The Supreme Court Is About to Rule on Your Import Costs. Here's How to Protect Your Refund Rights Before It Does.

If your company imports goods into the United States, you've been paying tariffs imposed under the International Emergency Economic Powers Act (IEEPA) since early 2025. IEEPA is a 1977 law that gives the President broad emergency powers over international financial transactions. It was designed for things like freezing the assets of hostile governments. It was never meant to be a tariff tool, and no President had used it to impose tariffs until 2025.

Those tariffs, the sweeping "reciprocal" and "Liberation Day" duties that hit nearly every trading partner, have collectively drained over $133 billion from American importers. Tariffs are taxes on imported goods. When a US company brings products in from overseas, it pays these duties to US Customs and Border Protection (CBP) before the goods clear customs.

Two lower courts have already ruled those tariffs illegal. The Supreme Court heard oral arguments on November 5, 2025, and both conservative and liberal justices expressed serious doubt that the President has authority to use IEEPA this way. A ruling is expected any day after the Court returns from recess on February 20.

Here's what most importers don't realize: if the Court strikes down these tariffs, you could be entitled to a full refund of every IEEPA duty you've paid. But only if you've taken the right steps to preserve your claim. Miss the deadline, and you get nothing. Even if the tariffs are declared unconstitutional.

The first wave of "Liberation Day" customs entries starts liquidating around February 13. That's four days from now. "Liquidation" is when CBP finalizes the paperwork on an import shipment and locks in the duty amount. Think of it like a tax assessment becoming final. Once that happens without a protective filing at the Court of International Trade (CIT), the specialized federal court that handles trade disputes, your refund window starts closing.

This is your playbook.

What's Before the Supreme Court

The consolidated case is Learning Resources, Inc. v. Trump (No. 24-1287), consolidated with Trump v. V.O.S. Selections, Inc. (No. 25-250). The core question: does IEEPA, a 1977 statute that lets the President "regulate" imports during a declared national emergency, authorize the imposition of tariffs?

Both lower courts said no.

The Court of International Trade ruled in May 2025 that IEEPA doesn't give the President tariff authority, and permanently ordered the government to stop enforcing the duties. The Federal Circuit (the appeals court that handles trade cases) upheld that ruling with its full bench of judges in August 2025. The D.C. District Court reached the same conclusion in a parallel case.

The Supreme Court took the case on an expedited basis, consolidating both challenges and scheduling oral arguments for November 5, 2025. That was 96 days ago.

What the Justices Said

The oral argument lasted nearly three hours. The tone was not encouraging for the administration.

Justice Sotomayor and Justice Barrett pressed the government on a basic textual point: IEEPA lets the President "regulate" and "prohibit" imports, but the statute never mentions "tariffs," "duties," or "taxes." The power to tax, they noted, belongs to Congress under Article I, Section 8 of the Constitution.

Justice Gorsuch called the government's reading a "one way ratchet" of congressional power to the executive. If IEEPA authorizes tariffs, he asked, what limits exist on the President's ability to tax anything?

Chief Justice Roberts characterized the tariff power as fundamentally a taxing power, which the Constitution reserves to Congress.

Only Justices Alito and Thomas seemed open to the government's position, suggesting the Court should be cautious about limiting presidential authority in foreign affairs.

Most court watchers read the oral argument as unfavorable for the government, though the extended delay suggests the justices may be more divided than the questioning implied.

Why the Delay?

The Court went on a month-long recess without issuing the opinion. At 96 days post-argument, the case has exceeded the typical timeline for expedited decisions. SCOTUSblog reported that the justices "have not signaled that they regard this dispute as the kind of emergency that many in the outside world do."

That's a striking disconnect when you consider the billions at stake.

The earliest possible opinion date is now February 20, when the Court returns from recess. But it could come any opinion day after that, potentially stretching to June 2026.

US Trade Representative Jamieson Greer (the country's top trade negotiator) told CNBC on February 3 that the case is "not an open and shut case" and that the Court is "taking its time" given the "enormous" stakes. Treasury Secretary Bessent has said it's "very unlikely" the Court will overturn the tariffs.

The administration may be right that it wins. But if it loses, the refund implications are staggering, and the deadlines for preserving those refund rights aren't waiting for the Court to decide.

The $133 Billion Refund Question

Here's where it gets practical.

If the Supreme Court rules that IEEPA tariffs are unlawful, importers who paid those duties can seek refunds. The Court of International Trade confirmed in a January 14, 2026 order that it has authority to order refunds by reopening and recalculating previously finalized import entries, a process called "reliquidation." The government's own lawyers conceded this point in court, and the CIT said it will hold the government to that concession. In legal terms, that means the government can't change its mind later and argue the court doesn't have the power to order refunds.

Total IEEPA tariff collections since February 2025 exceed $133 billion. It's common for frequent importers to have seven- or eight-figure exposure. According to industry estimates, over 2,000 companies have filed protective complaints at the CIT, with filings accelerating after Costco filed a high-profile suit seeking refunds of its IEEPA duties.

But there's a critical wrinkle that catches most importers off guard.

You Can't Just File a Protest

Normally, when an importer thinks they've been overcharged on duties, they file what's called a "protest" with CBP. It's basically a formal objection form (CF-19) that says "we think you assessed the wrong amount." CBP reviews it, and if you're right, they adjust. That process doesn't work here.

The CIT has ruled that IEEPA tariffs are not "protestable" under 19 U.S.C. § 1514 because CBP isn't making its own decision about what you owe. It's just collecting whatever the President's executive order tells it to collect. Since CBP has no discretion in the matter, there's no CBP decision to challenge.

That means the only way to preserve your refund rights is to file a lawsuit at the Court of International Trade under 28 U.S.C. § 1581(i), the CIT's residual jurisdiction provision. A CBP protest alone won't protect you.

This isn't theoretical. Importers who rely solely on filing a protest and then see those protests rejected will have no other path to recovery if their CIT filing deadlines have passed.

The Automatic Stay Makes Filing Low-Cost

Here's the good news: CIT Administrative Order 25-02 automatically stays all new IEEPA refund cases pending the Supreme Court's decision. You can file a protective complaint now without triggering active litigation costs. No discovery. No briefing. No court appearances. You file, your case gets stayed, and you wait for the Supreme Court to rule.

The filing fee at the CIT is $400. For importers with six, seven, or eight figures of IEEPA duty exposure, that's a cheap insurance policy.

Several law firms are organizing group filings where multiple importers share costs. If you're a smaller importer, this may be the most efficient path.

Liquidation Deadlines Are the Real Threat

Here's what makes this urgent. Every time you import goods, CBP creates an "entry" recording what came in, its value, and the duties owed. Under 19 U.S.C. § 1504, CBP has 314 days (roughly 10 months) to finalize that entry. When the clock runs out, the entry "liquidates," meaning the duty amount becomes final. Once an entry liquidates, your options narrow significantly.

The earliest IEEPA tariffs took effect on February 4, 2025 (the fentanyl-based tariffs on Canada and Mexico). Those entries began liquidating around December 15, 2025.

The "Liberation Day" reciprocal tariffs took effect on April 5, 2025. Those entries start liquidating around February 13, 2026. That's this week.

CBP has denied requests to extend liquidation deadlines. The agency's position: pending Supreme Court litigation is not a valid basis for extension.

Once your entries liquidate, you have 180 days to file a protest. But as noted above, protests likely don't work for IEEPA tariffs. The CIT filing is your real safety net, and you should have it in place before liquidation, not after.

ACE Registration: Another Box to Check

There's one more thing to handle. On January 2, 2026, CBP published an interim final rule ending all paper refund checks. This isn't specific to IEEPA. It applies to all CBP refunds. As of February 6, CBP only issues refunds through electronic bank transfers (called ACH, or Automated Clearing House) via CBP's online portal, the Automated Commercial Environment (ACE).

If you haven't enrolled in the ACH Refund program through the ACE Portal, do it now. You can still register after February 6, but CBP won't process your refund until your enrollment is complete. Without an ACE account and ACH Refund application on file, any refund you're owed sits in limbo.

What If the Government Wins? And What If It Loses?

There are really three scenarios to model.

Scenario 1: The government wins. The Court rules IEEPA authorizes tariffs. Nothing changes on the duty front. Your CIT filing costs you $400 and goes nowhere. The tariffs continue as they are.

Scenario 2: The Court strikes down IEEPA tariffs. Refunds become available for importers who preserved their rights. The CIT will issue guidance on how it will reopen and recalculate those finalized entries. But don't expect immediate checks. The government has indicated that even in a loss scenario, the refund process will take time. CBP isn't going to issue blanket refunds overnight.

Scenario 3: The Court strikes down IEEPA tariffs, and the administration reimposes tariffs under different authority. This is the "Plan B" scenario. And frankly, it's the one your CFO should be modeling.

The Plan B Tariff Authorities

The administration has been publicly developing contingency plans to reimpose tariffs within 24 hours of an adverse ruling. Investment research firm TD Cowen has reported that the transition could happen overnight. Four alternative statutes are on the table, each with different rules and limitations:

Section 122 of the Trade Act of 1974 is the fastest option. The President can impose tariffs up to 15% to address trade deficit problems (when the US is buying far more from other countries than it's selling), with no investigation required. But the tariffs expire after 150 days unless Congress extends them. This statute has never been used for tariffs. Goldman Sachs estimates it could replace 56% to 73% of IEEPA tariff revenue depending on the rate.

Section 232 of the Trade Expansion Act covers national security tariffs, the same authority behind the semiconductor tariff we wrote about last week. The Commerce Department already has investigations covering roughly 40% of US trade. But Section 232 requires a formal investigation and presidential determination, which limits how quickly it can be deployed across new product categories.

Section 301 of the Trade Act of 1974 targets unfair trade practices. The US Trade Representative (USTR), the government's top trade negotiator, can impose tariffs after a 12-18 month investigation. The timeline is the problem. If USTR launches new Section 301 investigations after an adverse ruling, tariffs wouldn't take effect until early 2027 at the earliest.

Section 338 of the Tariff Act of 1930 authorizes retaliatory tariffs up to 50% against countries that discriminate against US goods. No formal investigation is required, but the statute hasn't been used since the 1940s and would face challenges at the World Trade Organization (WTO), the international body that governs trade rules between countries.

The bottom line: replacement tariffs are coming if IEEPA falls. But none of these authorities can replicate the universal, unlimited scope of the current IEEPA regime. Your tariff exposure will change, not disappear. Plan accordingly.

The Board Meeting Question

If you're sitting in a board meeting this month, here's the question your investors or directors will ask: "What's our IEEPA tariff exposure, and what are we doing about it?"

You need three numbers ready. First, your total IEEPA duties paid since February 2025 (or whenever you started paying). Second, your monthly run rate on IEEPA tariffs. Third, your potential refund amount if the Court rules in importers' favor.

And you need one answer: "We've filed a protective complaint at the CIT, our ACE registration is current, and we're modeling our cost structure under three tariff replacement scenarios."

If you can't say that yet, this week is when you fix it.

Practical Takeaways

Here's what your team should be doing right now:

• Calculate your total IEEPA duty exposure since February 2025. Pull your customs entry data and isolate payments attributable to IEEPA tariffs (fentanyl-based, reciprocal, and Liberation Day duties). This is the refund amount you're protecting.
• File a protective complaint at the CIT immediately if you haven't already. The filing fee is $400. Under Administrative Order 25-02, your case will be automatically stayed pending the Supreme Court ruling. Several firms are organizing group filings for smaller importers.
• Verify your ACE registration and ACH Refund enrollment with CBP. As of February 6, CBP only issues refunds electronically. If you haven't enrolled in the ACH Refund program, do it now. You can still register, but refunds won't process until enrollment is complete.
• Check the liquidation status of your earliest IEEPA entries. Liberation Day entries begin liquidating around February 13. If entries are liquidating and you haven't filed at the CIT, your refund window is closing.
• Instruct your customs broker to file post-summary corrections (amendments to your original import paperwork) on any entries that haven't been finalized yet. This preserves additional recovery paths. It's a belt-and-suspenders step alongside the CIT filing.
• Model your tariff exposure under three scenarios: IEEPA tariffs remain; IEEPA tariffs struck down with refunds; IEEPA tariffs replaced by Section 122/232 alternatives at different rate levels. Present all three to your CFO and board.
• Review supply contracts for tariff allocation clauses. International purchase agreements use standard terms that determine who pays duties. "DDP" (delivered duty paid) means the seller covers all tariffs. "DAP" (delivered at place) means the buyer does. Check your contracts so you know whether a tariff change helps your bottom line or your supplier's. If the tariff landscape shifts, you want clarity on who bears the cost change.
• Brief your board or investors at the next meeting. Frame the IEEPA litigation as both a risk (tariffs may persist) and an opportunity (refund recovery). Show that you're actively preserving your rights.

Looking Ahead

The Supreme Court is deciding whether the President can unilaterally tax every import into the United States using a 1977 emergency powers statute. Whatever the answer, the implications for your business are immediate. If the tariffs stand, you keep paying. If they fall, you could recover everything you've paid, but only if you've done the work to preserve your claim.

February is the month to act. The liquidation clock is ticking, the Court is about to rule, and the administration already has replacement tariffs ready to deploy. Companies in manufacturing and import-heavy industries that move now will be positioned for any outcome. Companies that wait may find that their refund rights expired while they were still reading about the case.

If you need help assessing your exposure or filing a protective complaint, our regulatory compliance counsel can walk you through the process.

This analysis reflects publicly available information as of February 9, 2026. Companies should consult qualified trade counsel for compliance guidance specific to their import operations and tariff exposure.