBP to refund all IEEPA tariff payments, including duties on entries that had already been “finally liquidated,” the point at which assessments are ordinarily considered closed. The orders applied across the board, not just to importers who had sued.²⁵

The government appealed. The Justice Department argued that the Supreme Court’s 2025 ruling in Trump v. CASA prohibited federal courts from issuing “universal injunctions” benefiting non-parties, and that the CIT lacked authority to order refunds for importers who had not sued. Judge Eaton rejected that argument, reasoning that the CIT’s exclusive nationwide jurisdiction and the Constitution’s requirement that tariffs be applied uniformly set it apart from ordinary federal courts.²⁶

As of mid-2026, the administration has approved more than $85 billion in refunds for unliquidated entries, processed through CBP’s automated CAPE system. The White House maintains those refunds are being issued voluntarily. The government continues to resist repaying tens of billions in duties on entries it considers finalized, arguing those importers must file individual lawsuits to recover.²⁷ Taxpayers are accruing roughly $700 million per month in additional interest on the unreturned funds.¹

On June 4, 2026, Terry Precision Cycling, one of the original V.O.S. Selections plaintiffs, filed a motion to certify a class action on behalf of all importers whose refund claims fall outside the CAPE system. The motion argued that class treatment would spare tens of thousands of importers from filing their own suits. At a June 9, 2026 hearing, Judge Eaton expressed skepticism, saying it would be “disappointing” to go down that path.²⁸ The government’s appeal of the universal refund order remains pending before the Federal Circuit.

Where Things Stand

As of mid-2026, the picture is layered. The IEEPA tariffs have been struck down and formally terminated, but the refund fight over more than $160 billion in collected duties is still being litigated at the Court of International Trade and the Federal Circuit. The replacement Section 122 tariff was invalidated by the CIT in May 2026, but the Federal Circuit stayed that ruling and said the government is likely to win on appeal. The Section 122 tariff is scheduled to lapse on July 24, 2026, under the statute’s 150-day limit, and the administration has signaled it will transition to longer-term tariffs through Section 301 investigations and other trade statutes.¹⁸ The Supreme Court’s holding that IEEPA cannot be used for tariffs is settled law; the broader question of how much unilateral tariff authority the president retains under other statutes is still being fought out, case by case.

1
Cato Institute. One Year After Liberation Day: Here’s What We Know and What We Don’t
2
Britannica. International Emergency Economic Powers Act
3
Supreme Court of the United States. Learning Resources, Inc. v. Trump, No. 24-1287
4
Liberty Justice Center. V.O.S. Selections, Inc. v. Trump
5
Clearinghouse.net. State of California v. Trump
6
NPR. Trump Tariff Lawsuits States
7
SCOTUSblog. Learning Resources, Inc. v. Trump
8
Colorado Governor’s Office. Colorado Helps Lead Lawsuit to Stop Trump Administration’s Illegal Tariffs
9
ASI Central. Arguments Heard in Court Case That Aims to Have Trump’s Tariffs Kiboshed
10
Liberty Justice Center. Landmark Victory for Small Businesses: Supreme Court Strikes Down Liberation Day Tariffs
11
Clearinghouse.net. State of Oregon v. Trump
12
Politico. Judge Dismisses California Tariffs Lawsuit
13
Lawfare. Supreme Court Rules Against Trump’s Emergency Power Tariffs
14
Quinn Emanuel Urquhart & Sullivan. Client Alert: Supreme Court Strikes Down IEEPA Tariffs
15
White House. Ending Certain Tariff Actions
16
White & Case. United States Terminates IEEPA-Based Tariffs Following Supreme Court Decision
17
Federal Register. Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems
18
White & Case. Trump Administration Imposes 10% Section 122 Tariff Plan to Replace IEEPA Tariffs
19
Politico. States Sue Trump Over Tariffs
20
The Guardian. Trump Administration Tariff Lawsuit
21
New York Attorney General. Attorney General James Leads Lawsuit to Stop Trump Administration’s Latest Illegal Tariffs
22
ASIL. The U.S. Court of International Trade Invalidates Trump’s 10% Global Tariff
23
U.S. Court of International Trade. Slip Op. 26-47
24
Inside Trade. Appeals Court: Administration Likely to Succeed in Section 122 Tariff Appeal
25
Foley & Lardner. What Every Multinational Should Know About the Government’s Appeal of Judge Eaton’s Universal IEEPA Tariff Refunds Order
26
Thompson Hine. Trump Administration Appeals CIT’s IEEPA Tariff Refund Order
27
Politico. Trump Tariff Case: Government Seeks to Keep Billions
28
Green Worldwide Shipping. CAPE Phase 3 for IEEPA Tariff Refunds on Track for End of July