In the nine months since President Donald Trump unveiled sweeping tariffs on all U.S. trading partners, U.S. courts have grappled with a series of lawsuits challenging tariffs imposed under authority of the International Emergency Economic Powers Act (“IEEPA”). Today, the Supreme Court determined those tariffs were illegal.

The Supreme Court’s decision resolves most of the issues raised in challenges by importers, but did not address issues relating to refunds or any process for obtaining them. 

Background

In April 2025, shortly after President Trump announced a new global tariff regime, five affected importers and 12 state attorneys general filed two separate lawsuits against the Trump Administration, challenging the President’s authority to impose broad and sweeping tariffs (in particular, what are known as the “reciprocal” and “trafficking” or “fentanyl” tariffs) under authority of IEEPA.

On May 28, a three-judge panel of the Court of International Trade (“CIT”), in a consolidated opinion, found that the “reciprocal” and “trafficking” tariffs exceeded the President’s statutory authority under IEEPA and permanently enjoined their operation on all imports. The Trump Administration quickly appealed the matter.

Following an appellate decision by the U.S. Court of Appeals for the Federal Circuit (“CAFC”), upholding the CIT’s decision, but remanding the lower court’s universal injunction, the Supreme Court granted the Trump Administration’s petition for certiorari and held oral argument on November 3, 2025. Over the course of almost three hours, the Court explored the legality of IEEPA-based tariffs and the uncertainty as to whether and how already-collected duties would be refunded, if the IEEPA tariffs were held unlawful. 

Developments and Reasoning

Today, in a 6-3 ruling, the Supreme Court overturned Presidential tariffs imposed pursuant to IEEPA, affirming the decisions of the lower courts. The majority reasoned that IEEPA’s authority to “regulate … importation” lacks any express reference to “tariffs,” “duties,” or other revenue‑raising measures, and that “regulate,” read in context with IEEPA’s other verbs, concerns blocking or controlling transactions, not taxation. The Court explained:

We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.

Applying the major questions doctrine, three justices further explained that transferring Congress’s core fiscal power via ambiguous statutory text is impermissible, emphasizing that no prior President has used IEEPA to levy tariffs and that Congress historically delegates tariff authority explicitly and with strict limits.

Refund Process and Considerations

As a result of today’s decision, importers are preparing for the possibility of up to $175 billion in tariff refunds. Notably, however, the Court’s majority decision did not address whether importers are entitled to refunds of duties previously collected under the now-invalidated tariff regimes.

How any refund process will work now goes back to the lower courts and the government. See our previous alert regarding tariff refunds.

Key Takeaways

• Tariffs collected under the authority of IEEPA have been ruled unlawful by the Supreme Court, but questions remain as to the immediate effects of that decision. 
• Importers that paid tariffs imposed under IEEPA will have opportunities to pursue refunds. The process for doing so will also need to be clarified by the courts and the government in the days ahead.
• The Trump Administration will re-impose at least some amount of tariffs under different authorities. Hours after the decision, President Trump announced that the United States will immediately impose a 10 percent global tariff under a different law, Section 122, and will launch a large number of new Section 301 investigations that would result in more tariffs. 
• It remains unclear how today’s decision will impact recently negotiated trade deals.