Significant Development in U.S. Trade Policy
Before Supreme Cout Ruling
Update on SCOTUS Decision Regarding IEEPA Tariffs and Recommended Actions for Importers
The legality of the reciprocal and fentanylrelated tariffs imposed under the International Emergency Economic Powers Act (IEEPA) has been under review by the Supreme Court of the United States (SCOTUS). Many importers have asked how best to protect their right to a potential refund should the Court invalidate these tariffs.
Are Protests Necessary?
Some practitioners have suggested filing protests against the liquidation of entries that include IEEPA tariff payments. However, in a recent decision, the U.S. Court of International Trade (CIT) held that the assessment of IEEPA tariffs is not a protestable decision. The U.S. Department of Justice agreed with this interpretation and will not appeal this portion of the ruling.
The CIT also noted that final liquidation would not necessarily bar importers from recovering duties. While the Justice Department has not formally concurred with this view, we are not currently recommending the filing of protests.
Recommended Approach: Protective Filing in the CIT
Because the timing and outcome of the Supreme Court ruling cannot be predicted, our office is advising importers to file a summons and complaint in the CIT to safeguard their refund rights—ideally before liquidation of their entries. This approach provides a clear record that the importer took timely action to protect its interests.
Although it is possible that SCOTUS could ultimately direct CBP to refund IEEPA duties without requiring importer action, refund procedures remain uncertain. Out of an abundance of caution, we recommend securing protections now rather than risk the government later asserting:
“Refunds would have been issued had you filed in the CIT.”
Supreme Court Ruling
Summary of the Supreme Court Decision
On Friday, SCOTUS ruled that the Executive Branch exceeded its statutory authority when imposing tariffs under IEEPA, a statute intended for national emergency powers. The Court, in a 6–3 decision authored by Chief Justice John Roberts, held that the administration did not identify a clear congressional authorization to impose such tariffs. As a result, the IEEPA-based tariffs were invalidated.
What Tariffs Are Affected?
The ruling does not impact all presidential tariffs. Tariffs imposed under the following authorities remain in place:
- Section 232 of the Trade Expansion Act
- Sections 122, 201, and 301 of the Trade Act of 1974
- Section 308 of the Tariff Act of 1930
Tariffs specifically reversed by the decision include:
- “Reciprocal” country-by-country tariffs (10% baseline; up to 34% for China)
- 25% fentanylrelated tariffs on goods from Canada, China, and Mexico
As anticipated, the Administration has already begun seeking alternative legal authority for certain tariff measures. On the same day, citing the Trade Act of 1974, the President announced plans to increase global tariffs from 10% to 15%. A separate Executive Order exempted certain Canadian and Mexican goods and excluded various agricultural products.
What Importers Should Do Now
Given the rapidly evolving landscape, the potential for administrative error, and the significant financial exposure associated with IEEPA duties, importers should:
- Reassess current import operations, structures, and compliance processes
- Monitor tariff classifications and entry reporting closely
- Consider filing protective legal actions to preserve refund rights
- Stay alert to forthcoming CBP guidance and administrative adjustments
We are continuing to monitor all developments and will keep clients updated as new information becomes available.
