The U.S. Supreme Court on Friday struck down most of the tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act of 1977 (IEEPA). But questions remain for importers and others affected by the IEEPA tariffs:

• How and when will importers receive refunds of IEEPA duties already paid?
• What will be the impact of the new tariffs announced Friday by the Trump administration?
• What is the status of the trade agreements negotiated with certain trading partners in response to the IEEPA tariffs?

Entry Status Will Drive Refund Strategy

Importers will no longer be required to pay IEEPA tariffs as of midnight Feb. 24. U.S. Customs and Border Protection (CBP) will terminate the collection of the additional ad valorem duties imposed pursuant to the IEEPA and all Harmonized Tariff Schedule of the United States (HTSUS) numbers applicable to the IEEPA tariffs will be inactive in CBP’s Automated Commercial Environment system.

Notably, last Friday’s decision did not address any refund-related issues, including how importers can secure them. How and when importers receive refunds of IEEPA duties most likely will depend on the status of their entries, which importers should be monitoring and documenting. Subject to further guidance from CBP, IEEPA tariffs assessed against unliquidated entries likely will be addressed through the post summary correction process, which offers the most direct administrative pathway for IEEPA-related refunds.

Liquidated entries may be subject to administrative protest under CBP regulations within 180 days after the date of liquidation. Affected importers should prepare to protest any IEPPA duties assessed against those entries. Some doubt exists, however, whether the assessment of IEEPA duties is in fact a protestable matter. Regardless, an accounting of all such liquidated entries should be maintained and, if the 180-day deadline approaches, a protest should be filed to ensure any protestable rights are preserved.

As for litigation, the Court of International Trade (CIT) appears to be the appropriate venue for challenging the IEEPA tariffs under its 28 U.S.C. § 1581(i) jurisdiction. However, it remains unclear whether an action at the CIT will be required to recover unauthorized IEEPA tariffs. An administrative stay had been issued for all current IEEPA-related cases pending the Supreme Court decision, so it will be important to monitor those cases as the stay is lifted.

The same factors determining how and when refunds will be received – total exposure to tariffs, entry status, time remaining in protest window – will drive the decision whether to join the litigation pending at the CIT. For now, filing a complaint at the CIT appears to be cost-effective insurance to preserve all available refunds rights, particularly for entries that have already liquidated or are approaching the 180-day statutory time limitation.

Alternative Tariff Authorities

The Trump administration has already indicated its intent to impose new tariffs under alternative authorities that will almost completely make up for the IEEPA tariffs it will no longer collect. Trump already announced the imposition of 15% temporary duties on all goods imported into the United States, under the authority of Section 122 of the Trade Act of 1974. Those duties take effect Feb. 24 at 12:01 a.m. and will remain in effect for 150 days, the statutory time limit for Section 122 tariffs. These new tariffs will be on top of the current, normal tariffs under the HTSUS. However, certain goods will not be subject to the temporary Section 122 duties, including articles subject to Section 232 actions, USMCA compliant goods under the United States-Mexico-Canada Agreement and certain specified goods such as critical minerals, agricultural products and vehicles.

During this 150-day period, the Trump administration could initiate new investigations under Section 232 of the Trade Expansion Act of 1962 (already the basis for tariffs on machinery, wood products, and other goods), as well as Section 301 of the Tariff Act of 1974, which provides for remedial action against foreign acts or policies that discriminate or restrict U.S. commerce.

While it will have no impact on the availability of IEEPA tariff refunds, it should be noted that a number of U.S. trading partners have already entered into trade agreements – or at least agreed to “frameworks” for such agreements – in response to the IEEPA tariffs imposed on goods from those countries. The status of those agreements is uncertain. The U.S. Trade Representative has indicated the White House expects those countries to stand by their agreements, presumably with respect to their commitments to invest in U.S. industry and infrastructure. However, many of these prior agreements have yet to be ratified by the foreign trade partners, and it is also unclear how these agreements might be affected by the 15% global tariffs announced Friday.

Next Steps

The fallout from the Supreme Court ruling for importers could linger for months or even longer. Importers can minimize risk during this period of tariff uncertainty by working with counsel monitoring all the latest developments. Miles & Stockbridge’s international trade team is ready to assist clients with their tariff-related issues, including assessing the status of entries and creating a strategy to reduce risk and maximize recovery of IEEPA tariff refunds. They also can provide assistance and guidance on filing protests and other administrative remedies, as well as potential litigation strategies.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.