The U.S. Supreme Court is poised to deliver a landmark decision that could fundamentally alter the landscape of American trade policy, presidential emergency powers, and the fate of billions of dollars in tariffs collected under the International Emergency Economic Powers Act (IEEPA). As the justices weigh the legality of former President Donald Trump’s sweeping use of IEEPA to impose tariffs on a wide array of imports, importers across the country are bracing for a ruling that could trigger a complex, high-stakes refund process—and reshape the boundaries of executive authority in times of national crisis.
This legal drama has been brewing since early 2025, when President Trump invoked IEEPA to levy two major sets of tariffs. The first, known as the trafficking tariffs, targeted imports from Canada, Mexico, and China, citing threats posed by international drug cartels and human trafficking organizations. According to the administration, these measures were designed to “deal with” the flow of illicit drugs and related criminal activity—especially at America’s borders. The second set, dubbed the reciprocal tariffs, imposed a universal 10% duty on all imports and higher, country-specific rates of up to 50% on goods from 57 countries. The rationale? Trump argued that persistent U.S. trade deficits constituted a national emergency, and that these tariffs would counter what he described as unfair trade practices and economic policies abroad.
But almost as soon as the tariffs took effect, they were challenged in federal courts by a diverse group of plaintiffs, from small educational businesses to state governments. The legal battle quickly focused on two critical questions: Did IEEPA actually grant the president the authority to impose such tariffs? And if so, did Congress overstep its constitutional bounds by delegating tariff authority to the executive branch without adequate checks?
On May 28, 2025, the U.S. Court of International Trade (CIT) issued a bombshell opinion, ruling that IEEPA did not authorize either the trafficking or reciprocal tariffs and permanently enjoined their enforcement. Just a day later, the federal district court in Washington, D.C. reached a similar conclusion, albeit for slightly different reasons. The government swiftly appealed, and on August 29, 2025, the U.S. Court of Appeals for the Federal Circuit affirmed the CIT’s decision. However, the Federal Circuit stayed its own ruling, pending review by the Supreme Court, meaning the tariffs remained in effect for the time being.
The Supreme Court agreed to hear the case on September 9, 2025, and oral arguments were held on November 5. According to ArentFox Schiff, the justices appeared closely divided, with their questioning reflecting deep skepticism and searching analysis on both sides. Some justices, like Clarence Thomas and Samuel Alito, signaled openness to preserving the tariffs, suggesting that the power to “regulate importation” under IEEPA might encompass monetary measures like tariffs. Justice Amy Coney Barrett zeroed in on the statute’s reference to “licenses,” probing whether a licensing fee is meaningfully different from a tariff or tax. Justice Brett Kavanaugh raised the “lesser power” logic, wondering if the authority to impose an embargo might also allow for tariffs as a less drastic step.
On the other hand, Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson expressed serious doubts about the government’s position. They repeatedly questioned whether Congress’s use of the word “regulate” in IEEPA could really bear the weight of a sweeping new tariff regime—especially when Congress typically uses explicit terms like “tariff” or “duty” to delegate taxing power. These justices also highlighted constitutional concerns, referencing the “major questions” doctrine, which requires clear statutory language for economically significant actions, and the “nondelegation doctrine,” which demands reasonable checks on congressional delegations to the executive branch.
Chief Justice John Roberts opened with pointed skepticism about whether the case raises major-questions-doctrine issues, but otherwise remained mostly silent, leaving his position somewhat of a mystery. Justice Neil Gorsuch seemed to accept that the statute might permit the tariffs, but voiced strong concerns about the constitutionality of such a broad delegation of power. With the justices apparently split 3-3-3, the outcome is anything but certain, and the stakes—both legal and economic—are sky-high.
While the case works its way through the Court, importers remain liable for paying IEEPA tariffs. This is especially burdensome for companies with China-centric supply chains, who face layered tariffs and no exemptions under agreements like the United States-Mexico-Canada Agreement. The universal 10% duty and country-specific rates up to 50% have broad reach, affecting virtually every sector of the economy.
If the Supreme Court ultimately rules that the IEEPA tariffs are illegal, the tariffs would be revoked and importers could be eligible for refunds on duties paid since February 2025. However, as highlighted by Sandler, Travis & Rosenberg, refunds are not automatic. U.S. Customs law requires importers to take specific, time-sensitive actions to preserve their rights. For entries that have not yet been “liquidated” (the final calculation of duties owed, usually about 314 days after entry), importers may need to file post-summary corrections. For entries that have already been liquidated, importers must file formal protests within 180 days of liquidation—a strict, non-extendable deadline. Missing this window means forfeiting the right to a refund for those entries, with no exceptions.
Given the uncertainty, legal experts recommend that importers begin gathering all relevant records now. This includes pulling import data from the Automated Commercial Environment (ACE), assembling complete entry packets, and collecting proof of duty payments. For entries already liquidated but within the 180-day window, protests can be filed even before the Supreme Court’s decision, and later supplemented if the ruling is favorable.
There’s also the matter of where and how to seek refunds. The CIT has held that it has exclusive jurisdiction over claims challenging IEEPA tariffs under Section 1581(i) of Title 28, a ruling upheld by the Federal Circuit. However, arguments at the Supreme Court could affect this jurisdictional question, especially if the justices decide that IEEPA never granted tariff authority to the president in the first place.
As the legal battle rages on, the potential consequences reach far beyond the fate of a few importers or a handful of tariff payments. The Supreme Court’s decision will have profound implications for how the United States responds to national emergencies, the limits of presidential power, and the ongoing tug-of-war between Congress and the executive branch over trade policy. Whether the Court upholds, narrows, or strikes down the IEEPA tariffs, its ruling will set a precedent likely to shape American economic and constitutional law for years to come. For now, all eyes are on the nine justices, as businesses, policymakers, and legal scholars wait for a verdict that could send shockwaves through the global trading system.
