At a Glance
- IEEPA Is Not a Tariff Statute: On February 20, 2026, the U.S. Supreme Court held that IEEPA does not authorize the President to impose tariffs, affirmed the Federal Circuit’s judgment in V.O.S. Selections, and held that challenges to these tariff measures fall within the Court of International Trade’s exclusive jurisdiction under 28 U.S.C. § 1581(i).
- Temporary Section 122 Surcharge Now Applies: On February 20, 2026, President Trump issued a proclamation imposing a temporary 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974, effective for goods entered on or after February 24, 2026. Section 122 permits a surcharge of up to 15% for up to 150 days, but the currently operative rate is 10%. The surcharge remains in effect and is scheduled to remain operative through 12:01 a.m. EDT on July 24, 2026, unless earlier suspended, modified, or terminated, or extended by Congress.
- Refund Administration Is Advancing, but Immediate Compliance Remains Suspended: On March 2, 2026, the Federal Circuit ordered the mandates in O.S. Selections to issue forthwith. The CIT has continued to supervise refund administration, but immediate compliance with its refund directives continues to remain suspended pending CBP’s deployment of automated refund functionality in ACE/CAPE.
What the Court Decided
In Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026), the U.S. Supreme Court held that IEEPA does not authorize the President to impose tariffs. The Court affirmed the Federal Circuit’s judgment in V.O.S. Selections and held that challenges to these tariff measures fall within the CIT’s exclusive jurisdiction under 28 U.S.C. § 1581(i). The Court also vacated the District Court’s judgment in Learning Resources and remanded with instructions to dismiss for lack of jurisdiction.
The decision invalidated the challenged IEEPA tariffs, but it did not itself prescribe the mechanics of refund administration.
Tariff Authorities Still in Play
Even after the IEEPA decision, the Trump Administration retains multiple statutory tariff pathways, including:
Section 122 of the Trade Act of 1974
A presidential proclamation invoking Section 122 tariffs was immediately issued, effective February 24, 2026, to impose a 10% across-the-board duty for up to 150 days. The surcharge is scheduled to remain in effect through 12:01 a.m. EDT on July 24, 2026, unless earlier suspended, modified, or terminated, or extended by Congress. Although Section 122 authorizes a surcharge of up to 15% for up to 150 days, the current surcharge is 10%. Exemptions cover goods subject to Section 232 of the Trade Expansion Act of 1962, United States-Mexico-Canada Agreement-compliant imports, and qualifying duty-free textiles and apparel under the Dominican Republic–Central America Free Trade Agreement.
Section 232 of the Trade Expansion Act of 1962
Section 232 authorizes tariffs on national security grounds; existing duties on steel, aluminum, automobiles, copper, lumber, and related remain in force.
Section 301 of the Trade Act of 1974
Section 301 remains a viable statutory authority for medium-to-longer term tariff programs. Indeed, Section 301 remains available to address unfair trade practices; existing China-related duties continue, and the administration has announced accelerated investigations of major trading partners.
The Refund Landscape
The appropriate refund strategy depends on liquidation status. An entry “liquidates” when U.S. Customs and Border Protection (“CBP”) issues a final determination of duties owed.
Unliquidated Entries
A Post-Summary Correction (“PSC”) is often the most efficient administrative mechanism to correct an entry summary, the customs filing submitted with CBP, before liquidation. CBP guidance states PSCs generally must be filed within 300 days of entry and no later than fifteen days before scheduled liquidation (whichever is earlier).
Liquidated Entries
Once liquidated, importers should evaluate whether to file an administrative protest under 19 U.S.C. § 1514, pursue relief in the CIT under 28 U.S.C. § 1581(i), or both. Administrative protests must be filed within 180 days of liquidation.
In addition, the CIT has confirmed its authority in AGS Company Automotive Solutions v. United States to order reliquidation and refunds where duties were unlawfully collected. Notably, administrative and judicial paths are not mutually exclusive, and protective filings may be appropriate depending on exposure.
Who Gets the Refund from CBP, and Who May Be Entitled to It by Contract?
Refunds are generally issued to the importer of record, as per 19 CFR § 24.36. However, where tariff costs were passed downstream, or burden was apportioned contractually, related parties may assert a claim to a share of recovery—potentially giving rise to claims against the importer if refunds are not sought or if retained refunds are unjustly enriching.
On March 2, 2026, the U.S. Court of Appeals for the Federal Circuit granted immediate issuance of the mandates in V.O.S. Selections v. Trump, denied the government’s request for a stay, dissolved the prior stay, and ordered that the mandates issue forthwith. This was important because it removed the appellate barrier to implementation and allowed the CIT to begin supervising the refund process.
On March 5, the CIT issued an amended order directing CBP to liquidate unliquidated entries without regard to the IEEPA duties and to reliquidate liquidated entries for which liquidation is not final.
On March 20, 2026, the CIT amended its prior order to encompass all duties imposed under the relevant IEEPA executive orders and noted unresolved issues concerning deemed liquidation, final liquidations, and importers who do not use CBP’s proposed CAPE functionality in ACE.
On March 27, 2026, the CIT further amended its order to direct that unliquidated entries be liquidated, and liquidated entries—whether or not final—be reliquidated, without regard to IEEPA duties, while clarifying that the order does not address separate de minimis issues. Immediate compliance with that order remains suspended while CBP completes its automated refund process. CBP has not publicly announced ACE/CAPE automation for these refunds; importers should continue to anticipate delay in disbursements pending CBP implementation.
Although the CIT has directed liquidation and reliquidation, CBP has indicated that implementation depends on completion of its automated refund functionality within ACE/CAPE. As a result, importers should expect delays in actually receiving refunds, even where entitlement is clear.
De Minimis: Still a Live Issue
The legal validity of the de minimis suspension remains unsettled in court and executive action has continued duty collection on qualifying shipments. The One Big Beautiful Bill Act will still eliminate de minimis treatment effective July 1, 2027, however litigation is also pending on this issue.
What Businesses Should Do Now
Every importer should preserve documentation tied to IEEPA-affected entries, including CBP Form 7501 and commercial invoices. Importers should also review contracts negotiated under the IEEPA tariff regime, as certain provisions may operate differently under replacement tariffs.
All businesses should remodel cost assumptions to reflect the current Section 122 rate. Sections 232 and 301 remain the most likely bases for durable replacement tariffs, so every party benefits from monitoring related federal action.
Cost-Benefit Analysis
For smaller importers with modest refund exposure, litigation costs may still outweigh recovery in the near term. But the CIT is developing a more streamlined litigation path, and more than 2,000 businesses have already filed. Importantly, as more businesses file and the court resolves recurring issues, litigation becomes cheaper and more predictable. In any case, preservation of protest rights and monitoring of liquidation status are minimum safeguards as deadlines foreclose some immediate recovery options.
For midsize importers, businesses should similarly weigh total refund value against litigation cost. However, they should also consider downstream pass-through of tariff expense, sensitivity in government-facing relationships, contract exposure, and other tangible impacts.
For larger importers, inaction may have significant financial consequences. Large potential refunds may raise fiduciary concerns, particularly where portfolios are complex and engage multiple stakeholders.
The Bottom Line: The IEEPA tariffs have been invalidated, but the trade environment remains volatile. These issues require time-sensitive decisions that should be conducted with informed counsel before available options narrow.
About O’Toole Scrivo, LLC
We are a carefully crafted mid-sized law firm of recognized subject matter experts practicing primarily in New York and New Jersey. We combine large-firm expertise with small-firm attention to client needs, representing businesses, insurance companies, and government entities. We are committed to delivering creative and timely results for the most high-profile and complex matters.
