Last updated: January 23
The Supreme Court of the United States is reviewing whether tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were legally authorized.
For importers, the outcome could affect duty exposure, compliance planning, and potential recovery options — though timing and implementation will matter.
This page serves as a living resource for importers, explaining what the case is about, what different outcomes could mean, and what practical steps merchants should consider as the situation unfolds.
We’ll continue updating this guide as the Court issues its decision and as implementation details become clearer.
What Are the IEEPA Tariffs?
IEEPA is a U.S. law that grants the President sweeping economic authority to address foreign threats, traditionally through sanctions and asset freezes. However, recent use of the law to levy nationwide tariffs has triggered a constitutional showdown. At issue is whether IEEPA’s power to “regulate” imports authorizes the President to set duties—a role the Constitution specifically reserves for Congress. With billions in potential refunds at stake, the Supreme Court’s pending decision will define the future of executive trade power.
Why Is the Supreme Court Reviewing These Tariffs?
Importers challenged the IEEPA tariffs in court, arguing that:
- IEEPA does not explicitly authorize tariffs
- The executive branch exceeded its statutory authority.
Lower courts have already ruled the IEEPA tariffs unlawful, agreeing with importers that IEEPA is a sanctions tool—not a mechanism for imposing import duties. In V.O.S. Selections v. Trump, the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit both found that the government lacked authority to impose these tariffs.
The administration appealed to the Supreme Court of the United States, where a decision expected this week could determine whether future tariffs can be imposed under emergency powers—and whether billions in duties may be at stake for importers.
Possible Outcomes of the IEEPA Tariff Case
The “Plan B” Contingency
The 10% Baseline Backup Importers should not assume a Supreme Court ruling against IEEPA tariffs will result in immediate duty relief. National Economic Council Director Kevin Hassett recently confirmed that the administration is prepared to pivot to a 10% baseline tariff if the Supreme Court strikes down current measures. This tariff would be implemented under Section 122 of the Trade Act of 1974 instead of IEEPA. Sec 122 allows presidents to impose tariffs of up to 15% for up to 150 days to resolve trade imbalances.
This “backup plan” indicates the administration’s intent to maintain a high-tariff environment regardless of judicial outcomes, likely utilizing alternative legal authorities or new executive orders to bridge the gap.
If the Court Rules the IEEPA Tariffs Unlawful
If the Court upholds the lower court rulings:
- Tariffs imposed under IEEPA may be invalidated
- Duty treatment on affected imports could change
- Importers may have refund opportunities, depending on implementation and procedural requirements
A court ruling alone does not automatically result in refunds or immediate changes at the border. Government agencies would still need to issue guidance on timing, enforcement, and process.
If the Court Upholds the Tariffs
If the Court finds the tariffs lawful:
- Existing duty treatment would remain in place
- Importers would continue operating under current compliance frameworks
- Legal uncertainty around IEEPA authority is reduced
Trade policy risk, however, would remain a long-term consideration for importers.
What if the Administration Tries to Reinstate the Tariffs?
Even if the Supreme Court rules the IEEPA tariffs unlawful, that may not be the end of the story.
Merchants should be aware that even if the IEEPA tariffs are struck down, the administration has signaled a move toward alternative legal “anchors” to maintain the current tariff regime. While the scope, timing, and durability of any such actions remain uncertain, this possibility reinforces the need for importers to plan beyond a single court decision.
For merchants, this means:
- Expecting continued trade policy volatility, even after the ruling
- Monitoring how alternative tariff authorities could affect specific products or countries
- Maintaining ongoing visibility into tariff exposure and regulatory developments
Importers should treat the Court’s decision as an important inflection point — not necessarily a permanent resolution — and continue tracking trade policy changes closely, including through tools like Passport’s Trump Trade Tracker.
What Importers Should Do Now
Importers should prepare for both outcomes.
Recommended steps include:
- Identifying products and entries subject to IEEPA-based tariffs
- Quantifying duties paid by product, country, and time period
- Ensuring entry documentation and broker records are complete
- Reviewing protest and post-summary correction timelines
- Modeling financial and cash-flow impacts under different scenarios
- Don’t bank on a court win: Prepare your financial modeling for a “Plan B” scenario where current IEEPA tariffs are replaced by a 10% baseline duty rather than being eliminated entirely.
Being prepared allows importers to respond quickly once implementation guidance is issued.
Importers should also plan for continued trade policy uncertainty by maintaining visibility into how tariff actions may affect their products, including monitoring developments through Passport’s Trump Trade Tracker.
Geopolitical Leverage & The “Greenland 8”
The Greenland Case Study: Recent events involving Denmark and other European allies demonstrate how quickly tariff threats can appear and disappear based on geopolitical negotiations.
- The Threat: A 10% tariff was initially proposed for goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland.
- The Resolution: Following a meeting with NATO Secretary General Mark Rutte, the President announced a “framework for a future deal” regarding the Arctic region, resulting in the immediate withdrawal of these specific tariff threats.
Importer Takeaway: The “Greenland 8” episode proves that tariffs are increasingly being used as diplomatic leverage. For merchants, this means supply chain planning must now account for sudden geopolitical shifts that can impact landed costs with almost no notice.
How Passport Supports Importers
Passport helps merchants navigate trade and compliance changes with clarity and operational readiness. As this situation evolves, we’ll continue to provide practical guidance focused on duty exposure, compliance processes, and merchant impact.
FAQs
Will tariffs end immediately if they are ruled unlawful?
Not necessarily. Implementation depends on agency guidance and enforcement timelines.
Will importers automatically receive refunds?
No. Refunds are not automatic and may require affirmative action, depending on how the ruling is applied.
What is IEEPA?
IEEPA is a U.S. law that allows the president to respond to national emergencies involving foreign threats, historically through sanctions and asset controls.
Did IEEPA authorize tariffs?
Lower courts ruled that it did not. The Supreme Court is reviewing that question.
Does this decision affect all U.S. tariffs?
No. It applies only to tariffs imposed under IEEPA authority.
What should importers do right now?
Importers should inventory exposure, organize records, review procedural options, and prepare financially for different outcomes.
Authored by Thomas Taggart
Head of Global Trade | Passport
Thomas Taggart is a cross-border commerce leader with more than 20 years of experience in international shipping and regulatory affairs. As the Head of Global Trade, Thomas helps ecommerce brands go global by simplifying international trade, tax, and product compliance issues. Prior to Passport, he brought international shipping solutions to market through multiple roles in UPS’s product development organization.