U.S. Supreme Court: Presidential tariffs exceeded legal authority under International Emergency Economic Powers Act (IEEPA)
Appears to apply immediately with retroactive effect
The U.S. Supreme Court today held that tariffs imposed by the president under the International Emergency Economic Powers Act (IEEPA) were not legally authorized.
The case is: Learning Resources, Inc. v. Trump, No. 24-1287 (on writ of certiorari to the U.S. Court of Appeals for the D.C. Circuit), together with Trump v. V.O.S. Selections, Inc., No. 25-250 (on writ of certiorari to the U.S. Court of Appeals for the Federal Circuit) (S. Ct. February 20, 2026). Read the Court’s opinion (revised on February 23, 2026)
Chief Justice Roberts delivered the opinion of the court with respect to Parts I, II–A–1, and II-B, in which Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson joined, and an opinion with respect to Parts II–A–2 and III, in which Justices Gorsuch and Barrett joined. In addition, Justices Gorsuch and Barrett filed concurring opinions, Justice Kagan filed a concurring opinion in which Justices Sotomayor and Jackson joined, and Justice Jackson filed a concurring opinion. Justices Kavanaugh filed a dissenting opinion in which Justices Alito and Thomas joined, and Justice Thomas also filed a separate dissenting opinion.
Summary
The Federal Circuit on August 29, 2025, affirmed the decision of the U.S. Court of International Trade (CIT) issued on May 28, 2025, that five executive orders (EOs) imposing duties on foreign trading partners under IEEPA, in response to national emergencies declared by the president, were not legally authorized . EOs 14193, 14194, and 14195 relate to “Trafficking Tariffs” (i.e., the fentanyl/migration tariffs on China, Canada, and Mexico), while EOs 14257 and 14266 relate to “Reciprocal Tariffs.”
The Federal Circuit agreed with the CIT that Congress, in enacting IEEPA, did not give the president wide-ranging authority to impose tariffs of the nature of the Trafficking and Reciprocal Tariffs simply by the use of the term “regulate . . . importation.” The court found that the government’s interpretation of IEEPA as providing the president power to impose unlimited tariffs runs afoul of the major questions doctrine, which demands clear congressional authorization for decisions of significant economic and political impact.
The Trump Administration filed a petition for a writ of certiorari to the Supreme Court to review the Federal Circuit’s decision, which the Supreme Court today upheld. The Court observed that, as the government conceded, the president enjoys no inherent authority to impose tariffs during peacetime. The Court then concluded that IEEPA, which grants the president the power simply to regulate importation, does not authorize the president to impose tariffs of unlimited amount and duration, on any product from any country. The Court determined that had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes.
KPMG observation
The Supreme Court’s decision appears to apply immediately with retroactive effect, such that taxpayers may be entitled to seek refunds of tariffs already collected. As Justice Kavanaugh specifically states in his dissenting opinion, “[t]he United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.”
Tariffs imposed under separate legislative authority, including the Section 232 steel/aluminum and automobile/auto parts tariffs and Section 301 tariffs, are unaffected by the Supreme Court’s decision and remain in force.
What comes next
Additional guidance will likely be from U.S. Customs and Border Protection (CBP) concerning how to enter affected goods going forward, and potential tariff refunds for past entry of goods. It is possible that the question of how to obtain refunds for past entries may be subject to further litigation.