Supreme Court Invalidates “Reciprocal” Tariffs — Now What?

What Businesses Need to Know Regarding Continuing Duties — And Possible Refunds

On February 20, 2026, the U.S. Supreme Court in Learning Resources v. Trump held, 6-3, that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to unilaterally impose tariffs on products imported into the United States. The majority, per Chief Justice John Roberts, concluded that in this case the imposition of tariffs constitutes a tax; and that the power to tax—absent clear, explicit and specifically delimited delegation of such authority—is reserved to Congress under Article I of the U.S. Constitution.

Going forward, U.S. Customs & Border Protection (CBP) has issued guidance pursuant to Presidential order that, effective February 24, 2026, the IEEPA tariffs may no longer be collected. However, the President has ordered the imposition of a 10% duty on all nonexempt imports under the authority of Section 122 of the 1974 Trade Act, and announced expanded investigations under Section 301 of that Act and Section 232 of the 1962 Trade Expansion Act — a reminder that importers remain subject to an array of non-IEEPA Administration trade authorities, some of them product-specific (see below).

No Direction From Court

But the question of most immediate concern to businesses and their counsel was left unanswered: What about refunds for tariffs paid under the now-invalidated authority?

As Justice Brett Kavanagh noted in his dissent, “The Court says nothing about whether, and if so how, the Government should go about returning the billions of dollars it has collected from importers.”

The Court did not offer any direction on remedies for, or reimbursement of, previously collected duties. Most observers are assuming that guidance regarding a refund process will be forthcoming. During oral arguments last November, several justices — in discussing the likely complexity of the process — appeared to presume that if the tariffs were invalidated, such duties would be subject to reimbursement. Moreover, the Chief Justice’s comments in remanding the parallel VOS Selections case, which arrived via the D.C District and Circuit Courts, for lack of jurisdiction to the Court of International Trade (CIT) clearly indicate that when a process is devised, oversight of (as well as jurisdiction over matters arising under) it will lie with that Court.

Options for Tariff Refunds

Potential options for pursuing refunds include:

• The existing administrative process available under customs practice, including the filing of Post-Settlement Corrections (PSCs) for shipments not yet liquidated (a period that can extend as long as 314 days) or protests for products that are approaching or are past the liquidation deadline (protests may be filed up to 180 days post-liquidation).
• Possibly an automated process involving expanded use of the recently upgraded Automated Commercial Environment (ACE), which CBP has now mandated for all record keeping, and for refunds from PSCs and protests going forward.
• A distinct, case management process — which many observers expect — mandated by the CIT and developed by it and CBP for the purpose of servicing this particular category of reimbursements.
• Filing a claim in the CIT against CBP: Many importers have sued the CBP and the U.S. directly in the CIT (reportedly more than 1,500 complaints to date, including from such large importers as FedEx and CostCo). Those actions were stayed by the CIT pending the Court’s decision. The CIT may now lift the stay, although that is not automatic. Note that the CIT has already recently held that it has authority to “reliquidate” customs entries — that is, order refunds even if the entry has liquidated (AGS Co, Auto Sols. v. U.S. Customs & Border Protection), (Court of International Trade, December 15, 2025).

One important factor to bear in mind is that under U.S. regulations (19 C.F.R. Section 24.36) these remedies are available by law to Importers of Record. What recourse, if any, might be open to those further down the supply chain (manufacturers, retailers or consumers themselves) to whom the cost of duties may have been passed (whether totally or in part) remains to be seen. Much may depend upon the terms of individual contracts between such parties and their suppliers; some agreements might contain provisions requiring the importer to pursue – and share, if obtained – refunds if available. Absent such contractual terms, access to any recovery for those further down the chain who paid higher prices due to tariffs remains an open question; issues of proof and allocation may pose challenges (ditto for possible class actions).

Immediate Steps for Importers

For importers, the following steps are strongly recommended:

• Identify all IEEPA tariffs paid to date (via brokers’ records and ACE, and any other available resources).
• Assemble, organize and preserve all records relating to IEEPA entries, including duty payment records, entry summaries (7501s), invoices, packing lists and any internal accounting documents relating to tariffs.
• Determining the liquidation status (within the 314 days, normally) and proximity or lapsed time of protest deadlines (180 days from liquidation).
• Use existing administrative avenues—Post Summary Corrections, formal protests to CBP, extension requests—and make appropriate filings under 19 C.F.R. 1514 to preserve claims and rights.
• In consultation with counsel, consider filing an action in the CIT.
• Carefully review customer and supply agreements, particularly where tariff costs may have been passed on or shared, to determine any potential exposure to contractual obligations to pursue and possibly share in tariff refunds.

Tariff Provisions Still in Force

As noted above, the decision leaves untouched an array of other tariff authorities already available to the Administration. While some are constrained by procedural or substantive limitations, importers remain subject to these where applicable:

• Section 122 of the Trade Act of 1974: Authorizes temporary tariffs of no more than 15% and for no longer than 150 days (absent express Congressional approval for extension) to address significant balance-of-payments deficits (as already related, in express response to the Court’s ruling, the President has already ordered an imposition of a 10% global tariff under this authority).
• Section 232 of the Trade Expansion Act of 1962: Empowers the President, upon conclusion of an investigation and report, to “adjust the imports” by imposition of duties on products whose import is deemed to impair national security. Such tariffs have already been imposed on imports of steel, aluminum, copper, certain autos and auto parts, semiconductors, and certain timber and furniture; more investigations are pending.
• Section 301 of the 1974 Trade Act: Provides for antidumping tariffs, countervailing duties, and other actions where, following an investigation, foreign acts or practices are discriminatory and damaging to U.S. commerce (already in effect against a number of Chinese products and industries).
• Section 338 of the 1930 Tariff Act: A little-used authority allowing the President to increase tariffs up to 50% against a specific foreign country whose trade practices impose discriminatory burdens on U.S. commerce.
• Section 201 of the 1974 Trade Act: Provides for the imposition of duties in cases where foreign imports are deemed a cause or threat of serious injury to a U.S. industry—but only upon a formal ITC investigation, hearing and report.

Importers and others concerned should seek to remain informed not only about the refund process (when is one) but of the continually fluid tariff environment.

Phillips Lytle’s International Business Team is standing by to assist with any of these steps; and will continue to closely monitor all CBP and other government communications as this refund process guidance develops, and options and requirements become clearer.