Supreme Court Rejects Presidential Tariff Authority Under IEEPA: Key Takeaways for Importers and U.S. Businesses

The U.S. Supreme Court has issued a landmark decision in Learning Resources, Inc., et al. v. Trump, President of the United States, et al., holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs - even during a declared national emergency. The ruling significantly reshapes the legal landscape surrounding executive authority in trade matters, particularly emergency-based tariff actions initiated without congressional approval.

For companies that import goods into the United States, this decision brings important clarification - and potentially financial implications - following several years of rapidly shifting tariff policy.

Background: The Tariffs at Issue

Shortly after taking office, President Trump declared national emergencies related to (1) drug trafficking and (2) "large and persistent" trade deficits. Relying exclusively on IEEPA, he imposed sweeping tariffs:

• 25% tariffs on most Canadian and Mexican imports
• 10% tariffs on most Chinese imports (later escalated significantly)
• A minimum 10% tariff on all imports from all trading partners, with higher rates for dozens of countries

Tariffs on Chinese goods eventually reached an effective rate of approximately 145% after multiple executive order modifications. Multiple businesses and states challenged these actions, arguing - as we previously reported - that IEEPA historically authorizes blocking, freezing, or restricting foreign property interests, not imposing taxes or customs duties.

The Supreme Court's Holding

The Court ruled decisively that IEEPA does not authorize the President to impose tariffs.

The majority emphasized that Article I of the Constitution gives Congress alone the power to levy tariffs and taxes. Relying on the major questions doctrine, the Court found that the IEEPA lacks the clear congressional authorization to be expected in delegating its "most complete and effectual weapon" - the power of the purse. Indeed, the Court noted that Congress has always used explicit terms like "duty," "tariff," or "surcharge" when delegating tariff authority.

In contrast, the IEEPA allows the President to "regulate…importation," but nowhere mentions tariffs, duties, or revenue-raising measures. The Court found it to be telling that for 50 years, no President had ever invoked IEEPA to impose tariffs, though it has regularly been invoked for other purposes.

Consequences for Importers and Ongoing Tariff Obligations

IEEPA-Based Tariffs Must End

Any existing tariffs imposed solely under IEEPA lack statutory authorization after this decision. Note, however, that other tariff statutes remain available. The Court was careful to note that it expressed no view on tariff actions under other authorities, such as:

• Section 232 (national security)
• Section 301 (unfair trade practices)
• Section 201 (safeguards)

The Court's decision reinforces that tariff authority must be grounded in one of these trade-specific statutes, not in generalized emergency powers.

Importers May Seek Refunds

Because the decision holds the IEEPA tariffs unlawful ab initio, importers may be entitled to recover duties paid under the now-invalid tariff regime. However, lower courts will need to resolve refund procedures, and litigation is likely.

Emergency Economic Powers Remain Broad - But Not Unlimited

The decision does not narrow the President's ability to freeze assets, block transactions, or impose sanctions under IEEPA. It only removes tariffs, which the Court deemed fundamentally different because they raise revenue and occupy Congress's core constitutional domain.

What Businesses Should Do Now

1. Review Entries and Identify Potential Refund Exposure. If your company paid IEEPA-based tariffs, it may be entitled to reimbursement depending on the final remedy structure.
2. Evaluate Supply Chain Planning Assumptions. Tariff risk now more clearly depends on the statutory tool invoked, not on the President's emergency declarations. Additionally, with the removal of these tariffs, we may see shifts on tariffs being levied by other countries against U.S. goods.
3. Monitor Legislative Responses. Congress may consider new delegations of tariff authority - though the decision signals that any such delegation must be explicit and carefully bounded. Moreover, the President may consider alternative avenues for tariff authority.

Conclusion

The Supreme Court's decision in Learning Resources v. Trump is a major recalibration of executive trade authority, confirming that the IEEPA was never intended to serve as a catch-all basis for emergency tariffs. Congress retains control over tariff policy, and the President must operate within statutory lanes.

For importers and multinational businesses, this ruling opens the door to potential refunds and offers greater predictability going forward.

Calfee, Halter & Griswold LLP is a full-service corporate law firm with 160 attorneys and professionals and offices in Cleveland, Columbus, Cincinnati, and Indianapolis. As a founding member of Lex Mundi, Calfee also offers international representation through a network of independent law firms with 22,000 attorneys in more than 125 countries.

Since 1903, Calfee's mission has been to provide meaningful legal and business counsel on matters critical to our clients' success. Calfee lawyers routinely represent a wide spectrum of private and public organizations - from emerging companies to Fortune 500 corporations - as well as government entities, nonprofit organizations, trade associations, and individuals.

Calfee is consistently ranked as one of the top law firms in Ohio and continues to receive recognition, both nationally and regionally, from a number of leading industry publications.