Overview
On November 5, 2025, the US Supreme Court heard consolidated oral arguments in V.O.S. Selections, Inc. v. Trump and Learning Resources, Inc. v. Trump, the pair of high-profile cases challenging President Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose global tariffs, specifically the Reciprocal Tariffs and the Trafficking Tariffs. As these cases could significantly roll back the President's ability to impose sweeping global tariffs and affect the administration's ongoing trade negotiation positions, the importance of this ruling on the global trade landscape cannot be overstated. Additional background on the tariffs and legal challenges can be found in our previous blog post.
Highlights from IEEPA Tariff Case Oral Arguments
Over the course of a lengthy and active hearing, the Justices grappled with a host of legal questions related to the President's use of emergency powers to impose tariffs. Questions to the US Solicitor General and counsel for plaintiffs ranged from interpreting the role of tariffs as taxes or regulatory tools, to the statutory language of IEEPA, and further to constitutional principles like the nondelegation of congressional authority. As expected, the liberal Justices expressed skepticism toward the administration's defense of the use of IEEPA to impose broad-based taxes, while conservative Justices Kavanaugh and Alito were critical of the plaintiffs' interpretation of IEEPA. However, in some instances, Justices Barrett and Gorsuch, and even Chief Justice Roberts, appeared to break from the conservative majority, offering critiques of the administration's arguments.
Notably, Justices on both sides raised concerns that endorsing the administration's interpretation of IEEPA would grant the President too much power, as the Court has previously held that Congress must clearly articulate when it delegates "major powers" to the executive branch and must impose "intelligible principles," or limits, on such delegations. Justice Gorsuch, in particular, warned that adopting the administration's view could effectively eliminate any meaningful constraints on presidential power and asked what guardrails would be left to stop Congress from "just abdicating all responsibility to regulate foreign commerce – for that matter, declare war – to the President."
A final decision could come as early as in a few months, as the Court has agreed to hear the case on an expedited schedule.
Refunds
Of great importance to importers, but raised only in passing during the oral argument, is the issue of potential tariff refunds. When asked about the refund process, plaintiffs' counsel acknowledged it could be a "complicated" question. Just how difficult any refund process will be depends in significant part on just how difficult the Trump administration decides to make it, for example, by fighting against refunds for parties other than named plaintiffs, or by imposing substantial additional steps to refund duties paid.
Under the long-standing procedures for claiming refunds of duties or tariffs collected on imports, importers typically must file a protest with US Customs and Border Protection (CBP) within 180 days of liquidation of a specific entry. Liquidation usually occurs approximately 10 months after importation, so a protest typically is due within approximately 16 months of importation. Because this 180-day deadline is strictly enforced, importers must closely monitor the liquidation status of their entries, and the corresponding 180-day deadline for each such entry. Assuming the Supreme Court rules that the use of IEEPA to impose tariffs was improper, in whole or in part, an importer would argue in its protest that these duties were illegally collected and should be refunded. If the Supreme Court rules against the use of IEEPA to impose these tariffs, the Trump administration could direct CBP to honor these protests and refund duties collected. However, in a relatively untested area like this, CBP could find reason to deny these protests, or could be directed to do so. If that protest is denied by CBP, the importer would have the right to appeal that denial to the US Court of International Trade (CIT) – the same court that initially decided that the Trafficking Tariffs and the Reciprocal Tariffs were contrary to law.
While "protest first, then appeal" is the normal process, in some prior cases, the protest step has not been necessary. Instead, the CIT may find that a direct judicial appeal to the CIT, without filing an initial protest, is permissible. For example, in US Shoe Corp. v. United States, the CIT found that, even where the plaintiffs did not file a protest of a denial of a refund request, plaintiffs were entitled to a refund for payments received by CBP within two years of the filing of the complaint with the court. As such, importers interested in this issue should consider whether to file protests in early 2026 and/or pursue direct appeals in early 2027.
Additionally, we note that some litigation surrounding the issue of IEEPA tariff refunds has already commenced. Turn5, Inc. v. CBP, was filed at the CIT on November 6, following the oral arguments. In that complaint, plaintiffs are seeking a preliminary injunction to suspend liquidation to ensure that their right to a refund on duties paid under the IEEPA tariffs is not jeopardized. Plaintiffs also seek an injunction preventing CBP from imposing further duties under the IEEPA tariffs and a full refund of all IEEPA duties already paid.
Finally, class actions may be an alternative avenue for addressing refunds. There is very little history of class actions being used to process numerous refunds of import charges. It remains to be seen whether the courts will agree that class action is the correct vehicle for refunds if the Supreme Court decides in favor of the plaintiffs. Accordingly, importers should closely monitor these cases, and any others that may be filed, and discuss with experienced litigation counsel what action to take to protect their right to obtain refunds.
Alternative Avenues for the Administration's Tariffs
Ultimately, however, even if the Supreme Court rules against the IEEPA tariffs, the Trump administration has a range of other mechanisms to re-impose similar tariffs under different authorities (a fact conceded by plaintiffs' counsel during the hearing). In a briefing on November 6, President Trump himself stated that he plans to develop a "game two plan" should the Court rule against him. We review a list of possible alternative actions, and their requirements and limitations, below:
Section 338
Section 338 of the Tariff Act of 1930 authorizes the President to impose tariffs of up to 50% on countries that take discriminatory trade measures, directly or indirectly, against the United States. It also allows the President to take further retaliatory measures if countries subject to Section 338 tariffs continue or escalate their discriminatory conduct. This provision has not been invoked in decades, and no President has ever used it to impose tariffs. Moreover, the statute contains limitations including a 50% cap on tariffs and a mandatory 30-day delay in the collection of tariff revenue.
Section 338 retains some limitations that the President did not have to contend with in his use of IEEPA; however, it seems likely that the administration will turn to this authority. It grants the President broad discretion to determine what constitutes discrimination against US commerce. The administration could argue that persistent trade deficit, purportedly addressed by the Reciprocal Tariffs, amounts to a form of economic discrimination warranting action under Section 338.
While no prior administration has used Section 338 to impose tariffs, President Trump has shown no hesitation to revive little-used trade authorities like Section 232 and Section 301. Indeed, during the oral argument, Justice Alito asked plaintiffs' counsel whether the tariffs could be reissued under Section 338 but suggested that such a move could lead to renewed litigation in the lower courts.
Section 122
Section 122 of the Trade Act of 1974 authorizes the President to impose tariffs to address a "large and serious" balance-of-payments deficit. However, the President may only impose a global tariff of up to 15% for a maximum of 150 days. Any extension beyond that period requires congressional approval.
Like Section 338, this authority has not previously been used to impose tariffs. While Section 122 aligns with the stated purpose of the Reciprocal Tariffs, to reduce the US trade deficit, its relatively lower cap on the permissible tariff rate, and time limitation, may make it a less appealing option for the administration.
Section 232
Section 232 of the Trade Expansion Act of 1962 allows the President to impose tariffs targeting specific sectors on national security grounds. Section 232 does not impose a cap on tariff rates or a time limit on their duration. However, Section 232 investigations require a more extensive investigation process involving the Department of Commerce (although, under President Trump's second administration, investigations have proceeded on more expedited timelines). President Trump used Section 232 in this first term to impose tariffs on steel and aluminum and has dramatically increased the number of Section 232 cases in his second term. These tariffs were challenged in court and upheld.
Given that the Trafficking Tariffs are intended to address national security concerns related to fentanyl and illegal immigration, the administration may consider invoking Section 232. However, this authority does not provide the President the same flexibility as IEEPA. In addition to the formal investigation requirement, Section 232 tariffs must be sector-specific, whereas the Trafficking Tariffs have thus far been used to target countries. Further, should President Trump decide to use Section 232 to re-impose the Reciprocal Tariffs, it would require perhaps an overly expansive reading of the statute to conclude that trade deficit constitutes a threat to national security under Section 232.
Section 301
Section 301 of the Trade Act of 1974 grants the President the authority to impose tariffs in response to unfair foreign trade practices or violations of US trade agreements. Like Section 232, Section 301 does not impose limits on the level or duration of tariffs. However, it does also require a formal investigation. During his first term, President Trump imposed extensive Section 301 tariffs targeting China, a practice that has continued in the current administration. These tariffs were also challenged in court and ultimately upheld.
Section 301 allows President Trump to continue targeting specific countries, consistent with his current approach under the Reciprocal and Trafficking Tariffs. However, due to the formal investigation requirement, its use will likely be more limited in scope and frequency. The administration may choose to focus Section 301 actions on countries that are members of trade deals with the US
Legislative Tools
The administration could also turn to Congress for additional tariff authority. If the Supreme Court strikes down the IEEPA tariffs, Congress could pass legislation to expand or create presidential tariff authority either within the text of IEEPA or through the passage of a new bill. For example, President Trump could advocate for the passage of legislation like the Foreign Pollution Fee Act (FPFA), which proposes imposing tariffs on imported goods based on the level of greenhouse gas emissions associated with their production. However, neither path seems likely given the shrinking legislative calendar ahead of the 2026 midterm elections, the narrow party margins in both the House and the Senate, and the growing resistance in Congress to some of President Trump's tariff actions, even from members of his own party.
Outlook on IEEPA Tariffs
If the Supreme Court rules against the IEEPA tariffs, the administration will likely act quickly to reimpose similar measures under the authorities described above. One possible approach would be to use Section 122 as a temporary measure to reintroduce the global Reciprocal Tariffs, although capped at 15%, while the administration waits out the 30-day delay required under Section 338.
While President Trump certainly can, and likely will, re-impose comparable tariffs under different authorities, it appears that political will may be shifting against the tariffs. On October 30, 2025, the Senate passed a symbolic resolution (51-47) opposing the global Reciprocal Tariffs. Republican Senators Mitch McConnell, Rand Paul, Susan Collins, and Lisa Murkowsi joined Democrats in the vote. The Senate also passed similar resolutions opposing the IEEPA tariffs imposed on Canada and Brazil.
As we await the Supreme Court's decision, Steptoe's Trade Policy team can help you navigate these developments, assess your potential exposure, and evaluate strategies to mitigate the impact of the rapidly shifting tariff regimes.
