What Is the IEEPA Tariff? A Plain-English Explanation

The term “IEEPA tariff” has been in headlines since early 2025, but few people outside trade law circles knew what IEEPA stood for before the tariffs were imposed. This guide explains what the law is, how the Trump administration used it, why the Supreme Court struck down the tariffs, and what that means for U.S. importers seeking refunds.

What Is IEEPA?

IEEPA stands for the International Emergency Economic Powers Act, a federal law enacted in 1977. It grants the president broad authority to regulate international commerce and financial transactions during a declared national emergency.

The law was designed primarily to freeze assets and impose financial sanctions on foreign governments and individuals — tools that have been used extensively since 1977 in response to terrorism, narcotics trafficking, and foreign policy crises. Before the Trump administration’s 2025 tariff program, IEEPA had never been used to impose tariffs on a trading partner’s goods.

The relevant statutory text of IEEPA gives the president authority, after declaring a national emergency, to:

“regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest.”

The administration argued that “importation” in this passage included the power to impose tariffs. The Supreme Court disagreed.

How the Trump Administration Used IEEPA for Tariffs

Beginning in February 2025, the Trump administration declared a series of national emergencies related to fentanyl trafficking and trade imbalances, and invoked IEEPA authority to impose tariffs on goods imported from Canada, Mexico, China, and eventually dozens of other trading partners.

This was unprecedented. No prior administration had attempted to use IEEPA to impose import tariffs — the statute was treated by trade lawyers as an authority for sanctions and asset freezes, not a tariff-setting mechanism.

The tariffs imposed under IEEPA were tracked in the U.S. customs system using special HTS (Harmonized Tariff Schedule) codes in Chapter 99 — specifically codes beginning with the prefix 9903.01. These “special provision” codes were layered on top of the standard commodity HTS codes and instructed customs officers to collect an additional percentage duty on imports from specified countries. For a detailed breakdown of these codes, see our IEEPA tariff codes guide.

Why Businesses Challenged the IEEPA Tariffs

The novelty of using IEEPA for tariffs made legal challenge inevitable. Trade lawyers pointed to several problems:

The non-delegation doctrine: Congress has the constitutional power to impose taxes and regulate foreign commerce. When it delegates that power to the executive branch, it must provide an “intelligible principle” guiding how that power is used. Critics argued that reading IEEPA’s “importation” language as a tariff grant gave the president effectively unlimited taxing power over all foreign trade.

Statutory text: The word “tariff” does not appear in IEEPA. “Regulate” and “importation” have specific meanings in trade law that do not ordinarily encompass the imposition of new taxes on goods.

Legislative history: Congress enacted IEEPA in 1977 specifically to separate sanctions authority (which it expanded) from tariff authority (which it left in the Trade Act of 1974 and other specific statutes). The legislative history showed no intent to create tariff authority.

These arguments were taken up by Learning Resources, Inc. — an educational toy manufacturer from Northbrook, Illinois — along with other importers, leading ultimately to the Supreme Court case described below.

The Supreme Court Ruling: Learning Resources, Inc. v. Trump

On February 20, 2026, the Supreme Court issued a 6-3 decision in Learning Resources, Inc. v. Trump, affirming the lower courts’ holdings that IEEPA does not authorize tariff imposition.

Chief Justice Roberts, writing for the majority, held that the word “regulate” in IEEPA’s text — as understood in 1977 when the law was enacted — does not encompass the authority to impose new taxes through tariffs. The Court applied the major questions doctrine, which requires Congress to speak clearly when delegating to the executive branch authority over questions of vast economic and political significance. Because Congress did not clearly authorize tariff imposition in IEEPA, the executive branch lacked that power.

The ruling was immediately effective. The existing IEEPA tariffs were declared unlawfully imposed from the outset — not merely going forward. That legal posture is critical for importers: it means the duties collected were collected without legal authority, and the government is obligated to return them.

For a more detailed breakdown of the legal reasoning and its implications, see our Supreme Court ruling guide.

What “IEEPA Tariff Explained” Means for Your Business

If your business imported goods from China, Canada, Mexico, or other countries affected by IEEPA tariffs during 2025 and early 2026, you likely paid tariff surcharges that the government was not legally authorized to collect. The Court of International Trade has ordered CBP to refund those amounts, plus statutory interest.

The mechanism for claiming those refunds is the CAPE portal, which opened April 20, 2026. Phase 1 covers the most straightforward category of affected entries — unliquidated entries and entries liquidated within the prior 80 days.

Understanding what IEEPA is — and why the Supreme Court struck down the tariffs — matters because it informs the scope of your potential refund. Every dollar your business paid in IEEPA tariff surcharges during the covered period is potentially recoverable, regardless of whether you already accounted for those costs in your pricing or absorbed them through reduced margins.

Key Takeaways

• IEEPA is a 1977 law originally designed for sanctions and asset freezes, not tariffs
• The Trump administration used it to impose tariffs beginning in early 2025 — the first use of IEEPA for tariffs in the law’s history
• The Supreme Court ruled 6-3 on February 20, 2026 that IEEPA does not authorize tariff imposition
• All IEEPA tariffs were declared unlawfully collected, meaning importers may recover the full amount paid plus interest
• The CAPE portal (open since April 20, 2026) is the mechanism for claiming refunds

For information on which specific tariff codes you should look for in your customs records, see our IEEPA tariff codes guide. To check whether your specific import entries qualify, use our eligibility checklist.