Today, February 20, 2026, the legal landscape of American trade shifted under our feet. In a landmark 6–3 decision for Learning Resources, Inc. v. Trump, the Supreme Court struck down the administration’s sweeping tariff regime, declaring that the President exceeded his constitutional authority with his Liberation Day Tariffs. For importers who have watched their margins erode over the last year, the ruling offers a glimmer of hope—and a massive administrative headache.
The Court has effectively invalidated the Liberation Day Tariffs and the drug-trafficking duties applied to China, Mexico, and Canada. However, as the dust settles, a new 10% global surcharge has already emerged to take its place. Here is what you need to know about the history, the law, and your path to recovering billions in illegally collected duties.
A Year of Emergency Trade War
The saga began in early 2025 when the administration invoked the International Emergency Economic Powers Act (IEEPA) to address what it called a “national emergency” at the border and a “lack of fairness” in global trade. Unlike previous trade actions that targeted specific metals or technologies, these IEEPA tariffs were broad and punitive. They started with 10–25% duties on our largest neighbors and quickly escalated into a “reciprocal” system that taxed nearly every product entering the United States.
For a year, the government argued that the IEEPA’s power to “regulate” importation during a national emergency naturally included the power to tax it. Today, the Supreme Court disagreed. Chief Justice John Roberts, writing for the majority, clarified that while the President has broad emergency powers, the power to levy taxes and duties belongs exclusively to Congress under Article I of the Constitution. Because the IEEPA never mentions the words “tariffs” or “duties,” the President cannot simply invent them in the name of an emergency.
The Pivot to Section 122
The administration did not take the loss quietly. Within hours of the ruling, the President announced a new Section 122 tariff of 10% on all global imports.
Unlike the invalidated IEEPA tariffs, Section 122 of the Trade Act of 1974 is a specific, though rarely used, tool designed to address “large and serious balance-of-payments deficits.” It allows the President to act quickly to protect the U.S. dollar and the economy from international payment imbalances. However, it comes with strict “guardrails” that the IEEPA lacked:
- The Cap: Duties cannot exceed 150% of the existing rate or a 15% surcharge.
- The Clock: These tariffs expire automatically after 150 days unless Congress votes to extend them.
- The Purpose: They must address broad economic payments, not specific foreign policy disputes like drug trafficking.
While this new 10% tax is lower than the 25% or 50% rates many importers were paying yesterday, it represents a new legal front in the ongoing trade war.
Key Players and the Judicial Road Ahead
Navigating this change requires understanding which agencies hold the keys to your money and which courts will hear your pleas.
- U.S. Customs and Border Protection (CBP): This is the “boots on the ground” agency. They collect the money, and they are the ones who must process your protests.
- The Department of the Treasury: Secretary Scott Bessent has already hinted that while the government respects the Court, it will not make the refund process easy or automatic.
- The U.S. Court of International Trade (CIT): Located in New York, this is the specialized court that will hear the vast majority of refund claims. Most importers will join “mass litigation” suits here to challenge the government’s refusal to pay out quickly.
- The Federal Circuit: Any appeals from the CIT will go to the U.S. Court of Appeals for the Federal Circuit, which has already shown skepticism toward broad executive trade powers.
Securing Your Relief from Liberation Day Tariffs Paid: The Action Plan
The Supreme Court invalidated the tariffs, but it did not write you a check. With an estimated $175 billion on the line, the government will likely use every procedural trick to keep that cash in the Treasury. You must act aggressively to preserve your rights.
Step 1: Audit Your ACE Data
Immediately contact your customs broker and pull an ACE (Automated Customs Environment) Report for all entries made since February 2025. You need to identify every dollar paid under IEEPA authority. Specifically, look for duty codes associated with “Reciprocal Tariffs” or “Emergency Trafficking” duties.
Step 2: Track Your Liquidation Dates
In the world of customs, “liquidation” is the final closing of an entry. Once an entry liquidates, you have a strict 180-day window to file a protest. If you miss this window, your right to a refund for that specific shipment is likely gone forever. Create a “ticking clock” spreadsheet to ensure no deadline passes unnoticed.
Step 3: File Protective Protests
Do not wait for a formal refund program. File CBP Form 19 (Protests) for all liquidated entries, citing the Learning Resources decision. For entries that are not yet liquidated, file Post-Summary Corrections (PSCs) to remove the IEEPA duties and request an immediate adjustment.
Step 4: Engage Legal Counsel for § 1581(i) Claims
Many importers find that administrative protests are denied or ignored by CBP. In these cases, your attorney may need to file a lawsuit under 28 U.S.C. § 1581(i) at the Court of International Trade. This allows you to challenge the administration’s overall collection of the illegal tax rather than fighting shipment-by-shipment.
Step 5: Review Downstream Contracts
If your business passed these Liberation Day Tariffs onto your customers through surcharges, check your contracts. You may have a legal obligation to share any eventual refunds with your buyers. Conversely, if you are a buyer who paid these surcharges, contact your suppliers now to ensure they are filing the necessary paperwork to recover the funds.
Conclusion
The Court’s decision leaves many unanswered questions. However, don’t expect the government to actively attempt to refund this money. You must act now to protect your rights and fight for the money you should not have paid. The “Return of the Billions” will be a marathon, not a sprint. To see how we can help prosecute your refund, contact us today.
