Today, the U.S. Supreme Court issued its decision in Learning Resources, Inc. et al v. Trump, ruling 6-3 that the President exceeded his statutory authority under the International Emergency Economic Powers Act (IEEPA).  This decision brings two major implications to the forefront:   

• The matter will now go back to the Court of International Trade (CIT) to determine whether refunds will be issued universally or limited strictly to named plaintiffs. As a result, importers should proactively audit their entries, file administrative protests, and submit post-summary corrections to avoid permanently forfeiting their funds.
• In response, to maintain its trade objectives, the Trump Administration is rapidly deploying new legal countermeasures, including an imminent 10% global baseline tariff under Section 122 and targeted Section 232 and 301 investigations.

Financial Impact and Liability

The invalidation of these tariffs creates a significant fiscal obligation for the federal government.

• Estimated Liability: Potential refund liabilities are estimated between $150 billion and $170 billion.
• Government Capacity: Treasury Secretary Scott Bessent has confirmed a projected March 2026 cash balance of $850 billion, indicating sufficient liquidity to fulfill court-ordered refunds.
• Reliquidation of entries to enable tariff refunds: In an earlier case, importers asked the CIT to pause the final processing of IEEPA tariffs to avoid permanently losing those payments. The government responded by admitting that the court can still order refunds even after duties have been paid. Because of this admission, the CIT decided there was no risk of permanent harm and allowed the processing to continue, making it clear that it will hold the government to its word.

Potential Refund Mechanisms: The HMT Precedent

Should a nationwide refund be authorized, the handling of refunds following the 1998 Supreme Court decision in United States v. U.S. Shoe Corp. (which invalidated the Harbor Maintenance Tax on exports as unconstitutional) serves as the likely historical model.  While Treasury funds are available, the administrative process is expected to be protracted and resource-intensive. Key characteristics of this process would likely include:

1. Dedicated Claims Resolution Procedure: The CIT may oversee the creation of a specialized system to verify and process individual refund requests.
2. Evidentiary Burden: The burden of proof remains with the claimant; importers must provide line-item verification of tariff payments.
3. Strict Filing Windows: Recovery will likely be subject to non-negotiable administrative deadlines.
4. Principal Recovery Only: Based on the HMT precedent, refunds may be limited to the original dollar amount paid, excluding pre-judgment interest.

Securing Refunds Without a Nationwide Injunction

If, instead, the CIT restricts relief to named plaintiffs, entities must affirmatively assert their claims to avoid permanent forfeiture.  Procedural safeguards include:

• Audit of Liquidation Status: Rigorous monitoring of entry liquidation dates to ensure timely legal recourse.
• Administrative Protests (19 U.S.C. § 1514): Filing formal protests within the 180-day statutory deadline for liquidated entries.

Refunds on Unliquidated Customs Entries

For those importers who have entries still pending with CBP that have not been liquidated, filing a Post-Summary Correction (PSC) may be the most efficient route to a refund.  The PSC process allows the importer to revise their entry documentation with CBP and claim lower duties are owed than were paid at the time of entry.  At liquidation, CBP will refund the difference back to the importer.

Executive Response and New Trade Actions

Following the ruling, President Trump announced an immediate shift to alternative legal authorities to maintain his administration’s trade objectives. The President characterized the Court’s decision as one that “clarified” and “crystalized” executive power rather than diminishing it.  New regulatory measures include: 

• Section 122 (Trade Act of 1974): The President intends to issue an executive order imposing a 10% across-the-board global tariff pursuant to Section 122, effective within three days.  This is being done to address “balance of payments” concerns.  That statute allows for a temporary import surcharge of up to 15% for a duration of 150 days, following which the duty expires absent enactment of legislation to keep it in place.
• Section 301 Investigations: The President has initiated several new investigations into other countries allegedly “unfair” acts, policies, and practices.  In the wake of the Supreme Court decision, the President may initiate more section 301 investigations.  
• Section 232 (Trade Expansion Act of 1962):  This provision allows for the imposition of tariffs to address imports of products that the President determines to be impairing the national security.  The President relied on section 232 in his first term as the basis for imposing tariffs on steel and aluminum products.  In his second term, the President has taken section 232 action on still more products.  Whereas action under section 301 is country-specific, action under section 232 is product-specific and must be predicated on an investigation and findings by the Commerce Department.  In the wake of the Supreme Court decision, we likely will see more Section 232 investigations  

The Learning Resources ruling necessitates an immediate shift in corporate trade strategy.  While the legal invalidation of IEEPA duties provides a mechanism to reclaim duties paid, it also marks a transition into a more fragmented and aggressive trade enforcement era.  Importers should prioritize the proactive recovery of eligible refunds while re-evaluating long-term fiscal models to integrate the impact of the 10% global baseline and pending actions under other trade authorities.

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