A year after President Donald Trump launched an expansive tariff campaign under the banner of “Liberation Day,” U.S. trade policy is undergoing a significant shift following a landmark Supreme Court decision. 

Many tariffs imposed under the International Emergency Economic Powers Act have been invalidated, triggering a large-scale refund process for importers. At the same time, the administration is turning to alternative legal authorities to preserve key elements of its trade agenda.

Supreme Court Ruling  

On Feb. 20, the high court ruled 6–3 that the act does not grant the president authority to impose broad, indefinite tariffs. 

The decision dismantled the foundation of Trump’s reciprocal tariff program, which had imposed duties – generally starting at 10% and rising higher for certain countries and goods – to address international trade imbalances, national security concerns and issues such as fentanyl trafficking. 

Estimates suggest the tariffs generated $165 billion to $182 billion from early 2025 until the ruling.

Within hours of the decision, the administration invoked Section 122 of the Trade Act of 1974 to implement a temporary 10% across-the-board import surcharge on goods from most countries, effective February 24, 2026. This measure is set to expire after 150 days, on July 24, unless Congress extends it. 

Refunds Underway for Invalidated Tariffs

Although the Supreme Court did not directly address refunds, subsequent litigation has accelerated the process. On March 4, the U.S. Court of International Trade, led by Judge Richard K. Eaton, ordered U.S. Customs and Border Protection to halt collection of IEEPA-based duties and to facilitate refunds for 53 million entries. 

CBP is developing a four-step electronic refund system, including a claims portal and bulk-processing capabilities. As of early April, key components were reportedly 60% to 85% complete, with processing times estimated at roughly 45 days once operational. 

The agency has signaled that claims processing could begin by mid-April. More than 330,000 importers and millions of entries may be eligible, though filings to date have been concentrated among larger firms. Smaller businesses may rely more heavily on administrative protests.

Refunds will primarily go to importers – the entities that paid the tariffs at entry – rather than to consumers or downstream buyers. 

In total, refunds could return from $166 billion to $182 billion, with interest potentially adding billions more if payments extend into 2027. 

Tariff Policy Continues to Evolve

Even as refunds move forward, the administration has signaled it intends to maintain an aggressive tariff posture.

“We had a setback at the Supreme Court in terms of the tariff policy, but we will be implementing or conducting Section 301 studies, so the tariffs could be back in place at the previous level by beginning of July,” Treasury Secretary Scott Bessent said Tuesday at a Wall Street Journal event in Washington.

The administration has indicated it will continue to rely on authorities such as Section 232 (national security), Section 301 (unfair trade practices), and the temporary Section 122 surcharge to maintain its “America First” approach. Recent actions include adjustments to metals tariffs, new pharmaceutical duties and ongoing trade negotiations with other countries. Officials continue to frame tariffs as a key negotiating tool, even in the wake of the IEEPA ruling.

Legal challenges are ongoing, including lawsuits targeting the Section 122 tariffs. Questions around implementation, exemptions, and potential extensions are likely to shape the policy landscape through 2026 and beyond.