SCOTUS Tariff Ruling: What Small Businesses Need to Know and How to Prepare
The Supreme Court is reviewing whether IEEPA tariffs are constitutional. Learn what's at stake and how to protect your refund eligibility.
⚡ Updated: February 21, 2026 — The Supreme Court ruled. The IEEPA tariffs are struck down 6–3. Trump immediately responded with a 15% global tariff under Section 122 of the Trade Act of 1974. This guide has been updated with what actually happened and what you need to do now.
The U.S. Supreme Court is expected to rule as early as February 20, 2026, on whether the President's use of the International Emergency Economic Powers Act (IEEPA) to impose reciprocal tariffs is constitutional. If the Court strikes down the tariffs, over 301,000 importers who have collectively paid an estimated $129–150 billion in IEEPA duty deposits may be eligible for refunds — but only if they act before key deadlines pass.
In this guide, you'll learn:
- What the SCOTUS tariff case is about and which tariffs are at risk
- The full timeline from lower courts to Supreme Court
- Which tariffs are NOT affected by this case
- How the CBP protest and refund process works
- What steps to take right now to protect your refund eligibility
- What happens after the ruling, regardless of outcome
What Is the SCOTUS Tariff Case About?
The case — formally V.O.S. Selections, LLC v. Trump (No. 25-250), consolidated with Learning Resources, Inc. v. Trump (No. 24-1287) — challenges whether Congress authorized the President to impose tariffs under IEEPA (International Emergency Economic Powers Act, a 1977 law traditionally used for sanctions, not trade duties).
In early 2025, the administration declared trade deficits a national emergency and used IEEPA to impose "reciprocal tariffs" on imports from 57 countries. The core legal question: does IEEPA, which authorizes the President to "regulate" international commerce during emergencies, include the power to set tariffs? This is the first time any president has used IEEPA to impose tariffs [Supreme Court of the United States, Docket No. 25-250, 2025].
Two constitutional doctrines are central to the Court's analysis:
Act now: TariffCenter's free IEEPA Refund Estimator calculates your potential CBP refund based on total duties paid, IEEPA percentage, and liquidation status — in under a minute. Also use the Duty Calculator to model your new cost exposure under the replacement 15% Section 122 tariff.
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Major Questions Doctrine: Congress must speak clearly when delegating authority over issues of "vast economic and political significance." The tariffs affect over 34 million entry lines and an estimated $129–150 billion in duty deposits [Davis Wright Tremaine, January 2026].
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Non-Delegation Doctrine: Congress cannot hand off its core legislative powers — including the power to tax and set tariffs (Article I, Section 8) — to the executive branch without meaningful constraints.
Timeline: From Lower Courts to the Supreme Court
The case has moved through the courts at unusual speed:
| Date | Event |
|---|---|
| Apr 2025 | V.O.S. Selections (5 small businesses + Liberty Justice Center) files at CIT |
| May 28, 2025 | CIT unanimously rules IEEPA does not authorize tariffs; permanently enjoins enforcement |
| Aug 29, 2025 | Federal Circuit affirms CIT ruling en banc, 7–4 |
| Sep 3, 2025 | Administration petitions Supreme Court |
| Sep 2025 | Supreme Court grants certiorari on expedited schedule |
| Nov 5, 2025 | Oral arguments held |
| Dec 23, 2025 | CIT stays all IEEPA refund cases pending SCOTUS ruling |
| Feb 20+, 2026 | Ruling expected on any opinion day |
The case could be decided any time between late February and the end of the term in June/July 2026.
What Did the Justices Signal During Oral Arguments?
Court observers noted significant skepticism from justices across the ideological spectrum during the November 5 oral arguments. The amicus brief count was lopsided: 37 briefs supporting the challengers vs. only 6 supporting the government [SCOTUSblog, 2025].
- Justice Gorsuch warned that upholding the tariffs would create a "one-way ratchet" of Congressional power to the President, invoking the non-delegation doctrine
- Justice Barrett pressed the government on whether IEEPA's text actually authorizes setting duty rates
- Chief Justice Roberts suggested a violation of the major questions doctrine — that Congress must speak clearly when delegating authority over issues of vast economic significance
- Justice Kagan questioned whether Congress (not the president) holds taxing power under the Constitution
- Justices Thomas and Alito appeared more sympathetic to the government's position, noting IEEPA's broad statutory language
Most judicial observers predict a 6–3 or 7–2 ruling against the government, likely with Chief Justice Roberts writing the majority opinion.
Which Tariffs Are at Risk — and Which Are NOT?
This is critical for importers to understand. Only IEEPA-based tariffs are challenged in this case. Other tariff programs use entirely different legal authorities and are not affected:
| Tariff Program | Legal Authority | At Risk? | Typical Rates |
|---|---|---|---|
| Reciprocal tariffs (57 countries) | IEEPA | Yes | 10–50% |
| Fentanyl tariffs (China, Canada, Mexico) | IEEPA | Yes | 10–25% |
| Section 301 (China) | Trade Act of 1974 | No | 7.5–25% |
| Section 232 (steel/aluminum) | Trade Expansion Act of 1962 | No | 25% steel, 10% aluminum |
| MFN base duties | Tariff Act of 1930 | No | Varies by product |
| Antidumping/CVD duties | Title VII | No | Varies |
Important: Even if SCOTUS strikes down IEEPA tariffs, Section 301 tariffs on China remain in full effect. For most importers of Chinese goods, the reciprocal tariff is only one layer of a multi-layered duty stack.
How Much Could Importers Get Back in Refunds?
If the Court invalidates IEEPA tariffs, the refund amount depends on how much you paid specifically in reciprocal tariffs — not your total duties. Over 2,000 refund complaints have already been filed at the Court of International Trade, including by major companies like Costco.
Example calculation:
A small business imported $500,000 in furniture from Vietnam over the past 12 months:
| Duty Layer | Rate | Amount |
|---|---|---|
| MFN base rate | 0% | $0 |
| IEEPA reciprocal tariff | 46% | $230,000 |
| Potential refund | $230,000 |
Compare that to a business importing electronics from China:
| Duty Layer | Rate | Amount |
|---|---|---|
| MFN base rate | 3.4% | $17,000 |
| Section 301 tariff | 25% | $125,000 |
| IEEPA reciprocal tariff | 34% | $170,000 |
| Potential refund (IEEPA only) | $170,000 |
The Section 301 portion ($125,000) would NOT be refunded regardless of the SCOTUS ruling.
Use our SCOTUS Refund Eligibility Checker for a personalized estimate based on your import history.
How the CBP Protest and Refund Process Works
If the Court rules in importers' favor, you'll need to have either unliquidated entries or timely filed protests to claim a refund. Trade law firms are calling this a "file or die" situation — miss the deadlines and you permanently lose your refund rights.
Step 1: Understand Liquidation
Liquidation is when CBP finalizes the duty amount on an import entry. After liquidation, the duty assessment becomes final unless you file a protest. CBP must liquidate entries within 314 days of the date of entry [19 USC § 1504].
Step 2: File a Protest (If Entries Are Liquidated)
If your entries have already been liquidated with IEEPA tariffs assessed, you must file a protest within 180 days of liquidation [19 USC § 1514]. Protests are filed using CBP Form 19 through the Automated Commercial Environment (ACE).
Step 3: Consider Direct CIT Filing
Importers also have the option of filing directly with the Court of International Trade under Section 1581(i) — available within two years of entry for challenges to tariff legality. Many trade attorneys recommend a "belt-and-suspenders" approach: file both administrative protests and CIT complaints to maximize protection.
Step 4: Wait for the Ruling
If SCOTUS strikes down the tariffs, CBP will need to issue guidance on how refunds will be processed. The CIT has confirmed it has authority to order reliquidation with refunds (plus interest), and CBP has stated it will not contest this authority.
What If My Entries Haven't Liquidated Yet?
Unliquidated entries are in the strongest position. If the tariffs are struck down before liquidation, CBP should liquidate without the IEEPA duties. No protest would be needed.
What Should You Do Right Now?
Regardless of how SCOTUS rules, these steps protect your business:
1. Audit Your Import Entries
Review every import entry since the reciprocal tariffs took effect. Identify which entries included IEEPA tariff payments and the exact amounts.
2. Track Liquidation Dates
For each entry, calculate the 314-day liquidation window. Create a calendar of deadlines so you don't miss the protest window.
3. Calculate Your IEEPA Exposure
Separate the IEEPA/reciprocal tariff portion from other duties (MFN, Section 301, Section 232). Only the IEEPA portion is potentially refundable.
4. Consult a Customs Broker or Trade Attorney
For significant amounts (over $10,000 in potential refunds), consult a licensed customs broker or trade attorney about filing protective protests — protests filed in advance of a favorable ruling to preserve your rights.
5. Consider Filing Protective Protests Now
Many customs attorneys are advising clients to file protective protests on liquidated entries now, before the ruling. The cost of filing a protest is minimal compared to the potential refund. Some firms are also filing direct CIT complaints as additional protection.
What Happens After the Ruling?
What Actually Happened: The Court Struck Down IEEPA Tariffs
On February 20, 2026, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs. Chief Justice Roberts wrote for the majority that IEEPA’s language “cannot bear such weight.” The ruling invalidates all IEEPA-based tariffs — Liberation Day and fentanyl duties alike.
Within hours, Trump responded: He announced a new 10% global tariff under Section 122 of the Trade Act of 1974, then raised it to 15% on February 21, the statutory maximum. Section 122 tariffs are temporary — they expire in 150 days unless Congress extends them.
What this means for refund claimants:
- Importers with unliquidated entries or timely filed protests can now pursue refunds on IEEPA duties paid
- Over 2,000 CIT refund complaints already filed will proceed; a flood of new filings is expected
- Experts warn the refund process could take years, possibly a decade — individual protests are required and smaller importers may struggle with legal costs
- Congress may need to act to authorize the full $175B+ in potential refunds
- CBP has stated it will not contest CIT authority to order reliquidation with refunds plus interest
The new 15% Section 122 tariff applies going forward — it does NOT affect your refund claims for IEEPA duties already paid. Those are two separate legal tracks.
If the Court Had Upheld IEEPA Tariffs (Did Not Happen)
For reference only — the Court struck down IEEPA tariffs.
- All current reciprocal tariffs remain in effect
- The administration gains confirmed authority to set tariffs via IEEPA
- Future administrations would also have this expanded power
- Importers should focus on tariff mitigation strategies (supplier diversification, FTZs, tariff engineering)
If the Ruling Is Narrow or Mixed
The Court could issue a narrow ruling — for example, the Federal Circuit's 7-judge majority only held that IEEPA doesn't authorize tariffs "of the magnitude" at issue, while the 4-judge concurrence argued IEEPA doesn't authorize tariffs under any circumstances. SCOTUS could adopt either position, creating very different implications for future executive action.
Key Deadlines to Watch
| Deadline | Why It Matters |
|---|---|
| Feb 20, 2026+ | Earliest expected ruling date |
| 314 days from entry | CBP liquidation deadline for each entry |
| 180 days from liquidation | Protest filing deadline for each liquidated entry |
| 2 years from entry | CIT Section 1581(i) filing deadline |
| Jun/Jul 2026 | End of SCOTUS term (latest ruling date) |
Bottom Line
This is the most significant trade law case in decades. The outcome will affect over 301,000 importers and potentially $129–150 billion in duties. Whether or not you expect a favorable ruling, the prudent step is to document your IEEPA tariff payments, track your liquidation dates, and consult with a customs professional about protective protests.
Check your refund eligibility with our free SCOTUS tariff calculator, or sign up for TariffCenter.AI to track your entries and liquidation deadlines automatically.
Disclaimer: Tariff rates and trade policies change frequently. This article reflects information as of February 2026. TariffCenter.AI is an informational research tool — not a law firm or licensed customs broker. Always consult qualified professionals for legal or customs advice specific to your situation.