The Battle Over IEEPA Tariffs: What’s Happening, What’s Next, and How Importers Can Protect Their Wallets
In early 2025, the Trump administration turned to an old law—the International Emergency Economic Powers Act (IEEPA)—to slap tariffs on a massive scale. Originally designed to let presidents handle true national emergencies like sanctions or asset freezes, IEEPA was invoked to impose duties ranging from 10% to 50% on imports from countries including China, Mexico, Canada, Brazil, India, Japan, and even “reciprocal” tariffs on nearly every trading partner. The reasons? Things like fentanyl flows, border issues, trade imbalances, and economic threats. These moves raked in billions but sparked immediate backlash, with importers arguing that IEEPA was never meant for everyday tariffs—that’s Congress’s turf under the Constitution.
The litigation kicked off quickly. In April 2025, companies like V.O.S. Selections filed suit at the U.S. Court of International Trade (CIT), claiming the tariffs were “ultra vires,” or beyond the president’s legal authority. The CIT agreed, ruling that IEEPA’s language about regulating commerce in emergencies doesn’t cover import duties, which are handled by specific trade laws. The Federal Circuit Court of Appeals upheld that decision, setting the stage for a Supreme Court showdown. Oral arguments happened on November 5, 2025, in Trump v. V.O.S. Selections, where justices grilled both sides on executive overreach and statutory limits. A ruling is expected any day now—possibly as soon as January 10, 2026—with betting markets giving the administration only a 23-30% shot at winning, based on the skeptical tone from the bench.
What could happen? If the Supreme Court sides with the lower courts and strikes down the tariffs, it could order refunds for over $133.5 billion in duties collected through late 2025. That would be a huge win for importers, easing supply chain costs and signaling tighter reins on presidential emergency powers. But refunds wouldn’t be automatic; they’d likely come through “reliquidation,” where Customs and Border Protection (CBP) recalculates entries and issues checks, often with interest. On the flip side, if the Court reverses and upholds the tariffs, it’s game over—no refunds, and a green light for future admins to use IEEPA more broadly, potentially blurring lines between emergencies and policy preferences. A middle-ground ruling, like allowing some tariffs but not others, is possible but less likely given the case’s scope. Either way, this could reshape U.S. trade law, reminding everyone that emergencies aren’t meant for routine governance.
For importers hit by these duties, the key is acting fast to position yourself for refunds if the Court rules in your favor. Here’s what you need to know and do:
- Assess Your Exposure: Review your import records for IEEPA-affected entries to determine your total monetary impact due to the tariffs and monitor your liquidation dates. This can be done directly via your ACE accounts, or by working with your brokers. Ken Hamanaka is happy to assist all impacted customers in tracking their total exposure on entries filed with us.
- Prepare Backup Options: For liquidated entries, a protest (using Form CF-19) needs to be filed within 180 days to challenge the duties. For unliquidated ones, we can file Post-Summary Corrections (PSCs) to adjust based on future guidance. But heads up: CBP might reject protests if they’re just enforcing the tariffs, so a lawsuit is safer for big exposures.
- File a Protective Lawsuit Now: Hundreds of importers rushed to the CIT in late 2025 under 28 U.S.C. § 1581(i) to stake their claims. These “protective actions” preserve your right to refunds without waiting for liquidation (when duties are finalized). If you haven’t filed, consider joining an existing case or starting one—early birds might get priority in any refund queue. The CIT has stayed these cases pending the Supreme Court’s decision, but once it’s out, things could move quickly. Please check with us should you decide to pursue this option so that we can refer you with trusted trade attorneys
In short, while the Supreme Court’s call could deliver a windfall or a dud, smart importers aren’t waiting around. By getting proactive, you can turn a potential court victory into real cash back, rather than watching from the sidelines. Stay tuned—the trade world is about to get a lot clearer.