Supreme Court Invalidates IEEPA Tariffs, But Uncertain Legal Landscape Remains

On February 20, 2026, the Supreme Court handed down its long-awaited opinion in Learning Resources Inc. v. Trump, in which the Court held that President Trump does not have authority to use the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs (see our prior alerts on the announcement of these tariffs and on subsequent modifications to the tariff schedule).

While the Court’s members produced several opinions touching on the appropriate application of the Court’s Major Questions and Nondelegation doctrines that may have broader implications for administrative and constitutional law, the central holding that commanded a majority of the Court’s members was that tariffs are taxes; the power to tax is exclusively vested in Congress under Article I of the Constitution; and through IEEPA, Congress did not grant the President the authority to impose tariffs. That result (in an opinion by the Chief Justice) was joined by five other members of the court, with three justices dissenting.

Following the ruling, President Trump issued an order ending tariff duties that had been imposed under IEEPA, while concurrently imposing new 10% tariffs for a 150-day period, with exceptions, under separate existing authority.

Background

President Trump relied on IEEPA to impose both the “fentanyl” tariffs on Canada, China, and Mexico, as well as the “reciprocal” tariffs on the rest of the world (announced with the multi-colored chart in the White House Rose Garden on April 1, 2025 , dubbed “Liberation Day.”). The President also relied on IEEPA to threaten tariffs and to use as leverage in trade negotiations with various countries including South Korea, Japan and Malaysia.

There were two main sets of legal challenges to the IEEPA tariffs–one originating in the U.S. Court of International Trade, and the other in the U.S. District Court for the District of Columbia. Both courts found that IEEPA did not authorize tariffs, and the cases were consolidated on appeal to the Supreme Court.

Key Elements of the Court’s Opinion

• The Court first found that, because the IEEPA tariffs modified the Harmonized Tariff Schedule of the United States (HTSUS), the United States Court of International Trade had exclusive jurisdiction over such a legal challenge. Thus, legal challenges to any future tariffs which modify the HTSUS, even if done under a novel legal theory or through an untested statutory basis, must be brought in the Court of International Trade.
  
  
• The Court held that IEEPA did not authorize the tariffs at issue. Although some portions of the Chief Justice’s opinion were joined only by Justices Barrett and Gorsuch, Justices Sotomayor, Kagan, and Jackson joined the sections of the Chief Justice’s opinion, which found that tariffs under IEEPA are taxes; that Congress alone is vested with the power to levy taxes; and that IEEPA on its own terms does not delegate the authority to impose tariffs to the President.
  
  
• The justices disagreed over whether invoking the Court’s so-called “Major Questions Doctrine” was necessary to resolve the case, and several justices wrote at length about their views on this topic and also on the nondelegation doctrine.
  
  
• The principal dissent (authored by Justice Kavanaugh and joined by Justices Alito and Thomas) disagreed with the majority’s statutory interpretation, and also noted that “numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case—albeit perhaps with a few additional procedural steps that IEEPA, as an emergency statute, does not require.” The dissent suggested that President Trump simply “checked the wrong box” and could accomplish his aims through other trade laws.

Broader Implications and Unsettled Issues

The Supreme Court ruling leaves unanswered several significant questions pertaining to international trade and the importation of goods into the United States.

• Refunds: The ruling did not address whether importers who paid tariffs under IEEPA are eligible for refunds, or the process by which refunds would be issued. There has been separate litigation in the Court of International Trade on this issue that has been stayed pending the Supreme Court ruling. In at least one case, DOJ stipulated that it would pay refunds, and the Court of International Trade indicated in a written opinion that the government would be judicially estopped from reversing its position on the availability of refunds. The Court of International Trade also held that it had the statutory authority to order reliquidation, that is, to order a reassessment of customs duties owed, which would result in refunds of already-paid duties. It will likely take some time for this refund process to play out, and the mechanism for obtaining such a refund—outside of a lawsuit and a court order—remains uncertain.
  
  
• Global Trade Deals: The Trump Administration has made a number of trade deals, including with South Korea, Japan, and Malaysia, along with frameworks for deals with other countries, including India and Vietnam, that were predicated on tariff threats and that relied on IEEPA authority. Now that such authority has been struck down, the status and validity of existing agreements and negotiations over new agreements is unclear.

• Other Tariff Authority: While the Supreme Court’s decision means that President Trump can no longer rely on IEEPA to impose tariffs, and President Trump issued an order subsequently ending those tariffs, there are many other tariff laws under which he does have authority to impose tariffs—several of which were mentioned by Justice Kavanaugh’s dissent. These have procedural, temporal, or tariff value limitations and include:

• • Section 122 (Tariffs for balance of payment surpluses): Up to 15% for 150 days on specific countries. The same day that the Supreme Court’s ruling was announced, President Trump issued an order under Section 122 imposing a 10% tariff for 150 days on all imports that enter the United States between February 24, 2026 and July 24, 2026. However, many products are excluded from the scope of these new tariffs, including certain critical minerals, energy and energy products, certain agricultural products, including beef, pharmaceuticals, and certain vehicles.
    
    
  • Section 201 – Tariffs/quotas causing substantial injury to U.S. industry.
    
    
  • Section 232 (Tariffs for national security reasons): Requires an investigation by Commerce Department, and has been used to impose tariffs on various products, including steel, aluminum, automobiles and automotive parts.
    
    
  • Section 301 (Tariffs for unfair trade practices): This provision, which has already been used for tariffs on China, requires an investigation by the Office of the U.S. Trade Representative.
  • Section 338 (Tariffs in response to discrimination against the United States): This authority, which has never been used, allows for up to 50% tariffs.

In this respect, the Court’s opinion answers one key question, but leaves several more open. The situation is evolving quickly, with the White House already announcing some new, offsetting tariffs. There will accordingly be a period of uncertainty as actions by the administration and the lower courts unfold.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Greta L. Nightingale, an O’Melveny partner licensed to practice law in the District of Columbia; David J. Ribner, an O’Melveny partner licensed to practice law in the District of Columbia and New York; and Alexander N. Ely, an O’Melveny counsel licensed to practice law in the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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