In brief
What happened: The United States Supreme Court held in a split 6-3 decision that the International Emergency Economic Powers Act (IEEPA) (USA) does not authorise the President to impose tariffs. The Court emphasised that tariffs are an exercise of Congress’s taxing power and that IEEPA’s authority to 'regulate' imports does not extend to levying duties. This invalidates tariffs issued under IEEPA (e.g. the recent 'IEEPA tariffs').
Addendum (9 March 2026): Following the Supreme Court’s decision, the United States Court of International Trade (CIT) has issued a nationwide refund order directing US Customs and Border Protection (CBP) to liquidate and/or reliquidate entries without regard to IEEPA duties. The Court confirmed that all importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Supreme Court’s ruling, not only those that filed suit. This alert has been updated for this latest development.
What’s not affected: Section 232 tariffs (steel/aluminum, automotive/automotive parts, and other national‑security measures) and Section 301 tariffs (e.g. China actions) remain in force and recent agency actions under those statutes continue.
New measures: The Administration terminated the IEEPA tariffs and announced a temporary global import duty - the current proclamation provides for a 10% tariff. By statute, Section 122 surcharges are capped at 15% and limited to 150 days absent congressional extension
De minimis: The de minimis exemption continues to be suspended, albeit Executive Order 14324 has been varied to apply duty at the ad valorem rate announced pursuant to section 122 of the Trade Act given the initial rates applied to low value consignments referenced the now unlawful IEEPA tariffs. Courier shipments must move to standard border clearance processes with relevant duties payable based on origin and tariff classification).
Why this matters: If your business paid IEEPA tariffs, you may be entitled to refunds (with interest).
The CIT ordered CBP to (i) liquidate all unliquidated entries without IEEPA duties, and (ii) reliquidate entries that have liquidated but are not yet final, again without IEEPA duties. CBP has indicated that refunds will be processed administratively through a new refund module within Automated Commercial Environment (ACE) called the Consolidated Administration and Processing of Entries (CAPE) system — which will be rolled out in phases. Importers should be aware that not all entries will be eligible for immediate processing, and that administrative status (liquidation, reliquidation windows, AD/CVD exposure, and electronic payment readiness) will materially affect refund outcomes. Refunds will be processed and accepted in a phased approach, discussed further below. Interest is expected to accrue on refunds consistent with US customs law.
In detail
The Supreme Court Decision in Learning Resources, Inc. V. Trump
In Learning Resources, Inc. v. Trump, the Supreme Court held that IEEPA does not authorise the President to impose tariffs. The Court underscored that Article I, Section 8 of the US Constitution vests the tariff/taxing power in Congress and IEEPA’s grant to 'regulate… importation' does not include the power to levy duties.
Congress has historically delegated tariff authority in express, bounded terms (e.g. Sections 232 and 301). Reading IEEPA to permit tariff‑making would be a 'transformative expansion' of executive power that Congress did not authorise; in IEEPA’s 50‑year history, it had not been used to impose tariffs.
The ruling reaches tariffs imposed under IEEPA. The Court did not delineate all aspects of IEEPA’s import‑regulation power but made clear it does not extend to duties. The Supreme Court did not rule on refund entitlement - however, we anticipate that importers will pursue refunds via administrative (through US Customs and Border protection (CBP)) and court‑ordered paths (through a decision of a lower court, such as the Court of International Trade (CIT)).
Refunding IEEPA duties following The Court of International Trade Decision in Atmus Filtration, Inc v. United States
On 4 March 2026, Judge Richard K. Eaton of the CIT ordered CBP to refund IEEPA duties by liquidating unliquidated entries and reliquidating entries that are liquidated but not final, without regard to IEEPA duties. The Court held that the CIT’s nationwide jurisdiction permits this relief notwithstanding the Supreme Court’s limitations on universal injunctions in other contexts. The order applies to all importers of record whose entries were subject to IEEPA duties.
The CIT order does not expressly resolve treatment of entries that are fully final (i.e., outside the 180‑day protest window). Importers with older, fully‑final entries should assess whether protective protests or CIT actions are required to preserve refund rights.
In court filings and public messaging, CBP has confirmed it has stopped collecting IEEPA duties and is developing Automated Commercial Environment (ACE) functionality to process refunds and interest on an importer‑basis. CBP has cautioned that refunds will require validation against other applicable duties (e.g. Sections 232/301, AD/CVD) and that timing will depend on systems readiness.
Alternative tariff basis used to impose temporary 10% import duty
Following the decision, the White House issued a proclamation imposing a temporary 10% ad valorem import duty under Section 122 of the Trade Act of 1974, effective 24 February 2026 at 12:01 a.m. EST, for a period of 150 days. Section 122 authorises the President to apply surcharges of up to 15% for a maximum of 150 days to address 'fundamental international payments problems,' and the measures expire unless Congress votes to extend them. The authority requires only a presidential determination and must be applied uniformly, rather than targeting specific countries. The administration framed the action around the current account and balance-of-payments deficits, while signaling the surcharge would lapse in late July 2026 absent congressional extension.
The proclamation includes broad carve-outs. Goods subject to Section 232 actions (see below) are excluded to the extent those duties apply; United States-Mexico-Canada Agreement (USMCA)-compliant goods of Canada and Mexico are exempt; and textiles and apparel that enter duty-free under Dominican Republic-Central Americal Free Trade Agreement (CAFTA-DR) (covering Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua) are also excluded. Additional exemptions cover certain aerospace products, pharmaceuticals and ingredients, specified electronics, passenger vehicles and certain trucks and buses (and related parts), critical minerals and energy products, some agricultural items, and informational materials (noting some of these commodities are subject to ongoing section 232 investigations).
Industry/commodity specific tariffs
Section 232 of the Trade Expansion Act 1963 authorises the President to take action (including duties and/or quotas) if The Department of Commerce finds that importers threaten to impair US national security. As such, measures introduced under section 232 are not impacted by the recent Supreme Court decision. Section 232 tariffs currently cover:
- Steel, aluminum, and a broad range of downstream 'derivative' products — generally at 50% since June 2025 (UK products are subject to 25%, with a planned tariff‑rate quota to exempt certain UK volumes), after the March 2025 revocation of prior country exemptions and General Approved Exclusions (GAEs); for most derivatives, the duty applies only to the value of the steel/aluminum content
- Automobiles and automobile parts — 25% on vehicles from 3 April 2025 and on specified parts by 3 May 2025; for USMCA‑qualifying vehicles, importers may apply the 25% only to non‑US content if approved; parts that qualify under USMCA are temporarily exempt until the Department of Commerce finalises a process to assess the tariff on non‑US content; subsequent White House amendments created duty‑offset mechanics linked to US assembly, and
- Copper—following a March 2025 investigation, the President imposed a 50% tariff (effective August 2025) on semi‑finished copper products and copper‑intensive derivative products
In addition to existing section 232 measures, active Section 232 investigations (most launched in 2025) include: timber and lumber; pharmaceuticals and pharmaceutical ingredients; semiconductors and semiconductor manufacturing equipment (including downstream electronics); processed critical minerals and derivative products (including rare earths and products incorporating them); medium‑ and heavy‑duty trucks and their parts; commercial aircraft and jet engines (and parts); polysilicon and derivatives; unmanned aircraft systems (UAS) and components; wind turbines; and robotics and industrial machinery. Under the relevant legislation, the Department of Commerce has up to 270 days from initiation to report to the President.
Tariffs targeting ‘unfair trade practices’ (applying to Chinese goods)
Existing tariffs imposed under Section 301 of the Trade Act 1974 are not impacted by the Supreme Court decision and remain in force, including long‑standing duties on Chinese goods, ranging from 7.5% to as high as 100% on certain products.
Furthermore, in addition to its pivot towards a temporary global surcharge under Section 122, the Trump the administration has directed United States Trade Representative (USTR) to launch additional Section 301 investigations — on an 'accelerated timeframe'—into a broad set of issues (e.g. industrial excess capacity, forced labor, pharmaceutical pricing, discrimination against US technology and digital services, digital services taxes, ocean pollution, and practices in seafood and rice), with tariffs among the potential remedies.
By statute and practice, Section 301 requires USTR to investigate whether foreign acts, policies, or practices are 'unjustifiable,' 'unreasonable,' or 'discriminatory' and burden or restrict U.S. commerce - the process typically involves fact‑finding, public comments and hearings, and a determination before remedies are imposed. Unlike Section 122, Section 301 remedies have no fixed rate cap and can be tailored by product or country, though they must be supported by the evidentiary record and are generally calibrated to the burden identified. In practical terms, this means Section 122 functions as a short‑term bridge while Section 301 provides the administration’s main pathway for longer‑lived, targeted tariff actions in the coming months.
De minimis suspension continues, under a new Executive Order
A separate executive order continued the suspension of duty-free de minimis treatment has been signed, so low-value shipments are likewise subject to the surcharge (which remains at the scheduled rate of 10% from 24 February 2026 until a legal instrument is signed, and CBP issues enforcement guidance).
For parcels entering the US through the international postal network, it is important to note that the new Executive Order:
- continues the suspension of duty-free de minimis treatment for all shipments, regardless of their value, country of origin or mode of transportation;
- continues the qualified party duty collection process which has been in place since August 2025;
- resets the duty rate for international postal shipments to the 10% Section 122 rate, replacing the IEEPA-rates;
- requires that postal items subject to antidumping/countervailing duties or quotas must still be entered in the Automated Commercial Environment (ACE) system using the appropriate entry type, and
- confirms that CBP has the systems in place to collect these duties (this is distinguished from the messaging following the initial announcement relating to the suspension of the de minimis exemption in 2025, and signals that there will be no similar pause to these measures).
Entries eligible for tariff refunds (initial rollout)
Whilst CAPE is the mechanism through which importers will request IEEPA duty refunds, an initial rollout referred to as CAPE Phase 1 will be limited to
- unliquidated, or
- within the 90‑day voluntary reliquidation period
The following transactions will not be processed as part of the initial rollout, but may be refunded at later phases of CAPE:
- Flagged for reconciliation
- Associated with drawback claims
- Covered by an open protest
- Not filed in ACE or without a liquidation status in ACE
- Subject to certain pending AD/CVD liquidation instructions
CBP may take up to 45 days to review and liquidate entries submitted through a CAPE declaration.
Practical actions for business to take now
Preserve potential IEEPA refunds (time-sensitive)
- Build a preliminary claims calendar by entry status and deadlines, having regard to:
- Post-summary corrections (PSCs) for unliquidated entries (generally within 300 days of entry and at least 15 days before scheduled liquidation.
- Protests for liquidated entries: file within 180 days of liquidation; interest may be available on protest-based refunds under customs law.
- Voluntary reliquidation: CBP may reliquidate within 90 days of liquidation to correct legal errors—consider requesting where appropriate.
- Note typical liquidation timing to prioritise entries (many entries liquidate around day 314 absent an extension).
- Maintain clean separation of IEEPA-only amounts from other tariffs (Sections 232/301) to prevent overclaims.
- Monitor for (any) refund instructions - The Supreme Court did not prescribe refund mechanics; expect CBP/CIT to outline the process through administrative guidance and/or further litigation.
Data, documentation, and audit readiness
- Build an audit-ready claim file for each entry, including tariff classifications used (in order to report information required to determine the IEEPA tariff liability, proof of payment, evidence to support any amendments and protest filings, etc.
- Consider the accuracy of broader data elements filed in each entry which will be included in a refund claim, including the tariff classification of the goods, the country of origin and values declared, and whether the correct Chapter 99 number was applied.
- PwC Australia is able to accelerate this process by obtaining your entry lodgments from ACE and utilising our Trade Analytics Platform.
- Ensure enrolment in CBP’s ACE Portal and that Automated Clearing House (ACH) refund authorisation is in place, as CBP has indicated refunds will be issued electronically.
Commercial and contracting hygiene
- Review pass‑through and duty adjustment clauses; set protocols for refund allocation (seller vs. buyer) and invoice corrections or credit memos (if any when refunds materialise).
- Update landed‑cost models to remove IEEPA layers while retaining section 232/301 and any new surcharges.
- In many instances, importers/counterparties have quarantined additional duties attributable to IEEPA tariffs. This information should be reviewed to ensure accuracy.
Monitor and manage replacement measures and ongoing regimes
- Section 122 (Trade Act of 1974): Administration announced a 15% global tariff; statute caps at 15% for up to 150 days unless extended by Congress. Track scope/effective dates and eligibility for any exclusions or exceptions.
- Section 301: Expect new investigations that could lead to additional, longer‑term tariffs; prior litigation has upheld some existing 301 measures on China (Lists 3/4A). Engage in comment windows early.
- Section 232: Existing measures remain; continue to pursue exclusions and watch for new national security actions.
- Brief CFO, tax, legal, sales, and supply chain on (a) IEEPA-only nature of the ruling and expected refund timelines, and (b) near‑term exposure under Section 122 and potential 301/232 actions.
- Prepare internal/external FAQs clarifying what changes now (IEEPA removal and refund pursuit) vs. what remains (section 232/301; new measures).
Contact us
Paul Cornick
Partner, Global Trade, PwC Australia
Gary Dutton
Partner, National Global Trade Leader, PwC Australia
Frances Ryan
Director, Global Trade, PwC Australia
Sarah Macchiavelli
Director, Global Trade, PwC Australia
Melissa Camilleri
Director, Global Trade, PwC Australia
Lara Jobling
Director, Global Trade, PwC Australia
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