Webinar
Navigating the IEEPA tariff ruling: What importers should do now
Feb. 25, 2026 · Authored by Matt Damone, Tosca Derrick, Pete Mento
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Webinar
Feb. 25, 2026 · Authored by Matt Damone, Tosca Derrick, Pete Mento
After months of uncertainty, U.S. importers now have long-awaited clarity regarding IEEPA-based tariffs. A major recent Supreme Court decision determined that the administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad revenue-raising tariffs exceeded presidential authority. This tariff ruling marks a turning point for importers who have collectively paid hundreds of billions of dollars in duties under these measures. With the Supreme Court tariff ruling now final, companies face an urgent need to prepare for refund opportunities, along with new compliance and operational considerations.
However, the decision does not automatically trigger refunds or establish a recovery process. Instead, implementation responsibility now shifts to the Court of International Trade (CIT) and U.S. Customs and Border Protection (CBP), meaning importers must proactively prepare to preserve refund eligibility and comply with forthcoming procedural requirements.
The heart of the Supreme Court 6-3 decision lies in congressional authority. According to the majority, tariff power fundamentally resides with Congress, not the executive branch. While the president can impose tariffs under specific, explicitly delegated situations, IEEPA is not among those tools. The Court held that IEEPA is designed for emergency powers, not broad tax or revenue measures, and cannot be interpreted as granting a blank check for unilateral tariff creation. This tariff ruling reinforces that tariff authority must be clearly delegated by Congress and cannot be inferred from general emergency economic powers statutes.
In practical terms, the decision invalidates tariffs imposed under IEEPA authority and prevents their continued use as a legal basis for revenue-raising duties. However, the ruling does not eliminate tariffs imposed under other statutory authorities, including Sections 122, 232, 301 or 338, which remain available to policymakers and may continue to shape tariff exposure moving forward.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.
The dissenting justices presented a compelling counterpoint, arguing that the executive branch needs flexibility to act quickly in economic emergencies. They warned that constraining IEEPA could hinder future administrations facing unforeseen threats. Ultimately, the majority disagreed, establishing a clearer boundary for emergency economic authority moving forward.
The invalidation of the tariffs does not automatically trigger refunds. Instead, the next phase shifts to the CIT and CBP, which must establish and administer the refund process. This uncertainty has led to speculation across the trade sector, but there are very few concrete answers.
Historically, when duties are invalidated, refunds are processed through existing customs administrative procedures or court-directed mechanisms rather than automatic repayment. Importers must identify affected entries, validate eligibility and submit claims in accordance with federal procedures.
A likely path is beginning to take shape based on recent CIT rulings:
A critical factor in determining refund eligibility is whether an entry is liquidated or unliquidated. Liquidation is CBP’s final determination of duties owed and triggers strict timelines for correction or protest.
Entries generally fall into three categories:
The coming months will place heavy demands on importers’ recordkeeping and internal controls. CBP is expected to conduct line-by-line audits of refund submissions. Any inaccuracies, whether in tariff applicability, classification, valuation or documentation, could lead to rejections or prolonged review cycles.
Refund claims should be approached as both a financial recovery initiative and a compliance exercise. CBP may review classifications, valuation methods and entry documentation to confirm accuracy before issuing refunds.
The organizations best positioned for refund recovery and future tariff challenges will be those who begin preparing immediately. Companies should:
Companies should prioritize entries nearing liquidation or protest deadlines, as procedural timing may affect refund eligibility.
To prepare, companies will need a comprehensive, accurate data set reflecting:
For many businesses, the refunds represent a significant financial windfall, but one that carries notable tax implications.
Refunded tariffs increase taxable income unless tracked and applied carefully. Companies with related-party imports face additional complications: transfer pricing adjustments, valuation reconciliation and financial restatements may all be required. Some will need to amend prior-year tax returns, adjust cost of goods sold, or reallocate income across jurisdictions.
Additionally, because many states apply sales and use tax to duties, there may be state-level refund opportunities.
In short, the refund process requires collaboration between trade compliance, finance, tax and legal teams.
Organizations should also evaluate financial reporting implications, including adjustments to inventory valuation, profitability metrics, deferred taxes and financial disclosures. Refunds may materially affect cost structures and financial statements.
Even as IEEPA tariffs disappear, importers should brace for new measures. The administration is expected to invoke Section 122 authority, established under the Trade Act of 1974, following the end of the U.S. gold standard and related economic instability. Section 122 allows temporary tariffs of up to 15% for 150 days, after which Congress must approve further action.
However, current economic conditions do not clearly meet the statutory threshold for Section 122. Many experts believe these tariffs will be challenged, and likely overturned, just as IEEPA duties were. Section 338 tariffs could also appear, though these require a specific determination that another country discriminates against U.S. commerce, making implementation more difficult.
Still, importers should assume that additional duties may be imposed imminently and work with customs brokers to prepare for new Chapter 99 tariff numbers, potential stacking with existing 232 and 301 duties, and heightened compliance obligations.
Importers should view the current ruling as part of an evolving tariff environment, not a permanent reduction in tariff exposure. Maintaining accurate records now will support both refund recovery and future regulatory requirements.
The end of IEEPA tariffs represents one of the most consequential trade developments in recent years. For importers, it brings relief, opportunity and significant operational challenges. While billions of dollars in potential refunds are now within reach, the path ahead is complex, documentation-heavy and time-sensitive.
Those who treat this as a strategic financial and compliance initiative, and not just a simple administrative task, will be well positioned to recover funds efficiently, withstand CBP scrutiny and prepare for the next chapter in an evolving U.S. tariff environment.
Early preparation, strong documentation and coordinated cross-functional execution will be critical to maximizing recovery and minimizing risk.
The IEEPA tariff ruling creates a significant financial and operational inflection point for organizations engaged in global trade. Recovering duties is not simply an administrative exercise; it requires a coordinated strategy that aligns customs data, tax treatment, financial reporting and broader business planning. Baker Tilly helps organizations evaluate the full impact and position themselves to act as refund procedures are implemented.
Through our tariff refund and recovery services, we help organizations identify affected imports, quantify potential recovery value and develop a strategy to preserve eligibility and accelerate recovery timelines. As part of our broader global trade management offering, we help businesses strengthen trade compliance, improve duty planning and navigate ongoing tariff and regulatory change.
Our integrated team of global trade, tax and advisory leaders brings cross-functional insight to help organizations make informed decisions, reduce risk and capture opportunities created by this ruling.
Complete our IEEPA tariff refund qualification questionnaire to evaluate your potential refund opportunity and determine next steps.
Organizations that delay preparation risk missing procedural deadlines, increasing audit exposure and significantly extending refund timelines.
Many importers lack complete access to their Automated Commercial Environment (ACE) robust reporting capabilities, and some have reconciliations, drawbacks or foreign trade zone transactions that add complexity. Every discrepancy increases audit risk and extends timelines.
Companies should prioritize obtaining ACE access immediately, as ACE provides CBP’s official record of entry history, liquidation status and duty payments. Broker reports alone may not provide complete visibility or sufficient audit support.
