Will Scobey writes in Southern Ag Today: At the onset of 2025, President Trump laid tariffs on Mexico, Canada, and China under a claim of authority from the International Economic Emergency Powers Act (IEEPA). This act, passed in 1977, grants the president the authority to “regulate . . . importation” in response to a declared national emergency. President Trump claimed that “poisonous fentanyl” and “the extraordinary threat posed by illegal aliens” had led to national emergencies in the U.S., which justified the imposition of tariffs under IEEPA. Whether IEEPA actually allowed for a president to implement tariffs was a question raised in multiple lawsuits, and eventually the Supreme Court stepped in to provide their answer.
The Supreme Court’s Decision
Two separate cases were ultimately consolidated in the Supreme Court’s decision regarding the IEEPA tariffs. One casebegan in the Court of International Trade (CIT) when a group of businesses filed a complaint asserting that IEEPA did not authorize the president to impose tariffs. The second case, originally filed in the United States District Court for the District of Columbia, similarly challenged the scope of IEEPA’s authority. After both cases were appealed to the Supreme Court, the Court combined both cases in its decision of Learning Resources, Inc. v. Trump. There, the Supreme Court sought to answer the question which had prompted both lower court cases: Does IEEPA authorize the President to impose tariffs?
To resolve this dispute, the Supreme Court needed to determine whether “regulate . . . importation” included the authority to lay tariffs. First, the Court noted that the Constitution gives Congress the exclusive power to lay and collect taxes, which has historically included tariffs. According to the Court, when Congress wishes to confer its authority to lay taxes and tariffs it will do so “clearly.” The Court reasoned that “when Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits.”
Here, the Court ultimately determined that Congress had not explicitly conferred the authority to impose tariffs through IEEPA. In reaching this conclusion, the Court looked at precedent and the text of IEEPA itself. First, no President has ever relied on IEEPA to impose tariffs. Given this lack of precedent and the “breadth of authority” now being claimed under IEEPA, the Court concluded that the IEEPA tariffs were beyond the President’s “legitimate reach.” Second, and perhaps most importantly, the word “tariff” is not mentioned anywhere in IEEPA’s text. The Court reasoned that if Congress had intended for IEEPA to include the power to lay tariffs, it would have made that clear in IEEPA’s text, “as it consistently has in other tariff statutes.” Without any historical precedent or clear Congressional intent, the Court concluded in a 6-3 decision that IEEPA did not authorize the President to impose tariffs.
The Aftermath
The Court’s decision vacated the IEEPA tariffs, however it did not discuss the issue of potential refunds. Considering the massive impact of the IEEPA tariffs, this left many businesses wondering if and how refunds would be issued for the now vacated IEEPA tariffs. Following an order to begin issuing refunds from the CIT, U.S. Customs and Border Protection (CBP) outlined its new system for processing and issuing IEEPA refunds. The Consolidated Administration and Processing of Entries (CAPE) system is a digital portal where importers can file a refund claim for duties paid while the tariffs were in effect. The CAPE system is being implemented through a “phased development” with system functions being implemented over time. Businesses who paid duties pursuant to the IEEPA tariffs should visit CBP’s website to learn more about potential IEEPA refunds under the CAPE system.
Shortly after the Court vacated the IEEPA tariffs, President Trump announced that he would be implementing a global 10% tariff rate. This time, President Trump claimed the tariffs were authorized by Section 122 of the Trade Act of 1974. As was the case with IEEPA, no President had ever relied on Section 122 to implement tariffs. Unlike IEEPA, Section 122 does explicitly grant the President the authority to impose tariffs. However, the Section 122 tariffs would still go on to face legal challenges. Currently, the Section 122 tariffs are still in effect at an increased rate of 15%, but this is subject to change depending on the outcome of ongoing litigation. Regardless, these tariffs are indicative of the Administration’s ongoing intent to continue placing emphasis on tariffs in its international trade strategy.
Conclusion
The IEEPA tariffs dominated international trade headlines while still in effect. Reportedly, nearly $140 billion in duties were collected from the IEEPA tariffs by December of 2025. Naturally, this means that many businesses felt their effects. While the IEEPA tariffs may now be vacated, refunds and tariffs enacted under other statutes remain an important issue for many business owners. To learn more about the Supreme Court’s decision to vacate the IEEPA tariffs, click here. To learn more about the aftermath of the Court’s decision, click here.
