Supreme Court IEEPA ruling: President can’t impose tariffs under IEEPA

The U.S. Supreme Court ruled on February 20, 2026, that the executive branch exceeded its authority by using the International Emergency Economic Powers Act (IEEPA) to impose sweeping, broad-based tariffs.

While this decision will remove IEEPA tariffs being charged on U.S. imports, tariffs will continue to be paid, and the announcement of Section 122 tariffs means most effective tariff rates will stay similar. Overall, tariff uncertainty isn’t over, and many will continue paying the same amount in tariffs.

Here’s an overview of the IEEPA ruling and how it may impact your business:

What was the Supreme Court ruling on IEEPA?

The Supreme Court invalidated the “Trafficking Tariffs” and “Reciprocal Tariffs” that had been in place since early 2025 with a 6-3 ruling. Chief Justice John Roberts, writing for the majority, emphasized a core constitutional principle: The power to tax, including the imposition of tariffs, resides with Congress, not the President.

The Court’s reasoning centered on:

• Statutory language: The Court found that IEEPA’s authority to “regulate” or “prohibit” imports during a national emergency does not implicitly include the power to levy taxes or duties.
• Major questions doctrine: The Justices argued that a policy impacting trillions of dollars in trade is a “major question” that requires explicit, clear authorization from Congress, which IEEPA lacks.
• Separation of powers: The ruling serves as a constitutional guardrail, preventing the executive branch from unilaterally rewriting the U.S. Harmonized Tariff Schedule under the umbrella of a national emergency.

How does the Supreme Court tariff ruling affect businesses?

For businesses, the IEEPA ruling means that:

• IEEPA tariffs will no longer be in effect. However, other tariffs, such as those imposed under Section 232, Section 301 and general tariff duties, are not impacted by this court ruling and remain in effect. Those tariffs have already been upheld by the appropriate court.
• Refund status is still unclear. The Supreme Court did not say anything in its ruling on the issue of refunds.
• Tariffs aren’t going away. The Trump administration has already developed a “Plan B” to pivot to existing trade laws to maintain some level of tariffs. In the short term, Section 122 allows a President to impose a 15% tariff immediately on any country for up to 150 days. The administration has also prepared tariff petitions under Section 301 on individual countries and Section 232, targeting specific goods.
• You may start seeing lower tariffs, but the administration will pivot: While refunds are not decided and could take months or years to materialize, importers of record may begin to see goods imported without IEEPA tariffs. In some instances, this could be lower overall tariff rates. A Section 122 announcement could mitigate any lower tariffs, and it’s important to remember that all other tariffs under Section 232, Section 301 and general rates remain in effect.

Can businesses get refunds for IEEPA tariffs?

Currently, there is no ruling on whether businesses will be given refunds for IEEPA tariffs.

In Justice Kavanaugh’s dissenting opinion, he did note that “Refunds of billions of dollars would have significant consequences for the U.S. treasury. The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess’ as we acknowledged at oral arguments.”

Will new tariffs replace IEEPA tariffs?

While IEEPA tariffs have been invalidated, the administration is expected to pivot to other tariff vehicles quickly.

The administration has indicated previously that they are looking at Section 122, with both President Trump and Kevin Hassett, the Director of Economic Council, stating they are considering a 10% tariff initially.

Your next steps

For businesses navigating the impact of this pivotal ruling, consider these next steps:

• Watch for IEEPA tariffs on imports: If you have goods that are being imported in the coming days or weeks, you should take note of any IEEPA tariffs charged. As soon as Customs and Border Protection has the details on removing the tariffs, IEEPA tariffs will no longer be charged on goods.
• Talk to your suppliers: All businesses should speak with their suppliers about imports in the supply chain, the HTS codes they are using to enter goods into the U.S. and which tariffs they are paying, meaning Section 301 tariffs, 232 tariffs or IEEPA tariffs. Make sure all suppliers are aware of the Supreme Court decision to help ensure that you don’t pay IEEPA tariffs going forward.
• Stay strategic: Customers may reach out to you asking for price adjustments down to this ruling. Make sure you know your data and the impact on your business of the new Section 122 tariff that is being imposed. Note which tariffs you are paying for each good and explain to your customers that although the IEEPA tariffs are no longer in effect, all others are, and your prices for imports have not declined.

How Wipfli can help

Navigate tariff and trade uncertainty with confidence. Wipfli’s specialists help you get ahead of policy shifts, assess risk and turn disruption into strategic advantage. Contact our tariff and trade team for more details on how Wipfli can advise you on tariff exposure and trade dynamics.

Read more:

• Protecting your manufacturing business amidst tariff changes
• 2026 manufacturing trends: adapting to tariffs and costs
• Navigating tariffs, inflation and high rates: How executives are making decisions without certainty