Supreme Court Strikes Down IEEPA Tariffs: What Importers Should Know

What Happened: The Supreme Court Ruling

On February 20, 2026, the Supreme Court issued a landmark 6-3 decision in Learning Resources, Inc. v. Trump (No. 24-1287), holding that the International Emergency Economic Powers Act (IEEPA) does not grant the President the power to unilaterally impose tariffs of indefinite scope. The Court struck down tariffs imposed under Proclamation No. 11,011 as exceeding the President's statutory authority.

Notably, the majority opinion did not address how refunds would be administered, leaving remedial mechanics entirely to future proceedings at the Court of International Trade (CIT). Only the dissent flagged the refund process, with Justice Kavanaugh warning it would likely be a "mess." The refund mechanics now depend on CAPE, protest deadlines, and any later court or CBP phases.

It's important to understand what was and was not struck down. Only tariffs imposed under IEEPA authority are affected. These are the so-called "reciprocal" tariffs that were layered onto imports from China (beginning February 2025), Canada and Mexico (March 2025), and the broad reciprocal tariffs applied to virtually all trading partners (April 2025). If you're looking at your entry data, these correspond to HTS Chapter 99 codes in the 9903.01.xx and 9903.02.xx series.

Tariffs under other legal authorities remain in effect:

• Section 301 tariffs on Chinese goods (separate statutory authority)
• Section 232 tariffs on steel and aluminum (national security authority)
• Normal MFN (Most Favored Nation) duties under the Harmonized Tariff Schedule

The Administration moved quickly. On February 24, it pivoted to Section 122 of the Trade Act of 1974, imposing a 10% global surcharge on all imports (subsequently signaled to increase to 15%, though not yet confirmed by official CSMS as of publication).

Refunds Are Not Automatic

CBP has now opened CAPE, its ACE Portal workflow for IEEPA duty refund requests. Refunds still are not automatic: the importer of record or authorized original broker must submit eligible entry numbers through CAPE, and entries outside Phase 1 may still need protest or litigation strategy.

The numbers are staggering. At a collection rate of roughly $500 million per day, IEEPA tariffs accounted for approximately 50% of total U.S. customs duties. The total refund pool is estimated at $160–175 billion.

The President has signaled resistance to processing refunds. There is also an emerging commercial dispute layer: importers who pass tariff costs to their customers may face questions about who is actually entitled to the refund, the importer of record or the customer who absorbed the surcharge. Pax helps importers of record assess and document their position clearly.

Three Possible Recovery Paths

Based on current CBP guidance, there are three practical tracks for recovering IEEPA duties paid. The difference in cost, speed, and complexity between them is significant, and which path applies to a given entry depends on where that entry stands in the liquidation cycle.

1. CAPE Declarations

CBP's Phase 1 mechanism is the CAPE Declaration in ACE. The importer of record or authorized original broker uploads a CSV of entry numbers; CBP validates the entries, removes IEEPA Chapter 99 lines from accepted entries, recalculates duties, and issues consolidated ACH refunds.

• Refund speed: For valid Phase 1 entries, CBP says refunds are generally issued within 60 to 90 days after CAPE Declaration acceptance unless further review is needed.
• Filing method: ACE CAPE Portal CSV upload, not a PSC refund request.
• What changes: Only the IEEPA tariff lines are removed. Section 301, 232, and product duty rates stay exactly the same.

Note: CBP's April 13, 2026 CSMS says filers are prohibited from initiating an IEEPA duty refund request by filing a PSC. PSCs may still matter for correcting other entry issues before CAPE.

2. CBP Protests

For entries that have already liquidated or are within 15 days of liquidation, importers can file a formal protest under 19 USC §1514. Unlike a PSC, a protest is a formal legal dispute and a challenge to CBP's final decision on the entry. This is a fundamentally different and more adversarial process:

• Filing window: Within 180 days of the date of liquidation.
• Cost: $500–$2,000+ per entry (industry range), significantly more expensive than PSCs.
• Timeline: 6 to 18+ months for resolution.
• Process: Requires a legal brief, manual CBP review, and formal adjudication.

It's important to know that the CIT has questioned whether the protest system is adequate for handling IEEPA refunds at this scale. Protests denied by CBP can be appealed to the Court of International Trade.

Even with CAPE in place, the protest period is clear. Failure to file a protest within the 180-day post liquidation period could prevent recovery for entries that cannot be handled through CAPE or later administrative relief.

3. Court of International Trade (CIT) Litigation

For entries that have moved beyond the 180-day protest window or are for any other reason "not protestable," importers may need to file lawsuits directly with the CIT. This is litigation-driven, the most expensive option, and carries a multi-year timeline.

Understanding the Deadlines

Every import entry has a ticking clock. After CBP accepts your entry, it schedules a liquidation date, typically 314 days later. Fifteen days prior to the scheduled liquidation, the entry is locked and the PSC window closes permanently.

CAPE and PSC Boundaries

For IEEPA refunds, CAPE is the refund request. PSCs are still constrained by the normal timing rules: within 300 days of entry and at least 15 days before scheduled liquidation. If an entry needs a non-IEEPA correction, handle that before it goes into CAPE.

Protest Deadline

Once an entry is no longer eligible for a Post Summary Correction (PSC), the next available administrative remedy is to file a protest under 19 U.S.C. §1514. Protests must be filed within 180 days of the date of liquidation and CBP applies this deadline strictly. A protest submitted even one day late will be denied as untimely. Because liquidation can occur earlier than expected, importers should actively monitor liquidation dates and calculate the 180-day deadline immediately. Missing this window may eliminate the ability to pursue an administrative refund and could leave litigation as the only remaining option.

Why This Is Urgent

For many importers, the first IEEPA tariff entries were filed in February 2025. That means the earliest entries are already approaching or have passed the PSC window. Entries from the spring and summer of 2025 are moving through the timeline right now, and every day that passes, more entries cross from PSC-eligible to protest-only territory. The first 180-day protest window for the earliest IEEPA entries, filed around February 1, 2025, expires approximately June 10, 2026. That clock is running.

What Importers Should Do Now

If you paid IEEPA tariffs at any point since February 2025, here's your action plan:

1. Perform an analysis of the import entries affected by refundable IEEPA duties and the potential refunds.
2. Ensure you have properly retained import documentation and proof of payment.
3. Understand where your imports fall in the liquidation process.
4. Submit eligible entries through CAPE, and file protective protests where counsel determines the protest window is the right preservation path.

The Supreme Court decision presents a rare and meaningful opportunity for importers to recover substantial duties paid over the past year. With clear deadlines and defined recovery paths, companies that take a structured, proactive approach can turn this moment into a significant financial win. By analyzing entries now, organizing documentation, and preparing to file as guidance develops, importers can maximize refunds while minimizing cost and disruption.

• Audit your entry portfolio: Identify which entries are unliquidated vs. liquidated, and determine where each stands relative to the PSC and protest windows. Prioritize entries closest to expiring.
• Isolate your IEEPA tariff lines: Separate Chapter 99 codes (9903.01.xx, 9903.02.xx series) from Section 301, Section 232, and standard product duties. Only IEEPA duties are refundable under this ruling, and for many importers, IEEPA represents the majority of duties paid over the past year.
• Map your deadlines: For each entry, calculate CAPE eligibility, any entry-correction cutoff, and the protest window (180 days from liquidation). Build a timeline so you know exactly when each entry expires.
• Identify all your broker filer codes: Many importers have entries filed by multiple customs brokers over the past year. CAPE Declarations can only be submitted by the IOR or the authorized broker who filed each entry, which means coordinating across brokers or working with a partner that can manage the full portfolio.
• Assess the pass-through question: If your contracts passed tariff costs to customers via surcharges, document your position as the importer of record now. Refund entitlement may be contested.
• Consider filing CIT lawsuits to preserve refund rights: Given the CIT's indication that the protest system may be inadequate, filing with the CIT may be necessary to protect your claims, particularly for older entries.
• Prepare to file immediately: CAPE uses CSV entry lists, but the work behind those lists is not simple. Have your documentation ready, coordinate broker access, and do not let the protest clock run while you wait for a cleaner filing window.
• Account for Section 122 replacement tariffs: The new 10% global surcharge took effect February 24 and runs through July 24, 2026 (with a potential increase to 15% signaled by the administration; monitor official CSMS updates). Factor this into your forward-looking cost models.
• Work with a licensed customs broker or trade compliance partner: The intersection of tight deadlines, evolving guidance, multiple recovery paths, and cross-filer complexity makes professional support essential.

How Pax Can Help

As CBP processes IEEPA refunds through CAPE and later phases, importers should be organizing data and preparing to act. Pax helps you move quickly as instructions change and is built to handle the full stack of data processing, document reconciliation, filing, and audit defense that a refund claim of this complexity may demand:

• Instant exposure analysis: Our AI isolates IEEPA duties across your full entry portfolio in minutes.
• Recovery path strategy: We assess whether CAPE, protest, or litigation preservation is appropriate for each entry based on current law and evolving guidance.
• CAPE filing support: As a licensed customs broker, we prepare CAPE CSVs and coordinate submission through the proper ACE account.
• Cross-filer coordination: We manage filings across multiple original brokers seamlessly.
• Deadline prioritization: Entries are sequenced by PSC and protest expiration to protect recovery rights.
• Agentic document processing: If claims require linking entries to source documents, Pax reconciles documentation automatically at scale. No manual processing, no Excel.
• Application drafting and audit support: If formal applications or audits are required, we're ready to help build the record.