3 minute read | February.21.2026
On February 20, 2026, the Supreme Court struck down the sweeping tariff regime the Trump administration imposed last year under the International Emergency Economic Powers Act (IEEPA). Enacted in 1977, IEEPA grants the President certain economic powers in response to foreign threats, but does not explicitly reference tariffs and had never before been used to impose them.
Writing for a 6-3 majority, Chief Justice John Roberts affirmed the August 29, 2025 ruling of the U.S. Court of Appeals for the Federal Circuit, which found there was no textual basis for imposing tariffs under IEEPA, and remanded the case to the U.S. Court of International Trade (CIT) to address the question of appropriate remedies for importers. To date, importers have paid an estimated $175 billion in IEEPA tariffs. If the administration opposes refunds, further litigation is likely, and the question of appropriate remedies could ultimately return to the Supreme Court should it grant certiorari—a process that could take months or even years.
Although IEEPA grants the President various economic tools including the ability to “regulate … importation,” the Supreme Court determined that those statutory powers do not encompass the authority to impose tariffs, which reflects a form of taxation different in kind than the powers enumerated in IEEPA. The majority also rejected reliance on the Trading with the Enemy Act, and a judicial decision applying that statute, as well as historical arguments involving wartime powers, finding they did not support the peacetime imposition of tariffs under IEEPA. Three Justices reached this conclusion by applying the “major questions doctrine,” which requires clear congressional authorization to support such extraordinary economic measures. Even without the application of that doctrine, however, three additional Justices agreed the statute does not grant tariff powers.
The Court further underscored two constitutional constraints. First, absent statutory authorization, there is no independent Article II basis for the President to impose tariffs. Second, interpreting IEEPA to authorize tariffs could render the statute partially unconstitutional because Article I expressly prohibits taxes on exports. However, the decision leaves open the possibility that Congress could amend IEEPA to expressly authorize tariffs. Justices Kavanaugh, Thomas and Alito dissented, disagreeing with the majority’s analysis of text and precedent, and relying on foreign affairs powers, emergency authority, and originalist separation-of-powers principles to read IEEPA broadly.
The ruling leaves significant uncertainty regarding refunds of tariffs already collected. The Court affirmed the Federal Circuit and did not address remedies, placing initial responsibility with the CIT. The CIT previously indicated that it possesses broad residual jurisdiction under 28 U.S.C. § 1581(i) to order reliquidation and refunds. However, the government may contest the CIT’s authority to order refunds, seek to delay while exploring alternative statutory bases, or refuse to establish an administrative refund process.
Orrick is helping clients navigate the implications of this decision for their businesses—including advising on proactive internal measures to position themselves for refunds, monitoring follow-on orders and opinions, and developing litigation and protest strategies for prospective recoveries.