by Craig Brightup, The Brightup Group —
On Feb 20, the Supreme Court of the United States (SCOTUS) issued a 6-3 decision that tariffs imposed by President Trump using the International Emergency Economic Powers Act (IEEPA) are not legal. As such, SCOTUS struck down the “fentanyl” tariffs that went into effect on March 4, 2025, for Mexico, Canada, and China, and the “reciprocal” tariffs announced by President Trump on April 2, 2025, a/k/a “Liberation Day,” which were applied to some 200 countries.
President Trump quickly responded to the SCOTUS decision by shifting the IEEPA tariffs to tariffs under Sec. 122 of the Trade Act of 1974 at a rate of 10%, though he’s threatened 15%. Sec. 122 doesn’t require investigations, but the 122 tariffs are limited to 15% and 150 days unless extended by Congress, which isn’t likely. Also, the IEEPA exemptions stay intact, and trade deals remain unchanged with the Administration saying the 122 tariffs won’t be added to them.
The President’s proclamation ending IEEPA tariffs can be found here, and his proclamation initiating the Sec. 122 tariffs can be found here. Customs and Border Protection (CBP) subsequently issued CSMS #67834313 – Ending Collection of International Emergency Economic Powers Act Duties, and CSMS #67844987 – Imposing Temporary Section 122 Duties as guidance for each proclamation.
While 122 tariffs are in effect, the White House signaled that Sec. 301 of the Trade Act of 1974 and Sec. 232 of the Trade Expansion Act of 1962 will be used more extensively. Sec. 301 has been used mostly for products from China, and the U.S. Trade Representative (USTR) must conduct investigations for unfair trade practices before 301 tariffs can be imposed.
The Dept. of Commerce also must conduct Sec. 232 tariff investigations to determine if they’re needed to maintain national security. The most visible 232 tariffs involve steel, aluminum, and copper imports, and both 301 and 232 investigations can take months to complete.
With the short timeline for 122 tariffs and lengthy timeline for 301 and 232 tariffs (even though investigations began before the SCOTUS decision), the President could also turn to Sec. 338 of the Tariff Act of 1930. Sec. 338 gives the President authority to impose tariffs up to 50% when a foreign country has taken actions that disadvantage U.S. commerce, but it hasn’t been used or challenged in court.
Finally, with SCOTUS silent on the matter of IEEPA tariff refunds, numerous company lawsuits have been filed with the U.S. Court of International Trade (CIT). The CIT will have to establish a system to process an estimated 300,000 shippers who’ve paid the IEEPA tariffs and a total amount that could be $175 billion.
After the SCOTUS decision, lead plaintiff V.O.S. Selections filed a motion to the Court of Appeals for the Federal Circuit (where its case resides because the Administration went to SCOTUS), to move its case to the CIT for an expedited tariff refund. The Court gave the Department of Justice until Feb. 27 to respond to the V.O.S. motion and on March 2 it denied DOJ’s request for a 90-day delay.
V.O.S. and several other plaintiffs who joined in the filing said though their motion only covers one group of small businesses, it has legal implications for many cases and “This Court’s prompt action will facilitate the prompt payment of refunds…” If so, IHA members may get an indication of how the Trump Administration plans to deal with the issue of tariff refunds sooner than expected.
