SCOTUS Strips Presidential Tariff Power Under IEEPA in Landmark 6-3 Ruling

The U.S. Supreme Court’s 6–3 decision in Learning Resources, Inc. v. Trump (24-1287) represents a definitive judicial check on executive overreach in international trade policy. By ruling that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, the Court has dismantled a primary mechanism used by the administration in 2025 to bypass traditional legislative hurdles. The core of the legal dispute centered on whether IEEPA’s broad grant of authority to 'regulate... importation' included the power to levy duties. The majority concluded it does not, emphasizing that tariff-setting is a core taxing power reserved for Congress under the Constitution. This distinction between regulatory restriction and revenue-generating taxation is a significant win for constitutional originalists and trade traditionalists who have argued against the 'weaponization' of emergency statutes for economic protectionism.

The implications for the RegTech and customs compliance sectors are immediate and profound. Since 2025, the administration had utilized IEEPA to address non-traditional 'national emergencies,' specifically the influx of illegal drugs from Canada, Mexico, and China, as well as broader trade imbalances. By labeling these as 'unusual and extraordinary' threats, the executive branch imposed sweeping, open-ended tariffs that bypassed the procedural safeguards found in other trade statutes like Section 301 or Section 232. The Supreme Court’s invalidation of these measures means that U.S. Customs and Border Protection (CBP) must immediately cease duty collection on any entries tied solely to IEEPA authority. For legal departments, the focus now shifts from compliance to recovery, as the ruling effectively turns billions of dollars in collected duties into potential liabilities for the U.S. Treasury.

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Supreme Court’s 6–3 decision in Learning Resources, Inc.

While the majority opinion did not explicitly outline a refund mechanism, the dissenting opinion by Justice Kavanaugh highlighted the staggering scale of the financial fallout, noting that the ruling may require the government to return billions of dollars. The path to recovery for importers is likely to be paved through the Court of International Trade (CIT), which maintains exclusive jurisdiction over these challenges. A critical precedent was set in December 2025 in the case of AGS Co. Auto. Sols. v. U.S. Customs, where the Department of Justice indicated it would not oppose refunds if the IEEPA tariffs were ultimately found unlawful. If the government adheres to this position, we may see a structured, albeit administratively heavy, refund process. However, companies should be prepared for significant delays given the volume of entries processed since the tariffs were first enacted.

It is equally important for trade professionals to recognize what this ruling does not change. The Supreme Court was careful to distinguish IEEPA from other established tariff authorities. Measures taken under Section 232 of the Trade Expansion Act (national security), Section 201 (safeguards), and Section 301 (unfair trade practices) remain fully intact. Consequently, existing duties on sensitive commodities such as steel, aluminum, and semiconductors are unaffected. This creates a bifurcated landscape where importers must meticulously audit their customs records to differentiate between valid statutory tariffs and the now-invalidated IEEPA duties. The Hunton Tariff Tracker and similar RegTech tools will be essential for identifying specific product codes that qualify for administrative claims.

Looking forward, this ruling will likely force a shift in how future administrations approach trade-based national emergencies. Without the 'blank check' of IEEPA-based tariffs, the executive branch must return to Congress for explicit delegations of taxing authority or rely on more targeted, sector-specific statutes that include defined limits and sunset clauses. For the legal community, the next 12 to 18 months will be defined by a surge in CIT litigation and administrative protests as the industry seeks to reclaim capital tied up in these unconstitutional measures. This decision serves as a reminder that even in an era of expanded executive power, the fundamental constitutional division of the 'purse' and the 'sword' remains a potent legal barrier.