Supreme Court Rules IEEPA Tariffs Unlawful, Opening Door to Importer Refunds

A 6-3 Supreme Court decision established that every tariff the Trump administration imposed under the International Emergency Economic Powers Act was unlawful from the moment it took effect, not merely going forward. The February 20, 2026 ruling in Learning Resources, Inc. v. Trump created an immediate question that federal courts, trade lawyers, and supply chains are now scrambling to answer: who actually gets the money back?

The short answer, for most American consumers, is nobody.

Under U.S. import law, refunds flow to the importer of record, the company that physically remitted duties to U.S. Customs and Border Protection. That means the businesses at the front of the supply chain stand to recover their payments, regardless of whether they passed those costs downstream. A retailer that charged customers an extra $248 for a coat because of tariff pass-through will not be required, under any current framework, to return that sum to the buyer. No multi-tiered refund mechanism is under consideration, and no direct recovery path exists for end consumers.

The gap between who receives refunds and who actually bore the costs is the central accountability problem the ruling created. An importer that documented its IEEPA exposure, passed the full cost to wholesalers or retailers, and then recovered that cost in higher sales prices stands to receive a cash windfall from CBP with no legal obligation to share it with anyone further down the chain.

CBP has proposed a self-service portal where importers would file a declaration listing their IEEPA-affected entries; the system would automatically recalculate duties and accrued interest. CBP estimated the portal would be operational in approximately 45 days from the announcement, placing readiness around mid-April 2026. Trade lawyers have flagged that CBP could alternatively require importers to file formal protests through its established administrative process, and that tariffs paid in early 2025 may be treated differently from those paid later in the year.

The litigation track is already crowded. Roughly 2,000 lawsuits have been filed at the U.S. Court of International Trade in Manhattan by companies seeking refunds, including multinationals such as FedEx and L'Oréal. The CIT has ordered nationwide tariff refunds, but the government is expected to challenge that order, arguing the court lacks authority to issue a refund directive that covers all importers rather than only the specific parties before it.

For businesses sitting between importers and consumers, some recovery options may exist depending on how carefully tariff costs were documented. If a supplier sent written notices, emails, or updated price lists that explicitly tied price increases to IEEPA tariffs, that paper trail could support a claim that downstream parties are entitled to share in any refunds. Companies that broke out tariff costs as separate line items on invoices face the strongest expectations from their own customers. Without that documentation, claims become significantly harder to pursue.

The Supreme Court ruling has also exposed retailers and importers to a new category of legal risk. Consumer class actions are now a live possibility for companies that received refunds from CBP on costs they already recovered from buyers. The question of whether keeping both the customer payment and the government refund constitutes unjust enrichment has not been resolved, but legal exposure in that direction is real and growing.

The ruling does not touch Section 232 tariffs, the levies on steel, aluminum, and related product categories imposed under a different statutory authority. Those remain fully in force.

The legal foundation of the IEEPA tariffs was laid out in the foundational CIT case V.O.S. Selections v. Trump, where the trade court first ruled against the president's tariff authority in May 2025. The Federal Circuit upheld that ruling en banc in August 2025, the Supreme Court granted certiorari in September, and oral argument was heard on November 5. The IEEPA tariffs had already been rescinded as of February 7, 2026, two weeks before the Court acted, but the ruling's determination that they were invalid from inception is what opened the door to retroactive refund claims.

President Trump issued an executive order after the ruling stating the tariffs "shall no longer be in effect." The order said nothing about refunds. That silence is now the subject of an increasingly complicated legal and bureaucratic process that will take months, and possibly years, to fully resolve.