US Tariff Rulings: What International Businesses Need to Know

Two landmark US tariff rulings in early‑to‑mid 2026 have fundamentally altered the legal landscape for cross‑border trade, and understanding these US tariff rulings is something international businesses need to prioritise immediately. On 20 February 2026 the Supreme Court delivered its opinion in Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act (IEEPA) does not authorise the broad imposition of tariffs on imported goods. Then, in May 2026, the US Court of International Trade (CIT) ruled that certain tariffs imposed under Section 122 of the Trade Act of 1974 were unlawful, but the resulting injunction applies only to the named plaintiffs — the State of Washington, Burlap and Barrel, Inc., and Basic Fun, Inc. — and does not provide automatic refunds to all importers.“.

Together, these decisions create refund exposures potentially running into the hundreds of billions of dollars, compliance review obligations, and an urgent need to reprice supply‑chain risk across virtually every sector that imports goods into the United States.

Introduction and Key Takeaways

For general counsel, CFOs, import managers, and non‑US suppliers, the immediate priorities are threefold:

• Audit exposure now. Identify every shipment that entered the US under IEEPA‑ or Section 122‑based tariffs, pull entry summaries, and quantify duties paid.
• Preserve refund rights. Administrative protest deadlines at US Customs and Border Protection (CBP) are time‑limited. Failing to file in time forfeits recovery.
• Review contracts and pricing. International suppliers and their US buyers should reassess indemnity clauses, tariff‑adjustment mechanisms, and allocation of refund proceeds.

This guide walks through both rulings, maps every available remedy, and provides a 30/90/180‑day action checklist for legal and commercial teams on both sides of the border. Every factual claim below is anchored to the primary source, the Supreme Court opinion, CBP’s IEEPA FAQ, and practitioner analyses of the CIT decisions, so teams can verify and act with confidence.

The Supreme Court IEEPA Ruling 2026: A Defining Shift in US Tariff Law

The IEEPA ruling 2026 represents the most consequential judicial check on executive tariff authority in decades. The Supreme Court’s opinion in Learning Resources, Inc. v. Trump, issued 20 February 2026, struck down tariffs that had been imposed by executive order under IEEPA, reshaping the legal basis on which hundreds of billions of dollars in duties had been collected.

Case and Decision: Learning Resources, Inc. v. Trump

The central question presented was whether IEEPA authorises the President to impose tariffs on imported goods as a response to a declared national emergency. The Court answered in the negative. Writing for the majority, the Court held that IEEPA’s text, which grants power to “regulate” and “prohibit” certain international economic transactions, does not extend to the imposition of customs duties, a power the Constitution reserves to Congress under Article I.

The case was brought by a coalition of US importers, led by Learning Resources, Inc., who had paid substantial duties on goods from multiple countries under executive orders citing IEEPA as their sole statutory authority. The importers argued that tariff‑setting falls outside the economic‑transaction powers that IEEPA delegates. The government defended the tariffs as a permissible exercise of emergency economic powers.

The Court sided with the importers. As Thomson Reuters analysis notes, the opinion draws a clear line between financial‑transaction controls (asset freezes, payment blocking, sanctions) that IEEPA does authorise and the imposition of duties on physical imports, which requires separate congressional authority such as that found in the Trade Act of 1974, Section 301 of the Trade Act, or the Tariff Act of 1930.

Legal Reasoning and Limits on Executive Tariff Power

The Court’s reasoning rested on three pillars:

• Textual analysis. IEEPA speaks of regulating “transactions” and “transfers” involving foreign interests, language historically understood to cover financial flows, not the levying of border duties.
• Structural context. Congress has enacted multiple, narrowly tailored statutes that specifically authorise tariffs (Sections 201, 232, 301, and 122 of various trade acts). The existence of these provisions would be superfluous if IEEPA already conferred blanket tariff authority.
• Non‑delegation concerns. While the Court did not invalidate IEEPA itself, it emphasised that reading the statute to permit tariffs would grant the executive virtually unchecked power over trade policy, an interpretation inconsistent with the constitutional allocation of the taxing power to Congress.

The Brookings Institution commentary observes that the ruling effectively eliminates IEEPA as a standalone vehicle for tariff policy, forcing any future executive action onto the narrower, procedurally constrained authorities that Congress has specifically delegated.

Immediate Consequences for Existing Tariff Orders

The practical fallout is significant and immediate:

• Tariffs imposed solely under IEEPA are void. Any duty order that cited IEEPA as its exclusive legal basis is now without statutory foundation. Goods that entered the US under those orders were, in the Court’s view, subjected to unlawful duties.
• Refund exposure is enormous. Industry observers expect that importers who paid IEEPA‑based duties may seek refunds running into tens, potentially hundreds, of billions of dollars.
• Ongoing collections must cease. CBP is expected to update liquidation instructions so that IEEPA‑only tariffs are no longer assessed on new entries, though transitional guidance is still being issued.
• Tariffs with alternative statutory bases survive. Duties that were imposed under Section 301, Section 232, or other congressionally delegated authorities are unaffected by the IEEPA ruling, even if an IEEPA citation appeared alongside another basis.

International suppliers that absorbed price concessions or lost market share because of IEEPA tariffs now face a changed competitive environment. Early indications suggest that businesses on both sides of the supply chain are already repricing, but the refund mechanics and litigation timelines will determine how quickly value flows back.

Section 122 Tariffs Ruling (May 2026): The Trade Court Strikes Again

Just months after the Supreme Court’s IEEPA decision, the US Court of International Trade delivered another blow to executive tariff authority. In a 2‑to‑1 ruling issued in May 2026, the CIT found that tariffs imposed under Section 122 of the Trade Act of 1974 exceeded the statute’s limits and were therefore unlawful.

Section 122 grants the President narrow authority to impose temporary import surcharges, capped at 15 per cent and limited to 150 days, to address large and serious balance‑of‑payments deficits. The executive had invoked Section 122 to impose a 10 per cent baseline tariff on goods from virtually all trading partners, characterising the trade deficit as a balance‑of‑payments emergency.

The CIT rejected this characterisation. As Ward & Smith’s analysis explains, the court found that the tariffs exceeded Section 122’s statutory caps and durational limits, and that the factual predicate for a balance‑of‑payments emergency had not been established. The EACCNY practitioner summary further notes that the ruling opens a pathway for refund claims by importers who paid the unlawful surcharges.

Practical Effects of the Section 122 Tariffs Ruling for International Businesses

The Section 122 tariffs ruling May 2026 has several immediate consequences:

• Scope. Because the tariff applied to goods from nearly all countries, the pool of affected importers is broad, spanning consumer electronics, apparel, industrial components, agricultural inputs, and more.
• Refund mechanics. Holland & Knight’s analysis indicates that the CIT ordered refunds for the named plaintiffs only; it declined to issue a nationwide refund mechanism, though other importers may still pursue individual claims, and may seek a stay.
• Interaction with IEEPA ruling. Some goods were subject to both IEEPA‑based and Section 122 tariffs. Importers must map each entry to the correct statutory authority to determine which refund route applies.
• Appeal risk. The ruling is a 2‑to‑1 CIT decision, not a Supreme Court mandate. Industry observers expect the government to appeal, meaning that final resolution could take 12–24 months. Businesses should preserve claims now but plan for protracted proceedings.

International Trade Remedies: Recovery Pathways That Businesses Need to Understand

With two major rulings undermining broad tariff authorities, the question for every affected business is: how do we recover the duties we overpaid? The tariff refunds procedure differs depending on whether businesses pursue administrative or judicial routes.

Administrative Routes: Filing a Customs Refund Claim with CBP

The fastest initial step is through CBP’s administrative process. The key mechanisms are:

1. Identify affected entries. Pull all entry summaries (CBP Form 7501) for shipments that entered under IEEPA or Section 122 tariff headings. Cross‑reference HTS codes and duty amounts paid.
2. File a protest under 19 U.S.C. §1514. For liquidated entries, the importer of record must file a formal protest within 180 days of liquidation. The protest should cite the Supreme Court’s holding in Learning Resources or the CIT’s Section 122 ruling as the legal basis.
3. Request reliquidation. For entries not yet liquidated, request that CBP suspend liquidation pending updated instructions, or reliquidate at the correct (lower or zero) duty rate.
4. Reconciliation entries. If the importer used CBP’s reconciliation programme, flag affected entries for adjustment at reconciliation.
5. Document everything. Assemble commercial invoices, packing lists, bills of lading, proof of duty payment, and any CBP correspondence (CF28/CF29 requests and responses).

Court of International Trade Refunds: The Litigation Route

Where administrative remedies are denied or insufficient, importers may file suit in the US Court of International Trade. Key considerations include:

• Standing. The importer of record is the primary party with standing. Consignees, customs brokers, or foreign suppliers generally cannot sue directly but may benefit through contractual refund‑sharing arrangements with the importer.
• Nationwide relief. The CIT declined to issue nationwide injunctive relief in the Section 122 proceedings, limiting its permanent injunction to the three named plaintiffs.
• Class or collective actions. Industry observers expect that trade associations and importer coalitions will pursue consolidated actions to reduce per‑claimant costs.
• Exhaustion. In most cases, an importer must first exhaust CBP administrative remedies (file and have a protest denied) before the CIT will accept jurisdiction.

Comparison of Remedy Pathways

Practical Checklist: Documentation International Businesses Need for Refund Claims

• Entry summaries (CBP Form 7501) for all affected shipments
• Commercial invoices matched to each entry
• HTS classification records and any binding rulings
• Proof of duty payment (bank records, ACH confirmations, periodic monthly statements)
• CBP correspondence, CF28/CF29 requests and responses
• Broker records and power‑of‑attorney documentation
• Export documentation from non‑US supplier (bills of lading, certificates of origin, packing lists)

Importers Tariff Compliance: What Importers and Non‑US Suppliers Must Do Now

The rulings do not suspend all compliance obligations, they change them. Importers must reassess their tariff classification, valuation, and reasonable‑care posture in light of the new legal landscape. CBP’s rulings and legal decisions page remains the reference point for binding classification guidance.

Key compliance steps include:

• HTS classification audit. Review every active HTS code to confirm whether the tariff line included an IEEPA or Section 122 surcharge component. Reclassify entries where the surcharge no longer applies.
• Valuation review. If tariff costs were factored into transaction values or transfer prices, recalculate declared values to avoid overstating (or understating) dutiable value going forward.
• Reasonable care reassessment. CBP expects importers to exercise “reasonable care” in all customs transactions. Failing to adjust classifications or file protests after a ruling that clearly changes duty liability could itself be viewed as a compliance failure.
• Bonded warehouse and FTZ inventory. Goo
• ds still in bonded warehouses or Foreign Trade Zones that have not yet been entered for consumption may benefit from entry at the corrected (lower) duty rate.

Customs Disclosure and Voluntary Self‑Disclosure Risk Management

If an internal audit reveals that entries were incorrectly classified or that duties were miscalculated, either overpaid or underpaid, importers should consider a prior disclosure to CBP. A voluntary self‑disclosure can mitigate penalty exposure significantly. However, the calculus is nuanced: disclosing an overpayment is straightforward, but revealing classification errors that might imply underpayment on other lines requires careful legal analysis before submission. Engage US customs counsel before filing any disclosure.

Commercial and International Contract Implications of US Tariff Rulings

For non‑US suppliers, distributors, and their international commercial law advisors, these rulings demand an immediate review of cross‑border contract terms. As BDO’s guidance for international companies highlights, tariff volatility has made static pricing models untenable, contracts must now build in adjustment mechanisms.

Priority areas include:

• Tariff adjustment clauses. Contracts should specify how price changes triggered by tariff rulings are allocated, who bears the cost of new duties, and who receives the benefit of refunds.
• Refund‑sharing provisions. Since only the importer of record can typically claim a CBP refund, non‑US suppliers who absorbed tariff‑driven price cuts need contractual mechanisms to share in any recovery.
• Force majeure and hardship. Evaluate whether existing force majeure or hardship clauses capture tariff changes. Many do not, explicit tariff‑event language is increasingly standard.
• Indemnity and hold‑harmless. Clarify which party indemnifies the other for duties wrongly paid or penalties arising from compliance failures.

Sample Clause Language and Negotiation Priorities

• Tariff pass‑through: “Any increase or decrease in applicable customs duties occurring after the effective date shall be reflected in a corresponding price adjustment within [30] days of the change taking effect.”
• Refund sharing: “In the event Buyer obtains a refund of duties previously paid, Buyer shall remit to Seller [X]% of the net refund amount within [30] days of receipt, to the extent Seller absorbed the original tariff cost through a price reduction.”
• Regulatory change trigger: “Either party may request renegotiation of pricing terms within [15] days of any judicial ruling, legislative enactment, or regulatory change materially altering the customs duty rate applicable to the Goods.”

Timeline and Next Steps: 30 / 90 / 180‑Day Checklist

Within 30 days:

1. Complete an entry‑level audit identifying all shipments subject to IEEPA or Section 122 duties.
2. Engage US customs counsel to assess protest deadlines and litigation options.
3. Notify non‑US suppliers and request supporting export documentation.

Within 90 days:

1. File CBP protests for all eligible liquidated entries.
2. Review and amend commercial contracts with tariff‑adjustment and refund‑sharing clauses.
3. Evaluate whether to join or initiate CIT litigation (individually or as part of a class).

Within 180 days:

1. Monitor appellate developments, especially the government’s expected appeal of the Section 122 CIT ruling.
2. Recalculate transfer pricing and customs valuations to reflect the corrected duty landscape.
3. Update internal compliance manuals and training to incorporate post‑ruling requirements.

Conclusion: Acting on the US Tariff Rulings International Businesses Need to Address

The February and May 2026 rulings have created both risk and opportunity. Businesses that move quickly to audit their exposure, file timely claims, and restructure their commercial arrangements will recover value and reduce ongoing compliance risk. Those that wait may forfeit refund rights or face penalties for failing to adjust to the new legal environment.

The stakes are high and the procedural landscape is complex. Importers, exporters, and their international advisors should work with qualified US trade and customs counsel to navigate the administrative and litigation pathways described above. To connect with a specialist, find a GLE international trade lawyer through the Global Law Experts directory.

Sources

1. U.S. Supreme Court, Learning Resources, Inc. v. Trump (Feb 20, 2026)
2. U.S. Customs and Border Protection, IEEPA FAQ
3. U.S. Customs and Border Protection, Rulings and Legal Decisions
4. Ward & Smith, Court of International Trade Rejects Section 122 Tariff
5. EACCNY, U.S. Court of International Trade Rules Section 122 Tariffs Unlawful
6. Holland & Knight, Court of International Trade Orders Nationwide Tariff Refunds
7. Thomson Reuters, Supreme Court Tariff Ruling: What Corporate Tax and Trade Teams Need to Know
8. Brookings Institution, Experts on the Supreme Court’s Tariff Decision
9. BDO, Navigating U.S. Tax and Regulatory Requirements: A Guide for International Companies
10. Congress.gov, CRS Briefing: International Trade Agreements and U.S. Tariff Laws