SCOTUS Strikes Down IEEPA Tariffs: A Major Shift in Executive Trade Power

The U.S. Supreme Court’s 6–3 decision in Learning Resources, Inc. v. Trump marks a watershed moment for international trade law and supply chain cost management. By ruling that the International Emergency Economic Powers Act (IEEPA) does not grant the President the authority to impose tariffs, the Court has effectively dismantled a key pillar of the current administration’s trade strategy. The decision centers on the constitutional principle that the power to tax—which includes the imposition of tariffs—resides exclusively with Congress. While IEEPA allows the executive branch to block or restrict transactions during a declared national emergency, the majority opinion clarified that this 'regulatory' power does not extend to the creation of new taxes or duties without explicit legislative delegation.

This ruling has immediate and profound implications for global supply chains, particularly those involving goods from Canada, Mexico, and China that were targeted by the 2025 emergency tariffs. These duties were originally implemented to combat drug trafficking and address perceived trade imbalances, but the Court found that the statute’s language was too narrow to support such broad economic measures. For logistics and procurement professionals, the most pressing takeaway is that U.S. Customs and Border Protection (CBP) must immediately cease the collection of any duties levied solely under IEEPA authority. This provides an instant, albeit narrow, relief for importers who have seen their margins squeezed by these specific measures over the past year.

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Supreme Court’s 6–3 decision in Learning Resources, Inc.

However, the decision does not provide a blanket removal of all trade barriers. The Court was careful to distinguish IEEPA from other statutes like Section 232 of the Trade Expansion Act (covering steel and aluminum) or Section 301 (covering Chinese technology and intellectual property). Because those statutes contain specific, explicit delegations of tariff-setting power from Congress to the President, they remain legally intact. Supply chain managers must therefore conduct a granular audit of their current duty payments to identify which costs are tied to the now-invalidated IEEPA measures versus those tied to still-active trade enforcement actions.

The prospect of refunds is perhaps the most complex aspect of the ruling. Justice Brett Kavanaugh’s dissent highlighted the potential for the U.S. government to owe billions of dollars in back-duties to importers. While the Supreme Court did not mandate an automatic refund mechanism, previous filings by the Department of Justice in the Court of International Trade (CIT) suggest the government may not oppose refund claims if the tariffs were found unlawful. This signals a likely surge in litigation and administrative claims before the CIT. Companies should prepare for a protracted process, as the sheer volume of duties collected since 2025 could lead to significant administrative bottlenecks within the Treasury and CBP.

Looking forward, this ruling significantly curtails the 'emergency' playbook for trade policy. Future administrations will no longer be able to use IEEPA as a catch-all tool for rapid tariff implementation. Instead, they will be forced to rely on existing, more procedurally rigorous statutes or seek new, specific authorization from Congress. For the logistics industry, this suggests a return to a more predictable, if slower, regulatory environment. The era of 'tariff by executive fiat' via emergency declaration has met a firm constitutional limit, forcing a shift back toward traditional legislative and administrative channels for trade enforcement.