Supreme Court Seen as Skeptical of IEEPA Tariffs

After a Nov. 5 hearing in which the Supreme Court was widely seen as skeptical of the tariffs President Trump has imposed this year under the International Emergency Economic Powers Act, importers who have paid those tariffs should act quickly to take the necessary steps to preserve their right to potential refunds.

According to press sources, the Supreme Court justices asked both sides pointed questions during the two-and-a-half hour oral arguments. Issues raised included whether IEEPA’s authority to regulate trade includes authority to impose tariffs; whether the IEEPA tariffs violate the major questions doctrine, which holds that Congress must be clear in delegating substantial power to the president; and whether in enacting IEEPA Congress impermissibly delegated to the president its exclusive authority to levy taxes.

However, “skeptical” is the word that press sources used most frequently in describing the justices’ views of the president’s expansive use of IEEPA to impose “reciprocal” tariffs on imports from nearly all countries, based on a declared national emergency regarding U.S. trade deficits, and separate tariffs on imports from China, Canada, and Mexico, which are based on a declared national emergency regarding the flow of fentanyl and precursor chemicals from those countries into the U.S. Among other things, sources said, there appeared to be concern that upholding the use of IEEPA to impose tariffs could open the door to a broader presidential use of that law in the future that Congress would have limited ability to constrain.

Many observers believe the Supreme Court could hand down a final decision within months. If that decision invalidates the reciprocal and/or fentanyl tariffs, importers may be eligible for refunds of tariffs paid —but potentially only if they preserve their rights through timely protests. Even if the tariffs are upheld, importers may still be eligible for other refunds to mitigate their impacts.

At least one of the Supreme Court justices expressed concern about the complexity of administering a potential refund process, and there is some speculation that even if the court overturns the tariffs it could remand the case to a lower court for further proceedings on that issue, which could delay any potential refunds.

Nevertheless, there are a number of steps importers should take now to best position themselves to secure potential refunds. ST&R has substantial experience helping companies with all of these measures. Contact us at tariffs@strtrade.com for more information.