Tariff And Refund: Potential Refund Issues After Supreme Court Hears Arguments In IEEPA Cases

Highlights

• The U.S. Supreme Court is evaluating whether the International Emergency Economic Powers Act (IEEPA) authorizes the president to impose tariffs, raising questions about statutory interpretation, delegation of taxing authority and the scope of presidential foreign-affairs powers.
• Several Supreme Court justices expressed skepticism of the Trump Administration's position, focusing on the revenue-raising nature of tariffs and the practical challenges of creating or administering a reimbursement process if the tariffs are invalidated.
• If the tariffs are struck down, importers will need to use existing mechanisms such as post-summary corrections or protests under 19 U.S.C. §1514 to seek refunds, while downstream parties that ultimately paid tariff costs may face complex recovery issues shaped by contractual arrangements.

The U.S. Supreme Court recently heard oral argument in Trump v. V.O.S. Selections, Inc. and Learning Resources, Inc. v. Trump to decide whether the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. (IEEPA), authorizes the president to impose tariffs. Oral argument was held on Nov. 5, 2025, and no opinion has been issued to date.

IEEPA is an extremely broad statute. In pertinent part, it provides that the president may, "by means of instructions, licenses or otherwise ... regulate ... nullify, void, prevent or prohibit, any ... importation or exportation of ... any property in which any foreign country or a national thereof has any interest." (Emphasis added.) The word "tariff" does not appear in the statute, and that omission is central to the dispute.

The plaintiffs' basic theory in V.O.S. Selections and Learning Resources is that the president's power to regulate imports under IEEPA does not include the power to impose tariffs and that construing the statute to imply such authority would raise serious nondelegation concerns because Congress must clearly authorize delegations of taxing or duty-imposing powers. The government counters that the broad power to regulate imports necessarily includes tariff authority, in part because IEEPA expressly permits the president to prohibit imports entirely, and tariffs are less restrictive than an outright ban. The government also argues that delegations in the foreign-affairs context receive significant deference and that the major questions doctrine has not been applied in the foreign-policy arena.

This dispute therefore implicates whether a tariff should be viewed as a permissible supplemental power implied from IEEPA's text and the president's foreign-affairs authority or instead as a tax that cannot be imposed absent explicit congressional authorization under Article I, Section 8.

Several justices expressed skepticism about the administration's position. Chief Justice John Roberts questioned how a multibillion-dollar tariff regime, traditionally a legislative function, could rest on statutory silence, raising concerns similar to those reflected in major-questions jurisprudence. Justice Sonia Sotomayor pressed the government on the revenue-raising function of tariffs, comparing them to a tax.

A notable exchange occurred when Justice Amy Coney Barrett asked how the reimbursement process would work if the Court ruled for the plaintiffs. Plaintiffs' counsel referenced existing refund mechanisms, including 19 U.S.C. § 1514 protests and other established U.S. Customs and Border Protection (CBP) refund pathways, while acknowledging that the Court could limit relief to a prospective remedy. It remains unclear why these existing procedures would not be adequate to unwind tariff payments that some scholars have argued constitute a chaotic, politically motivated approach to import regulation.

19 U.S.C. § 1514 – Protest Against Decisions of Custom Service

If the IEEPA tariffs are ultimately struck down by the Supreme Court, importers likely will not receive automatic refunds. Two mechanisms currently exist to obtain refunds: 1) post-summary corrections for unliquidated import entries (generally those entered within the past 314 days) and 2) administrative protests for liquidated import entries (those past the post-summary correction period).

For liquidated entries, importers must affirmatively request refunds by filing a Section 1514 protest. Importers have 180 days from liquidation to protest and 180 days from a protest denial to file suit under the U.S. Court of International Trade's protest jurisdiction. If protestors miss either of those deadlines, any suit on the same subject matter is barred. If CBP delays action, importers may invoke accelerated disposition under 19 C.F.R. § 174.22, under which a protest is deemed denied if CBP does not act within 30 days, thereby permitting the importer to commence suit in the U.S. Court of International Trade.

Alternatively, importers that have paid these tariffs could consider filing suit directly in the U.S. Court of International Trade rather than waiting for CBP to act, particularly if they seek a court-ordered refund alongside a determination on the tariffs' legality. A word of caution: Any separate lawsuit could be mooted if the government later establishes a refund process. Courts may also require the importer to have filed a protest or demonstrate that no adequate administrative remedy was available through the normal process.

One question not raised at oral argument could still prove significant. Section 1514 provides a potential remedy for importers, but what about downstream parties to whom the tariff cost was passed and who ultimately paid it? Liability and recovery for such parties will likely depend on the business and contractual arrangements between importers and their U.S. customers, as customs law applies to the import transaction and the importer of record.

Conclusion

As noted above, these issues may ultimately be moot if the Supreme Court rules for the government or rules for the petitioners but limits relief to prospective application. But in anticipation of a favorable ruling, affected parties should begin consulting with their advisors, gathering relevant documentation and preparing to take timely steps to secure available refunds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.