A central element of the economic policies of the Trump administration during this second term of President Donald Trump has been tariffs. However, a recent February 20, 2026 Supreme Court decision, Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026), No. 24-1287, has a significant impact on the use of tariffs by President Trump. This article discusses the Learning Resources case and two key implications from the decision concerning tariff constitutionality and tariff refunds.

The key statute in the Learning Resources case was the International Emergency Economic Powers Act (“IEEPA”). As described in Chief Justice John Roberts’ opinion (which was considered the opinion of the Supreme Court by a 6-3 vote, with Justice Sonia Sotomayor, Justice Elana Kagan, Justice Neil Gorsuch, Justice Amy Coney Barrett, and Justice Ketanji Brown Jackson joining Chief Justice Roberts), “Enacted in 1977, IEEPA gives the President economic tools to address significant foreign threats. . . . When acting under IEEPA, the President must identify an ‘unusual and extraordinary threat’ to American national security, foreign policy, or the economy, originating primarily ‘outside the United States.’ 50 U. S. C. §1701(a). And he must ‘declare[] a national emergency’ under the National Emergencies Act. . . . He may then, ‘by means of instructions, licenses, or otherwise,’ take the following actions to ‘deal with’ the threat: ‘investigate, block during the pendency of an investigation, 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.’ §§1701(a), 1702(a)(1)(B). President Trump declared a national emergency as to both the drug trafficking and the trade deficits, which he deemed ‘unusual and extraordinary’ threats. He then imposed tariffs to deal with each threat”.

Chief Justice Roberts’ opinion framed the basic issue in the Learning Resources case as “[w]e decide whether [IEEPA] authorizes the President to impose tariffs. . . . Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA – ‘regulate’ and ‘importation’ – the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight”.

Chief Justice Roberts’ opinion first discussed the U.S. Constitution. Chief Justice Roberts stated, “Article I, Section 8, of the Constitution sets forth the powers of the Legislative Branch. The first Clause of that provision specifies that ‘The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.’ . . . The power to impose tariffs is ‘very clear[ly] . . . a branch of the taxing power.’ . . . ‘A tariff,’ after all, ‘is a tax levied on imported goods and services.’ . . . Recognizing the taxing power’s unique importance, and having just fought a revolution motivated in large part by ‘taxation without representation,’ the Framers gave Congress ‘alone . . . access to the pockets of the people.’ . . . They required ‘All Bills for raising Revenue [to] originate in the House of Representatives.’ . . . They did not vest any part of the taxing power in the Executive Branch. . . . The Government thus concedes, as it must, that the President enjoys no inherent authority to impose tariffs during peacetime. . . . And it does not defend the challenged tariffs as an exercise of the President’s warmaking powers. The United States, after all, is not at war with every nation in the world. The Government instead relies exclusively on IEEPA. It reads the words ‘regulate’ and ‘importation’ to effect a sweeping delegation of Congress’s power to set tariff policy – authorizing the President to impose tariffs of unlimited amount and duration, on any product from any country”.

Next, Chief Justice Roberts’ opinion disagreed with the “Government’s” interpretation of IEEPA. Chief Justice Roberts stated, “To begin, IEEPA authorizes the President to ‘investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit . . . importation or exportation.’ 50 U. S. C. §1702(a)(1)(B). Absent from this lengthy list of powers is any mention of tariffs or duties. That omission is notable in light of the significant but specific powers Congress did go to the trouble of naming. It stands to reason that had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly – as it consistently has in other tariff statutes. . . . The power to ‘regulate . . . importation’ does not fill that void. . . . The U. S. Code is replete with statutes granting the Executive the authority to ‘regulate’ someone or something. Yet the Government cannot identify any statute in which the power to regulate includes the power to tax. . . . We are therefore skeptical that in IEEPA – and IEEPA alone – Congress hid a delegation of its birth-right power to tax within the quotidian power to ‘regulate.’ . . . The ‘neighboring words’ with which ‘regulate’ ‘is associated’ also suggest that Congress did not intend for ‘regulate’ to include the revenue-raising power. . . . ‘Regulate’ is one of nine verbs listed in §1702(a)(1)(B). Each authorizes a distinct action a President might take in sanctioning foreign actors or controlling domestic actors engaged in foreign commerce – blocking imports, for example, or prohibiting transactions. Presidential practice under IEEPA demonstrates as much. . . . None of IEEPA’s authorities includes the distinct and extraordinary power to raise revenue. And the fact that no President has ever found such power in IEEPA is strong evidence that it does not exist. . . . We do not attempt to set forth the metes and bounds of the President’s authority to ‘regulate . . . importation” under IEEPA. That ‘interpretive question’ is ‘not at issue’ in this case, and any answer would be ‘plain dicta.’ . . . Our task today is to decide only whether the power to ‘regulate . . . importation,’ as granted to the President in IEEPA, embraces the power to impose tariffs. It does not”.

In ruling that President Trump did not have the power to impose tariffs under IEEPA, the Learning Resources case definitely has implications for tariff constitutionality. However, it is important to understand the application of tariff constitutionality under Chief Justice Roberts’ opinion. First, nothing in the Learning Resources case holds tariffs inherently unconstitutional; under the case, only tariffs that are not issued in accordance with proper procedure (in the case, issued under IEEPA by President Trump without Congressional action) are unconstitutional. Second, nothing in the Learning Resources case holds tariffs issued by President Trump pursuant to other statutes inherently unconstitutional; under the case, only tariffs that are not issued in accordance with proper procedure under the applicable statute (in the case, issued under IIEPA by President Trump without Congressional action) are unconstitutional.

This second point was made in a dissenting opinion in the Learning Resources case issued by Justice Brett Kavanaugh. Justice Kavanaugh stated, “Although I firmly disagree with the Court’s holding today, the decision might not substantially constrain a President’s ability to order tariffs going forward. That is because numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case – albeit perhaps with a few additional procedural steps that IEEPA, as an emergency statute, does not require. These statutes include, for example, the Trade Expansion Act of 1962 (Section 232); the Trade Act of 1974 (Sections 122, 201, and 301); and the Tariff Act of 1930 (Section 338). In essence, the Court today concludes that the President checked the wrong statutory box by relying on IEEPA rather than another statute to impose these tariffs”. In fact, immediately following the Learning Resources decision on February 20, 2026, President Trump issued new tariffs pursuant to Section 122 of the Trade Act of 1974. Responding to the above comment from Justice Kavanaugh, Chief Justice Roberts’ opinion stated in a footnote, “We do not speculate on hypothetical cases not before us”. However, in the future, the Supreme Court may have to decide other cases concerning tariff constitutionality with respect to tariffs issued by President Trump pursuant to statutes other than IEPPA.

As with any court decision, it is important to properly understand the precedential scope of the Learning Resources case (focused on tariffs under IEEPA), and the potential ability of President Trump to issue valid tariffs without Congressional action pursuant to statutes other than IEEPA. Tariff constitutionality could be resolved differently by a court in reviewing a statute other than IEEPA. Similarly, on another issue, while some commentators have viewed the Learning Resources case as authority for a general restriction on Presidential power, there is no guarantee that another case concerning Presidential power with respect to a different statute or a different subject than tariffs would not be resolved differently, including in a manner favorable to the exercise of Presidential power.

While the Learning Resources case provides important, but probably not the final, authority concerning tariff constitutionality, it definitely has clear implications on another issue – tariff refunds. The concept is that if persons paid moneys pursuant to unconstitutional tariffs, these persons should be entitled to receive refunds of their tariff payments. While Chief Justice Roberts’ opinion did not address the issue of tariff refunds, Justice Kavanaugh’s opinion did in broad terms, stating, “[T]he interim effects of the Court’s decision could be substantial. The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others. As was acknowledged at oral argument, the refund process is likely to be a ‘mess.’”

A more specific ruling regarding tariff refunds in light of the Learning Resources decision was made by United States Court of International Trade Judge Richard Eaton in the case of Atmus Filtration, Inc. v. United States, Court No. 26-01259, Case 1:26-cv 01259-RKE, on March 4, 2026. With respect to “Plaintiff” Atmus Filtration, Inc. “seeking, inter alia, injunctive and monetary relief, including a ‘refund to Plaintiff [of] all funds paid pursuant to the [Executive Orders] including where necessary reliquidation of Plaintiff’s entries, as well as interest at the legal rate”, Judge Eaton issued an “Order”, stating, “Plaintiff’s entries are among the millions of entries that were entered subject to IEEPA duties, which the Supreme Court ruled unlawful in [the Learning Resources case]. All importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision. . . . The Court was also given exclusive subject matter jurisdiction to hear claims like those presented in this case. This exclusive jurisdiction was recently acknowledged by the Supreme Court. . . . Moreover, when establishing this Court, Congress cited ‘[c]onsiderations of judicial economy, and the need to increase the availability of judicial review in the field of international trade in a manner which results in uniformity without sacrificing the expeditious resolution of import-related disputes. . . . The Constitution requires this uniformity. . . . Finally, the Chief Judge has indicated that I am the only judge who will hear cases pertaining to the refund of IEEPA duties. So there is no danger that another Judge, even one in this Court, will reach any contrary conclusions. To find otherwise would be to thwart the efficient administration of justice and to deny those importers who have filed suit the efficient resolution of their claims, and to deny entirely importers who have not filed suit the benefit of the Learning Resources decision. Accordingly, it is hereby ORDERED that, with respect to any and all unliquidated entries that were entered subject to the IEEPA duties, U.S. Customs and Border Protection is hereby directed to liquidate those entries without regard to the IEEPA duties. Any liquidated entries for which liquidation is not final shall be reliquidated without regard to IEEPA duties”.

Judge Eaton’s “Order” in the Atmus Filtration, Inc. case has been described as possibly being the largest refund directive in U.S. customs law history, estimated as involving more than 330,000 importers, over 53 million entries, and roughly $166 billion. In response to Judge Eaton’s “Order”, on March 12, 2026, Brandon Lord, Executive Director, Trade Programs Directorate, Office of Trade, U.S. Customs and Border Protection, filed a “Declaration” in the Atmus Filtration, Inc. case, stating, “CBP is developing a new capability within its system of record for imported merchandise – the Automated Commercial Environment (ACE) – to prepare to calculate and provide valid refunds of additional ad valorem duties imposed under IEEPA. This new ACE functionality is called the Consolidated Administration and Processing of Entries (CAPE). CBP is designing CAPE with four integrated components:

• Claim Portal,
• Mass Processing,
• Review and Liquidation/Reliquidation, and
• Refund

These components reflect both how CBP anticipates refund requests will proceed through CAPE and how CBP is structuring its development efforts. . . . The CAPE Claim Portal will be web-based and serve as the entry point for importers and brokers to submit IEEPA refund requests (‘CAPE Declaration’) to CBP. . . . After submission, ACE will conduct two series of validations: 1) file validations and 2) entry validations. . . . As of March 11, 2026, CBP estimates that its development of the Claims Portal component is 70% complete. . . . The CAPE Mass Processing component will automatically remove any applicable IEEPA HTS numbers from the entry summaries submitted to and validated by the CAPE Claim Portal component. . . . After the CAPE Declaration has passed through the Mass Processing component, the system accepts the CAPE Declaration. . . . As of March 11, 2026, CBP estimates that its development of the Mass Processing component is 40% complete. . . . The next CAPE component will initiate the review and liquidation/reliquidation process for the entries identified in the accepted CAPE Declaration. . . . The Review and Liquidation/Reliquidation component will update the underlying entry summaries to reflect the new total duties paid and will automatically calculate interest. . . . As of March 11, 2026, CBP estimates that its development of the Review and Liquidation/Reliquidation component is 80% complete. . . . When the entry summaries in the accepted CAPE Declaration reach the scheduled liquidation/reliquidation date, ACE will direct those entries to a CAPE-specific refund process within the ACE Collections refunds module. . . . Once processed, the refunds will be sent electronically to the designated bank account. . . . As of March 11, 2026, CBP estimates that its development of the Refund component is 60% complete. . . . CBP anticipates a phased development for CAPE, beginning with the basic functionality outlined above, and adding more functionality in subsequent phases to address more complicated scenarios. CBP expects that in its first phase of development, CAPE will be able to process the majority of formal and informal entries on which IEEPA duties were paid, other than unliquidated entries subject to antidumping or countervailing duties, or entries for which the liquidation status in ACE is ‘Suspended,’ ‘Extended,’ or ‘Under Review,’ and certain other entry types such as warehouse withdrawals, entries designated on a drawback claim, etc. CBP will provide detailed guidance to users regarding the scope and functionality of each phase of development as it is implemented”.

Perhaps the key point to note is that tariff refunds as a result of the Learning Resources decision generally will not automatically occur; instead, tariff refund claimants will need to file under the tariff refund system described in Director Lord’s “Declaration” in the Atmus Filtration, Inc. case. It has been estimated that this tariff refund system could be operational by approximately the end of April, 2026.

If you have any questions concerning tariff constitutionality or tariff refunds following the Learning Resources case, please discuss these issues with your advisers.

Note – EB-5 “September 30, 2026 Grandfathering” Date

A key date will occur this year for foreigners seeking to obtain green cards (allowing foreigners to legally live and work in the United States) under the EB-5 Immigrant Investor Program. The EB-5 Immigrant Investor Program generally offers green cards to foreigners who invest a minimum amount of $800,000 in certain projects in the United States and whose investment is used to create at least 10 full-time jobs. Most EB-5 investments are made through a “Regional Center”. However, “Regional Center” investments currently are only authorized to qualify under the EB-5 Immigrant Investor Program through September 30, 2027. While EB-5 investors should take note of this September 30, 2027 date, an even more immediate key date for EB-5 investors is September 30, 2026. If an EB-5 investor properly files an EB-5 petition by September 30, 2026, such petition will be “grandfathered” and definitely adjudicated, even if “Regional Center” investments are not extended for authorization beyond September 30, 2027 (or if there is any other adverse change in the law after September 30, 2026). While this “September 30, 2026 grandfathering” date does not guarantee approval, it avoids the risk of an EB-5 petition being denied simply because it has not been adjudicated by the time that “Regional Center” investments may no longer be authorized after September 30, 2027 (or that there is any other adverse change in the law after September 30, 2026). Very simply stated, for any foreigner considering an EB-5 investment to obtain a green card, (i) it is prudent to file an EB-5 petition by September 30, 2026, and (ii) given the time it takes to obtain necessary evidence and prepare the EB-5 petition, it is prudent to start now and commence obtaining necessary evidence and preparing the EB-5 petition.

If you have any questions concerning the “September 30, 2026 grandfathering” date for EB-5 petitions, or any other questions concerning the EB-5 Immigrant Investor Program, please discuss these issues with your advisers.

If you wish to discuss any of the above, find Pen Pal Gary’s contact info here.

Disclaimer: please note that nothing in this article is intended to be, or should be relied on as, legal advice of any kind. Neither LHBR Consulting, LLC nor Gary Stern provides legal services of any kind.