Supreme Court strikes down IEEPA tariffs

Summary

The U.S. Supreme Court ruled 6-3 on February 20, 2026, that the International Emergency Economic Powers Act does not grant the President authority to impose tariffs. The ruling affirmed lower court decisions and terminated most of the Trump administration's 2025 tariff regime. IEEPA-based tariffs expired at midnight on February 24, 2026. The Section 122 tariffs imposed to replace them were themselves struck down by the Court of International Trade on May 7, 2026, but a Federal Circuit stay kept them in collection until they expired on July 24, 2026.

What happened

The Court held that IEEPA's authority to "regulate . . . importation" does not authorize the President to impose tariffs, reasoning that the power to regulate does not include the power to tax, which Congress grants separately and expressly. The Federal Circuit had characterized the tariffs as "unbounded in scope, amount, and duration" in August 2025. Within hours of the ruling, Trump announced a replacement 10% global tariff under Section 122 of the Trade Act of 1974 (which is capped at 15% and expires after 150 days by statute). On May 7, 2026, the Court of International Trade ruled 2-1 that the Section 122 tariffs also exceeded presidential authority; the government appealed, the Federal Circuit issued an administrative stay May 12, 2026 and granted a stay pending appeal June 11, 2026, staying the CIT's injunction, which had covered only the three named plaintiffs, so the Section 122 duty remained in collection until it expired on July 24, 2026. Approximately $166 billion in tariff revenue collected under IEEPA is potentially subject to refund; CBP has since deployed Phase 1 of its CAPE refund functionality within ACE and begun processing IEEPA refund claims in spring 2026.

Impact on the United States

Importers who paid IEEPA duties since February 2025 face potential refund claims, creating accounting and legal uncertainty for businesses; CBP began an operational refund process in spring 2026, though full refunds are ongoing. The federal budget, which collected $264 billion in customs duties in 2025 (vs. $79 billion in 2024), faces potential refund liabilities. The Section 122 replacement tariffs were struck down by the CIT (May 7, 2026) but remained in collection under a Federal Circuit stay pending appeal until their statutory expiration on July 24, 2026.

Global ripple effects

The ruling and rapid replacement with Section 122 tariffs continued to affect trading partners' retaliatory postures and ongoing trade negotiations.

Documented effects

1. Feb 2026The Supreme Court ruled 6-3 that IEEPA does not authorize tariffs; IEEPA tariffs terminated February 24, 2026.[1]
2. May 2026Approximately $166 billion was collected under the IEEPA tariffs (per Customs and Border Protection court disclosures); the Penn Wharton Budget Model estimated up to roughly $175 billion in potential refunds with interest. CBP deployed Phase 1 of its CAPE refund functionality within ACE and began processing IEEPA refund claims in spring 2026.[2][4]
3. Feb 2026Trump imposed a 10% global Section 122 tariff as a replacement effective February 24, 2026, with a statutory 150-day expiration (July 23-24, 2026).[1]
4. Jun 2026The Court of International Trade struck down the Section 122 replacement tariffs 2-1 on May 7, 2026 as exceeding presidential authority; the Federal Circuit issued an administrative stay (May 12) and a stay pending appeal (June 11, 2026), staying the CIT's injunction (which had covered only the three named plaintiffs), so the 10% Section 122 duty remained in collection until it expired on July 24, 2026.[3][5]
5. Jul 24, 2026The 10% Section 122 surcharge expired July 24, 2026 at the end of its 150-day statutory period and was replaced with new Section 301 tariffs.[6][7]
6. Aug 4, 2026CBP told the Court of International Trade on Aug. 4, 2026 that nearly $129 billion in potential and certified refunds had been accepted for processing and about $100 billion had been certified and sent to Treasury for payment, about 60% of the roughly $166 billion collected.[9]
7. Aug 2026The government appealed the Court of International Trade's refund order, arguing in its Federal Circuit brief that refunding duties to non-party importers "cannot possibly be squared with" Trump v. CASA; refunds for more complex entries remain on hold.[11]
8. Sep 15, 2026A Sept. 15, 2026 CBP court declaration put refunds certified and sent to Treasury at about $122 billion, including interest, as of Sept. 11. Refunds go to the importers of record, not to consumers who paid higher prices.[10]

Why this is rated severe

The ruling invalidated $166B in collected tariffs, creating major refund and budget uncertainty; harm is the disruption from a year of unlawful tariffs now unwound.

IEEPA tariffs terminated February 24, 2026; the Section 122 replacement, struck down by the CIT May 7, 2026 but kept in collection under a Federal Circuit stay, expired July 24, 2026

Corrections & updates [6]

Every change to a fact on this page after publication is logged here, newest first.

1. Sep 29, 2026UpdatedStatus

   The 10% Section 122 surcharge ran for its 150-day statutory period and expired on July 24, 2026, under Proclamation 11012. The Yale Budget Lab reports it was replaced with new tariffs under Section 301. It had been in collection under a Federal Circuit stay pending appeal.[6][7]

2. Sep 29, 2026ClarifiedSummary

   Restated the holding as the Court gave it: IEEPA's authority to "regulate . . . importation" does not include the power to impose tariffs (a statutory holding, per the Congressional Research Service), rather than a ruling that the taxing power "cannot be delegated".[1]

   + Show previous and current text- Hide previous and current text

   Previously

   The Court held that tariffs constitute a branch of the taxing power reserved to Congress under Article I and cannot be delegated via IEEPA. The Federal Circuit had characterized the tariffs as "unbounded in scope, amount, and duration" in August 2025. Within hours of the ruling, Trump announced a replacement 10% global tariff under Section 122 of the Trade Act of 1974 (which is capped at 15% and expires after 150 days by statute). On May 7, 2026, the Court of International Trade ruled 2-1 that the Section 122 tariffs also exceeded presidential authority; the government appealed, the Federal Circuit issued an administrative stay May 12, 2026 and granted a stay pending appeal June 11, 2026, so the Section 122 duty continued to be collected from all importers except the three named plaintiffs until it expired on July 24, 2026. Approximately $166 billion in tariff revenue collected under IEEPA is potentially subject to refund; CBP has since deployed Phase 1 of its CAPE refund functionality within ACE and begun processing IEEPA refund claims in spring 2026.

   Now

   The Court held that IEEPA's authority to "regulate . . . importation" does not authorize the President to impose tariffs, reasoning that the power to regulate does not include the power to tax, which Congress grants separately and expressly. The Federal Circuit had characterized the tariffs as "unbounded in scope, amount, and duration" in August 2025. Within hours of the ruling, Trump announced a replacement 10% global tariff under Section 122 of the Trade Act of 1974 (which is capped at 15% and expires after 150 days by statute). On May 7, 2026, the Court of International Trade ruled 2-1 that the Section 122 tariffs also exceeded presidential authority; the government appealed, the Federal Circuit issued an administrative stay May 12, 2026 and granted a stay pending appeal June 11, 2026, so the Section 122 duty continued to be collected from all importers except the three named plaintiffs until it expired on July 24, 2026. Approximately $166 billion in tariff revenue collected under IEEPA is potentially subject to refund; CBP has since deployed Phase 1 of its CAPE refund functionality within ACE and begun processing IEEPA refund claims in spring 2026.

3. Sep 29, 2026ClarifiedSource

   Tier labels corrected: Skadden and Greenberg Traurig client alerts and the Mallory Group blog are specialist analyses (Tier 3), not major news outlets. The CRS Legal Sidebar is dated February 23, 2026 and the Mallory Group post June 16, 2026.[1][3][4][5]

4. Sep 29, 2026UpdatedKey facts

   Updated: two passages still said the Section 122 replacement tariff "continues to be collected". It expired on July 24, 2026 (Federal Register; CBS News), and those passages now use the past tense.[6][8]

5. Sep 29, 2026UpdatedKey facts

   Updated with refund progress: in an Aug. 4, 2026 court filing CBP said nearly $129 billion in potential and certified refunds had been accepted for processing and about $100 billion had been certified and sent to Treasury, about 60% of the roughly $166 billion collected (CNBC). A Sept. 15 CBP declaration put the certified total at about $122 billion, including interest, as of Sept. 11 (The Center Square). The government has appealed the court-ordered refund process to the Federal Circuit (The Conference Board).[9][10][11]

   Previously

   ~$166B in IEEPA tariff revenue potentially refundable; CBP began processing refunds in spring 2026

   Now

   ~$166B in IEEPA tariffs collected; about $100B certified for refund to importers by early August 2026

6. Sep 29, 2026ClarifiedSummary

   The entry said the Section 122 duty kept being collected "from all importers except the three named plaintiffs" until it expired. The CIT's injunction covered only those three plaintiffs, and on June 11, 2026 the Federal Circuit stayed that injunction pending appeal. The wording now says only that the duty remained in collection until it expired on July 24, 2026.[3][5]

Sources [11]