The landscape of U.S. trade changed overnight on February 20, 2026, when the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the President the authority to impose broad import tariffs. This landmark decision has opened the door for over 330,000 importers to seek a share of an estimated $166 billion in refunds.

What is the IEEPA and Why Did the Court Strike it Down?



The IEEPA is a 1977 federal law that allows the President to regulate international commerce during a declared national emergency. While it has long been used for economic sanctions and asset freezes, recent years saw it used to bypass Congress to levy global tariffs. The Supreme Court's 2026 ruling reaffirmed that taxation and tariff authority reside solely with Congress under Article I of the Constitution.

Key Updates: The Road to IEEPA Refunds

If your business paid duties on entries since April 2025, you are likely eligible for a refund plus interest. Here is the current status of the recovery process:

• The CIT Order: On March 4, 2026, the Court of International Trade (CIT) ordered U.S. Customs and Border Protection (CBP) to begin liquidating entries without IEEPA duties.
• The "CAPE" System: CBP is currently developing a new portal within the Automated Commercial Environment (ACE) called CAPE (Consolidated Administration and Processing of Entries). This system, expected to launch in April 2026, will allow for bulk refund processing.
• Interest Accrual: The government is currently on the hook for approximately $650 million in interest per month until these refunds are processed.

How to Prepare Your Business for IEEPA Recovery

To ensure you don’t miss out on "contingent assets" that could significantly boost your 2026 cash flow, follow these steps:

1. Audit Your Import Records: Identify every entry where IEEPA duties were paid. Work with your customs broker to pull a comprehensive data set.
2. Monitor Liquidation Status: Track the 180-day protest window for your entries. While the CIT order covers many, "finally liquidated" entries may require separate legal action.
3. Align with Tax Teams: IEEPA refunds can trigger transfer-pricing adjustments. Ensure your 2025/2026 financial reporting accounts for these incoming funds to avoid audit red flags.
4. Watch for Replacement Tariffs: The administration has already signaled a shift toward Section 122 and Section 301 authorities to replace the lost IEEPA revenue.

Pro Tip: Don't assume refunds are automatic. While the court has ruled the tariffs illegal, the burden of filing accurate data through the CAPE portal falls on the Importer of Record (IOR).