Supreme Court Strikes Down President Trump’s IEPPA Tariffs

On February 20, 2026, the United States Supreme Court held that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the president to impose tariffs, affirming the U.S. Court of Appeals for the Federal Circuit's August 2025 ruling. Shortly after taking office, President Trump declared national emergencies under IEEPA to address 1) the influx of illegal drugs from Canada, Mexico and China, and 2) "large and persistent" trade deficits. Acting under those emergency declarations, the administration implemented two major sets of tariffs: “Trafficking and Immigration Tariffs” on nearly all imports from Canada, Mexico, and China, and “Reciprocal Tariffs” that imposed baseline tariffs on imports from virtually all other US trading partners, with varying rates on certain products and countries.

Several small businesses and a coalition of states challenged these measures in the U.S. Court of International Trade (“CIT”) and in federal district court. Both the CIT and U.S. Court of Appeals for the Federal Circuit held that IEEPA did not authorize the tariffs, and in August 2025, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, affirmed in relevant part those decisions. The Federal Circuit's decision was stayed to allow U.S. Supreme Court review, which affirmed the Federal Circuit’s decision by a vote of 6-3.  In its decision in Learning Resources, Inc. v. Trump (2026), the Supreme Court began with noting that the power to enact tariffs has long been understood as a “very clear … branch of the taxing power” that Congress wields under Article I, Section 8 of the U.S. Constitution. The Trump administration conceded that the President has no inherent Article II authority to impose tariffs, and relief solely on IEPPA’s statutory language which authorizes that President to “regulate … importation” to justify the IEPPA tariffs enacted by President Trump.

However, the Court concluded that IEPPA’s authority to “regulate … importation” of property does not include the power to impose tariffs. First, the Court noted that IEPPA does not explicitly mention “tariffs,” “duties,” or similar terms. Second, the Court held that “regulate” ordinarily means to “control or govern,” not to tax and raise revenue as the IEPPA tariffs were enacted to do. Moreover, the Court found it telling that in nearly 50 years, no President had used IEPPA to impose tariffs, instead relying on tariff statutes such as Section 301 of the Trade Act of 1974 or Section 232 of the Trade Expansion Act of 1962. In the majority’s view, the lack of historical precedent using IEPPA to levy tariffs confirmed that tariffs fall outside IEPPA’s intended scope. Notably, three Justices (Chief Justice John Roberts, Justice Neil Gorsuch, and Justice Amy Coney Barrett) concluded that the case implicated the “major questions doctrine,” which dictates that Congress must clearly authorize delegations of authority involving “vast economic and political significance,” particularly when a “core congressional power,” such as taxation, is at issue. While the Supreme Court’s opinion unquestionably struck down the IEPPA tariffs as unlawful, it raised a question as to what that means for those importers affected by the IEPPA tariffs. Notably, the Supreme Court’s majority opinion, as emphasized in Justice Kavanaugh’s dissent, did not address whether refunds must be issued or how any reimbursement process should occur.

Moreover, it may well be that the Supreme Court’s decision will not completely hamper President Trump’s goal to utilize tariffs to address purported trade deficits. Indeed, shortly after the decision was released, President Trump held a press conference where he announced he would impose tariffs under Section 122 of the Trade Act of 1974 to replace the IEPPA tariffs invalidated by the Supreme Court’s decision. President Trump made clear that he intended to use the 150-day time limit for Section 122 tariffs to start investigations to enable him to enact tariffs under Section 301 of the Trade Act of 1974, which the Supreme Court explicitly mentioned as a historical example by which past presidents have enacted tariffs, which are not time-bound or capped at a certain percentage. In the end, Section 301 tariffs could offer President Trump an avenue to enact tariffs through a statutory foundation that may withstand the Supreme Court’s scrutiny.

The Supreme Court's ruling removes IEEPA as a legal basis for tariff programs and creates a potential opportunity for importers to pursue recovery, though the refund process is currently uncertain and likely to be complex. Our attorneys here at Strauss Troy are ready and able to help companies evaluate both potential refund strategies, as well as ongoing exposure to tariffs enacted under non-IEPPA authorities. We are closely tracking any potential future litigation related to the refund process, as well as any new tariff initiatives put into place by the current administration. Please contact us if you have any questions.

Andrew D. White: adwhite@strausstroy.com or 513.629.9466