On 20 February 2026, the U.S. Supreme Court delivered a landmark ruling that could reshape the global trade landscape for years to come. In a 6–3 decision, the Court ruled that the President does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). Instead, tariff powers remain firmly within the remit of Congress under the U.S. Constitution’s taxation authority.
While the ruling may appear technical on the surface, the real-world consequences are anything but. For global businesses, importers, multinational groups and supply chain leaders, the decision has immediate implications for duty exposure, supply chain costs, pricing strategies, and commercial contracts tied to U.S. trade flows.
At Cooper Parry, our Indirect Tax and Customs specialists have been tracking these developments closely. Below, we break down what the ruling really means for businesses trading with or into the United States, and what companies should be doing now to stay ahead of the disruption.
THE SUPREME COURT’S MESSAGE WAS CLEAR: IEEPA IS NOT A TARIFF TOOL
The Court’s judgment rested on a simple constitutional principle: tariffs are taxes, and taxation powers belong to Congress.
While the President can regulate economic activity during national emergencies, the Court ruled that IEEPA’s authority to “regulate importation” does not extend to imposing tariffs unless Congress has explicitly delegated that power.
Crucially, the Court also highlighted an important historical point: in the nearly 50 years since IEEPA was enacted, no administration had used the statute to introduce tariffs. The absence of precedent, combined with the scale of the tariffs introduced in recent years, reinforced the conclusion that IEEPA was never designed to function as a tariff-setting statute.
As a result, all tariffs imposed under IEEPA authority are now invalid.
This includes:
- Reciprocal global tariffs
- Tariffs linked to trafficking or fentanyl enforcement
- Country-specific tariff surcharges
- Broad import surcharges introduced in 2025
The implications are significant. Billions of dollars in duties collected under these measures are now subject to legal scrutiny and potential recovery claims.
For businesses operating across borders, this ruling represents one of the most significant shifts in U.S. trade policy and customs enforcement in decades.
TARIFFS ENDED QUICKLY, BUT UNCERTAINTY HAS NOT
Following the Supreme Court decision, the administration moved swiftly to terminate all IEEPA-based tariffs. U.S. Customs confirmed that duties tied to these tariffs would no longer be collected for goods entering the U.S. after 24 February 2026.
However, the transition has been far from seamless.
In the immediate aftermath of the ruling:
- Some importers continued to see IEEPA duty codes appear on customs entries due to system update delays.
- Refund mechanisms were not clarified by the Court, leaving administrative agencies and lower courts to determine the process.
- Many businesses began filing protective claims or preparing litigation to secure their right to potential duty refunds.
In short, while the tariffs themselves have been removed, the administrative and legal uncertainty surrounding them is only just beginning to unfold.
THE RAPID POLICY PIVOT: A NEW 10–15% GLOBAL TARIFF
Almost immediately after the ruling, the U.S. administration pivoted to an alternative statutory route.
Using Section 122 of the Trade Act of 1974, a new global import surcharge was introduced.
Key features include:
- Initial rate: 10% global tariff surcharge
- Increase: Raised to 15%, the statutory maximum
- Duration: Limited to 150 days, ending July 2026 unless extended
- Scope: Applies broadly to most imports
- Exemptions: Certain minerals, agricultural products, vehicles and specialised equipment
- Interaction with existing tariffs: The surcharge does not stack on top of existing Section 232 national security tariffs (such as those applied to steel and aluminium)
Section 122 allows only temporary measures linked to balance-of-payments concerns, meaning further adjustments are likely once the 150-day window expires.
For businesses with U.S. supply chain exposure, the message is clear: the removal of one tariff regime does not mean a calmer trade environment. Instead, the ruling signals a shift toward alternative policy tools that can still introduce significant tariff volatility.
THE REFUND QUESTION: A $130 BILLION OPPORTUNITY
One of the most pressing questions facing importers is simple:
Will previously paid tariffs be refunded?
Current estimates suggest more than $130 billion in duties could potentially be reclaimed, depending on how courts and customs authorities ultimately interpret the ruling.
Eligibility largely depends on the status of customs entries.
Unliquidated Entries
Entries that have not yet been liquidated may be amended through the Post Summary Correction (PSC) process, potentially allowing businesses to reclaim duties through administrative channels.
Liquidated Entries
Entries that have already been liquidated may require litigation through the U.S. Court of International Trade. Because customs claims operate under strict timelines, many large importers are already filing protective claims to preserve their rights.
For companies that delay action, the risk is clear: refund opportunities could expire permanently.
U.S. TARIFF DISRUPTION IS FAR FROM OVER
Even without IEEPA tariffs, the U.S. government retains a range of powerful trade instruments.
These include:
- Section 122 – Temporary global import surcharges
- Section 301 – Tariffs related to unfair trade investigations
- Section 232 – National security tariffs
- Section 201 and Section 338 – Additional safeguard and retaliatory measures
Taken together, these tools mean the global trade environment is entering a period of increased policy volatility.
Rather than calming markets, the IEEPA ruling may actually encourage policymakers to pursue more complex, multi-layered tariff strategies.
For businesses trading into or through the United States, this creates greater unpredictability across supply chains, sourcing decisions, and pricing models.
WHAT BUSINESSES SHOULD BE DOING RIGHT NOW
Companies across the UK, Europe, and global markets should be taking immediate steps to manage risk and capture potential opportunities.
Assess IEEPA Exposure and Refund Potential
- Map all affected imports from 2025–2026
- Identify customs entry liquidation deadlines
- Determine which duties may still be recoverable
Stress Test Supply Chains Against Tariff Shocks
Model scenarios including:
- 10–15% global surcharges
- Potential Section 301 investigations
- Changes to tariff exemptions or classifications
Review and Update Commercial Contracts
Ensure agreements include:
- Tariff adjustment clauses
- Supplier responsibility provisions
- Margin protection mechanisms
- Indemnity protections
Companies that act early will be far better positioned to protect profitability and reduce disruption from future policy changes.
HOW COOPER PARRY CAN SUPPORT YOUR TRADE STRATEGY
At Cooper Parry, our Indirect Tax & Customs team are already supporting clients across the UK, Europe and the U.S. as they navigate this rapidly evolving trade landscape.
We help businesses:
Map exposure to invalidated IEEPA tariffs
Identify affected customs entries, assess liquidation status and evaluate the most effective route for recovering overpaid duties.
Assess the impact of new 10–15% tariff surcharges
Understand how Section 122 measures and potential overlapping tariffs could affect your landed costs and pricing models.
Stress test global supply chains
Evaluate how evolving U.S. trade policies could reshape sourcing strategies, logistics decisions and operational resilience.
Strengthen commercial contracts and customs governance
Ensure pricing frameworks, duty clauses and internal controls remain robust as tariff policies shift rapidly.
FINAL THOUGHTS: A ONCE-IN-A-DECADE TRADE RESET
The Supreme Court’s ruling represents far more than the collapse of a single tariff regime.
It signals a fundamental reset in how the United States deploys trade policy.
The rapid removal of IEEPA tariffs, the immediate introduction of new import surcharges, and the likelihood of further trade investigations all point to one reality:
We are entering a new era of tariff volatility.
For companies trading with the United States:
- Cost structures will shift
- Supply chains will need to adapt
- Contractual protections will matter more than ever
- Billions in potential tariff refunds remain at stake
But within this disruption lies opportunity.
Businesses that move early can recover duties, future-proof supply chains, strengthen pricing strategies, and build resilience against future policy shocks.
CONTACT US TODAY
If your business trades with the United States and you want to understand:
- Whether you may be eligible for tariff refunds
- How the new 10–15% surcharge could impact your imports
- What future U.S. tariff risks mean for your supply chain
Our team is here to help.
Get in touch with our team or me today to assess your exposure and build a proactive trade strategy.
