Today, the Supreme Court held that “IEEPA does not authorize the President to impose tariffs.”
First, the Court considered past “major questions” cases, and observed that in the context of tariffs, when “Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits.” It considered that no President has invoked the statute to impose any tariffs in IEEPA’s half century of existence. It also considered that the “economic and political significance” of the authority the President asserted provides a reason to hesitate before concluding that Congress meant to confer such authority. It disagreed with points made by the Government and the dissenting opinion of several Justices that the major questions doctrine should not apply to emergency statutes, and that a foreign affairs exception should apply in this context.
Second, the Court looked to the statutory text and held that “regulate…importation” does not permit tariffs or duties. Here, the Court observed that the U.S. Code has many statutes granting the Executive the authority to “regulate,” but the Government could not identify any statute in which “regulate” includes the power to tax. It observed that a contrary reading would render IEEPA partly unconstitutional because the statute authorizes the President to “regulate…importation or exportation” and taxes on exports are expressly forbidden by the Constitution. It found that other words in the statute do not suggest that Congress intended for “regulate” to include revenue-raising power and disagreed that the Yoshida decision of the Court of Customs and Patent Appeals supported a finding that IEEPA authorizes tariffs. The Court also considered its wartime precedents but indicated that “regardless of what they might mean for the President’s inherent wartime authority, all agree that the President has no inherent peacetime authority to impose tariffs.” Finally, it declined to extend its holdings in other cases, including Algonquin (which relates to Section 232), and Dames & Moore (a non-tariff case) in the IEEPA context.
On jurisdiction, the Supreme Court agreed with the U.S. Court of Appeals for the Federal Circuit that the V.O.S. Selections case falls within the exclusive jurisdiction of the CIT, and held that the U.S. District Court for the District of Columbia lacked jurisdiction in the Learning Resources case. Thus, it affirmed the judgment in V.O.S. Selections and vacated the judgment in Learning Resources. Prior to the Supreme Court agreeing to hear the challenge to IEEPA tariffs, the Federal Circuit had affirmed the CIT’s decision invalidating the tariffs imposed under certain Executive Orders but had remanded the case in light of the Supreme Court’s decision in Trump v. CASA, Inc. on universal injunctions. The V.O.S. Selections case should now go back to the CIT for further proceedings, in light of the Supreme Court’s holding that IEEPA does not authorize tariffs.
What Happens Next
- The Supreme Court did not discuss when tariffs will stop being collected nor the issue of refunds. We will need to await guidance from CBP on the status of current/future collections of tariffs, and development in the lower court proceeding on how any refund process would unfold. We note that in a press conference following the Supreme Court’s decision, the President said that the Supreme Court did not discuss refunds and indicated that the issue will be litigated.
- To pursue refunds of paid IEEPA tariffs, importers should be prepared to either file protests within 180 days of entry liquidation or file post summary corrections to request refunds on unliquidated entries. Now that the Supreme Court has held that IEEPA does not authorize the President to impose tariffs, the law is settled and we would argue that any liquidation by CBP contrary to the law is protestable.
- Moreover, the most likely alternative to protest is proceeding to court under 28 U.S.C. § 1581(i), and the two-year period for filing such actions is not close to expiring whereas many importers are already up against protest deadlines. We will continue to assess the necessity of additional steps, including filing one’s own lawsuit with the CIT before the statute of limitations runs, based on developments in the lower court proceeding.
- Today, the President also announced that he will sign an order to impose 10% global tariffs immediately under Section 122 of the Trade Act of 1974. Tariffs under Section 122 are limited to 150 days unless Congress extends the tariffs. The President indicated that the administration would also be initiating several Section 301 and other investigations but did not give further details.
- The Supreme Court’s decision has no impact on existing Section 232 tariffs (e.g., those on steel and aluminum) and Section 301 tariffs.
