Updated August 25, 2026: The situation has continued to evolve since this article was published. Refunds are now moving through CBP's CAPE process (Phase 1 live since April 20, 2026) rather than the "up to $175 billion via PSC alone" estimate cited below — roughly $165 billion is moving through CAPE. As of August 25, 2026, CBP prohibits initiating an IEEPA refund by PSC. A Form 19 protest (generally 180 days after liquidation) is the next rung when CAPE will not take the entry; that does not mean the refund is gone. Separately, the 10% Section 122 surcharge described here expired on July 24, 2026; the Court of International Trade struck it down on May 7, 2026, and that ruling is currently stayed on appeal. Read our latest analysis: CIT Orders IEEPA Tariff Refunds; Appeal Expected, the IEEPA refund deadline tracker, our IEEPA refunds & CAPE guide, and our Section 122 surcharge overview.
On February 20, 2026, the U.S. Supreme Court declared IEEPA-based tariffs unconstitutional in a landmark ruling that invalidates over $133 billion in collected duties. A 10% Section 122 surcharge took effect February 24 (it has since expired), and importers still need to act on entry-by-entry filing deadlines to recover overpayments.
What Happened: The Supreme Court Ruling
On February 20, 2026, the U.S. Supreme Court issued one of the most consequential trade decisions in modern history, striking down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) as unconstitutional. In a decisive ruling, the Court held that IEEPA does not grant the President authority to impose tariffs on imports, finding that the statute's emergency economic powers do not extend to the regulation of international trade through duty assessments.
The Court's reasoning centered on the separation of powers. Article I, Section 8 of the Constitution vests Congress with the exclusive power to "lay and collect Taxes, Duties, Imposts, and Excises" and to "regulate Commerce with foreign Nations." While IEEPA grants broad emergency powers to address unusual and extraordinary threats to national security, the Court determined that these powers cannot be stretched to encompass what is fundamentally a congressional prerogative: setting tariff rates on imported goods.
The practical impact is staggering. Since 2018, the executive branch has used IEEPA authority to impose sweeping tariffs on imports from China, Canada, Mexico, and virtually every other trading partner. Importers have collectively paid over $133.5 billion in IEEPA tariffs during this period. With the constitutional foundation of these tariffs now invalidated, every dollar collected under IEEPA authority is potentially subject to refund.
This ruling does not affect tariffs imposed under other legal authorities. Section 232 tariffs on steel and aluminum, Section 301 tariffs on Chinese goods, and standard Most Favored Nation (MFN) duty rates remain in full effect. Only tariffs that relied on IEEPA as their legal basis are impacted.
"Ending Certain Tariff Actions" Executive Order
Within hours of the Supreme Court's decision, the President signed an executive order titled "Ending Certain Tariff Actions," formally revoking nine IEEPA-based executive orders that had imposed tariffs on imports. This executive order acknowledged the Court's ruling and dismantled the legal framework that supported IEEPA tariffs across multiple trade actions.
The revoked executive orders covered the full range of IEEPA tariff actions, including:
- China IEEPA tariffs — The additional duties imposed on Chinese imports under IEEPA authority, which had reached rates as high as 145% on certain goods
- Canada tariffs — The 25% tariff on most Canadian imports and the 10% tariff on Canadian energy products imposed under IEEPA
- Mexico tariffs — The 25% tariff on Mexican imports imposed under IEEPA emergency declarations
- Global baseline tariffs — The broad-based tariffs applied to imports from virtually all trading partners under IEEPA authority
- Country-specific reciprocal tariffs — Elevated tariff rates targeting specific countries beyond the baseline rate
- Related amendments and modifications — Several follow-on executive orders that adjusted rates, added exemptions, or modified the scope of earlier IEEPA tariff actions
The revocation is effective immediately, meaning that as of February 20, 2026, no IEEPA tariffs are being assessed on new imports entering the United States. However, the revocation alone does not trigger automatic refunds for previously collected duties. Importers must affirmatively file for refunds through the proper CBP channels.
New 10% Section 122 Import Surcharge
Simultaneously with the revocation order, the President signed a second executive order establishing a new 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974. (See our Section 122 surcharge overview for details on rates, exemptions, and what it means for your entries.) This provision, which has rarely been invoked, authorizes the President to impose temporary import surcharges of up to 15% to address large and serious balance-of-payments deficits.
Key Details:
- Rate: 10% ad valorem on the customs value of imported goods
- Effective Date: February 24, 2026
- Duration: 150 days (expires approximately July 24, 2026)
- Legal Authority: Section 122 of the Trade Act of 1974
- Applicability: Broadly applies to most imported goods, with specific exemptions
Exemptions:
The Section 122 surcharge includes several important exemptions that importers should evaluate carefully:
- USMCA-qualifying goods from Canada and Mexico that meet the rules of origin under the United States-Mexico-Canada Agreement
- Products already subject to Section 232 tariffs, including steel and aluminum products, to avoid duty stacking
- Certain agricultural products that are deemed essential for food security
- Pharmaceutical products, including active pharmaceutical ingredients and finished dosage forms
- Aerospace components covered under existing bilateral trade agreements
What Remains Unchanged:
It is critical to understand that the Supreme Court ruling and subsequent executive orders only affect IEEPA-based tariffs. The following remain fully in effect:
- Section 232 tariffs on steel (25%) and aluminum (25%) — These were imposed under a different legal authority and were not challenged in this case
- Section 301 tariffs on Chinese goods — These tariffs, which cover a wide range of Chinese imports, were authorized under a separate statute and remain valid
- Standard MFN duty rates — The baseline tariff rates established by Congress through the Harmonized Tariff Schedule continue to apply
- Antidumping and countervailing duties — All AD/CVD orders remain in effect
The Refund Opportunity
The Supreme Court's ruling opens the door to what may be the largest customs refund event in U.S. history. The numbers are extraordinary:
- $133.5 billion in IEEPA tariffs collected since these duties were first imposed
- Up to $175 billion in potential refunds when including statutory interest that has accrued on overpayments
- Every importer who paid IEEPA tariffs during the period these duties were in effect may be eligible for a refund
The refund process is not automatic. As of August 25, 2026 the primary path is CBP's CAPE process — see our IEEPA CAPE guide. CBP prohibits initiating an IEEPA refund by PSC. A Form 19 protest is the next rung when CAPE will not take the entry. That does not mean the refund is gone.
Deadlines still run entry by entry. Missing a CBP window usually bars recovery at CBP; the Court of International Trade can still hear some disputes.
Filing Windows and Deadlines
Understanding your deadlines is still important. Use this ladder:
- CAPE first — CBP's current IEEPA refund process. Start at IEEPA CAPE.
- Form 19 protest — when CAPE will not take the entry. Generally due within 180 days of liquidation.
- CIT — some disputes can still go to the Court of International Trade after CBP paths close.
As of August 25, 2026, CBP prohibits initiating an IEEPA refund by PSC. PSC remains for ordinary pre-liquidation class, value, FTA, Section 122, and FL-301 corrections — not IEEPA.
For Liquidated Entries (Protest Route):
If your entry has already liquidated and CAPE does not apply, the usual CBP path is a formal protest under 19 U.S.C. Section 1514.
- File protest within 180 days of the date of liquidation
- Missing the 180-day window typically bars a CBP protest
- It is not automatically the end of every legal path — CIT review can still exist in some cases
- Protests are filed with the CBP port director at the port of entry
Calculate Your Deadlines:
For each entry, determine:
- The entry date
- The liquidation date (or estimated liquidation date if not yet liquidated)
- Your filing deadline based on the applicable method
If you are unsure about any of these dates, contact your customs broker or check your ACE account immediately.
CAPE first, then protest when CAPE will not take the entry
Do not treat a PSC as the IEEPA refund product. CAPE is the current CBP process. As of August 25, 2026, CBP prohibits initiating an IEEPA refund by PSC. A Form 19 protest is the next rung when CAPE will not take the entry.
PSC remains for ordinary pre-liquidation class, value, FTA, Section 122, and FL-301 corrections — not IEEPA. For that how-to, see our comprehensive PSC filing guide.
Protest (19 U.S.C. Section 1514):
A protest is a formal legal challenge to a CBP decision, including the assessment of duties on a liquidated entry.
- Applies to entries that have already liquidated
- Must be filed within the strict 180-day window from the liquidation date
- Filed with the CBP port director at the relevant port of entry
- Requires more extensive documentation and legal argumentation
- Represents your last resort for recovering duties on liquidated entries
Step-by-Step Action Plan for Importers
Whether you have ten entries or ten thousand, the process follows the same sequence. Move through these steps as quickly as possible — deadlines are already passing for some importers.
Identify Your IEEPA Entries — Review all import entries dating back to 2018 and isolate those where IEEPA tariffs were assessed. Your customs broker should be able to pull this data, or you can review your ACE records directly.
Check Liquidation Status — For each IEEPA entry, determine whether it has liquidated. CAPE is the headline path for IEEPA lines. As of August 25, 2026, CBP prohibits initiating an IEEPA refund by PSC. A Form 19 protest is the usual next CBP path when CAPE will not take the entry.
Verify ACH Enrollment — As of February 6, 2026, CBP requires ACH enrollment for all refund disbursements. If you are not enrolled, you cannot receive your refund. Read our ACH enrollment guide for step-by-step instructions.
Engage a Licensed Customs Broker — CAPE packages and any protest filings need a licensed broker or a self-filer with ACE access. The importer of record or original filer submits CAPE; Strix prepares and does not file CAPE as broker of record on someone else's entries.
Use CAPE for IEEPA lines first — File or complete CAPE declarations before treating the entry as a protest project.
Protest when CAPE will not take the entry — A Form 19 protest is generally due within 180 days of liquidation. That does not mean the refund is gone.
Monitor Refund Processing — After filing, track CBP's processing of your claims. Refunds for valid claims are expected to be processed within 90 to 120 days, though the unprecedented volume may cause delays.
ACH Enrollment: Required for Refunds
This is a detail that many importers overlook, but it can completely block your refund. Starting February 6, 2026, CBP issues all refunds electronically via Automated Clearing House (ACH) direct deposit. Paper checks are no longer issued.
If you have not enrolled your bank account with CBP for ACH refunds, you will not receive your money — even if your CAPE declaration or protest is approved. Do not let an administrative oversight cost you potentially millions of dollars.
Read our complete guide on CBP Electronic Refunds for detailed enrollment instructions and troubleshooting.
Recovering your IEEPA duties through CAPE
If you paid IEEPA duties, start with CAPE. Strix can prepare the package; the importer of record or original filer submits the declaration through ACE. Flat fee, free eligibility review. CBP pays any refund to the importer by ACH.
How Strix Can Help
Strix is a licensed customs brokerage with ACE-certified direct filing capabilities. We have been filing customs entries since 2006, and our team is ready to help importers navigate the evolving IEEPA refund situation.
With refunds now flowing through CBP's CAPE process on entry-by-entry deadlines, importers should work closely with their customs broker to ensure they are positioned to receive refunds as the process unfolds. Strix can assist with monitoring developments, verifying ACH enrollment, and providing general brokerage services to help you navigate the changing trade landscape.
For the latest developments, read our article on the CIT's March 4 order directing IEEPA refunds.
This article was originally published on February 21, 2026 and has been updated August 25, 2026 to reflect subsequent court developments and CBP's bar on initiating IEEPA refunds by PSC.