Supreme Court Strikes Down IEEPA Tariffs: $122 Billion in Refunds and the Section 301 and 232 Tariffs That Replaced Them

On 20 February 2026 the Supreme Court ruled 6 to 3 that the International Emergency Economic Powers Act doesn’t give the President the power to impose tariffs. Chief Justice John Roberts wrote for the majority in Learning Resources v. Trump, decided together with V.O.S. Selections. Justices Kavanaugh, Thomas and Alito dissented.

The ruling knocked out the legal basis for most of the tariffs imposed since early 2025. Customs and Border Protection stopped collecting them on 24 February. By then it had taken in about $166 billion from more than 330,000 importers.

Eight months on, two things have happened. Most of that money is going back. And most of the tariffs have come back too, under different laws.

The refunds

On 4 March 2026 Judge Richard Eaton of the Court of International Trade ruled that every importer who paid IEEPA tariffs gets a refund with interest, whether or not it had sued. That turned a legal victory for a few plaintiffs into a payout for everyone.

CBP built a refund system called CAPE, which opened on 20 April. By 31 July it had paid out $100 billion. By mid-September about $122 billion, including interest, had been certified and sent to Treasury for payment, out of about $134.7 billion in accepted claims. About $1.3 billion across 20,184 refunds was stuck because importers hadn’t supplied bank details. A third phase, for entries that had already been finally settled, opened on 6 October.

The replacements

The administration moved fast to rebuild its tariffs on other legal footing. Each law it used has its own limits.

Section 122 of the Trade Act of 1974 allows a tariff of up to 15% for up to 150 days to deal with balance-of-payments problems. A 10% global surcharge took effect under it on 24 February, the same day IEEPA collection stopped. The Court of International Trade ruled it unlawful in May, the Federal Circuit stayed that ruling in June, and the tariff expired on its own on 24 July when the 150 days ran out.

Section 301 became the main tool. In March 2026 the US Trade Representative opened two investigations, one on excess capacity in 16 economies and one on forced labour covering 60 economies and about 99.4% of US imports. The forced-labour tariffs took effect on 24 July, the day Section 122 expired: 10% for Canada, Mexico, India, the UK and others, capped at 10% for the EU and Taiwan, 12.5% for Japan, South Korea and Switzerland, and 12.5% for everyone else, including China, Brazil and Vietnam. Goods covered by the USMCA trade agreement are exempt. A separate 25% Section 301 tariff on Brazil took effect on 22 July.

Section 232, the national security law, covers sectors. Steel and aluminium tariffs under it were never affected by the ruling. In January 2026 a 25% tariff went on certain advanced chips, with exemptions for US data centres and research. In April a proclamation set tariffs on patented drugs, at 15% for the EU, Japan, Korea and Switzerland and 10% for the UK, effective 29 September.

Then there’s Section 338 of the Tariff Act of 1930, a law almost never used. In July it was invoked to impose 50% tariffs on about $20 billion of Canadian goods from 19 August.

Why the law matters more than the rate

The rates under the new tariffs aren’t far from the old ones. The legal mechanics are very different, and that changes how trading partners deal with Washington.

IEEPA tariffs could be imposed overnight, at any rate, on any country, by declaring an emergency. Section 301 needs an investigation and findings. Section 232 needs a national security finding for a specific sector. Section 122 runs out after 150 days. Each step creates a record that can be challenged in court and a timetable that partners can plan around.

That’s the cross-border lesson. In most trading democracies, tariff power sits with the legislature or is tightly delegated. The EU’s common external tariff, for example, is set at EU level, not by any one leader. The Supreme Court has now pulled US practice somewhat closer to that model. The President still has wide tariff powers. He just has to use the slower ones.

For importers the practical message is mixed. The refund cheques are real. The tariffs that replaced them are on firmer legal ground and are likely to last longer.