What To Consider If the IEEPA Tariffs Are Overturned by the Supreme Court

What needs to be considered if the U.S. Supreme Court finds that the IEEPA tariffs are unlawful and how can that impact your U.S. Customs Bond.

Back in November, the U.S. Supreme Court heard oral arguments over President Trump’s authority to implement tariffs without Congressional approval. There tariffs have been referred to as the IEEPA tariffs since they were put in place during the first half of 2025 due to the fact that the President imposed them under the International Emergency Economic Powers Act (IEEPA).

IEEPA was passed in 1977 and it does not directly mention the word “tariff” nor has it been used to impose tariffs prior to President Trump’s action.

Prior to reaching the Supreme Court, two lower courts had rejected the IEEPA tariffs at earlier stages in the legal process. The U.S. Court of Appeals for the Federal Circuit affirmed a ruling by the Court of International Trade that the President did not have the authority to impose the IEEPA tariffs back in August. The decision was 7 to 4 with the majority of the Federal Circuit stating that tariff authority rests with Congress.

At this time, the international trade community anxiously awaits the Supreme Court’s decision and the potential fallout either way the court decides.

What Happens if the IEEPA Tariffs Are Overturned?

If the Supreme Court rules that the President does not have the authority to impose tariffs without Congressional approval, the IEEPA tariffs that have been in place since February, March, and then April of 2025 will be overturned.

The most immediate result of this scenario will be that all tariff rates imposed under IEEPA will no longer be in effect. This will immediately provide relief for U.S. importers currently paying these increased duty rates.

Does a Decrease in Duties Mean a Decrease in Your U.S. Customs Bond?

While the general answer to this question is ‘yes’, it is important to consider the timing of your bond renewal. U.S. Customs and Border Protection considers a period of the past 365 days from the current date when calculating bond sufficiency. That calculation is done on a rolling basis regardless of what bond the entries were made on. Therefore, if you still have entries within the sufficiency period that had a higher duty rate, you may not be able to decrease your bond until those entries are no longer considered in the calculation.

Furthermore, the best time to decrease or increase the U.S. Customs bond you have on file is at the time of your bond’s renewal. This helps you avoid unnecessary stacking liability which could result in stricter collateral requirements.

A more complicated result of overturning the IEEPA tariffs would be the possibility of a refund being issued for IEEPA tariffs that have been paid up until now. This tantalizing possibility has many U.S. importers doing want they can in order to be eligible for a refund as soon as possible.

In fact, in November and December, many importers filed protective actions at the Court of International Trade (CIT) under 28 U.S.C. § 1581(i) to preserve their ability to obtain refunds of IEEPA duties. These protections were filed in anticipation of a large number of imports becoming finalized by CBP through liquidation and uncertainty about the court’s authority to order refunds through re-liquidation.

In short, many importers fear that they will be unable to receive a refund on duties for entries that have been liquidated. This fear is further exacerbated by the fact that many importers have seen a number of their entries liquidated quicker than the typical 1-year timeline.

Should You Extend the Liquidation of Your Entries?

While extending the liquidation timeline for your entries could better secure your options if refunds become a reality, extending entries can also increase the open liability on your U.S. Customs Bond. For many importers this increased liability can seem less important than receiving a refund, but this can be a much larger issue depending on your company’s situation.

Increased liability can, once again, result in stacking liability with your bond provider which can result in more collateral being required.

How Likely Are Refunds on IEEPA Tariffs?

Since late December, several developments at the Court of International Trade have clarified certain questions about the refund process:

• The Court of International Trade has confirmed their authority to order refunds
  The CIT has confirmed that they have the authority to order refunds through reliquidation if the IEEPA tariffs are ultimately held unlawful
• CBP has clarified their position on refunds
  CBP has repeatedly stated on the record that they will not contest the CIT’s authority to order reliquidation and refunds if the tariffs are invalidated

What Happens if the IEEPA Tariffs Are Upheld?

This scenario is the easiest to imagine since it would mean that things continue to function as they have since the IEEPA tariffs were imposed. These tariffs would continue to be collected and the international trade community would continue to adjust.

Ultimately, a ruling that upholds the President’s right to impose tariffs under IEEPA without Congressional approval would set a precedent that could be concerning for the future of international trade.