FAQs: On The SCOTUS Tariff Ruling

Last Friday, the Supreme Court struck down IEEPA. Within hours, the White House replaced it with a new 10% global tariff under Section 122.

A lot happened fast.

I noticed a flood of operator questions across Slack, LinkedIn, and trade forums in the days after the ruling. So I did the work to answer them.

I spoke with Hugo Pakula, CEO of Tru Identity and a former trade policy advisor to Congress, and Justin Sherlock, a licensed customs broker and Co-Founder of Caspian. Between their insights and everything coming out of CBP, the courts, and the trade policy community, here's what operators need to know:

PS: Hugo and Justin are my go-to sources for tariff updates - highly recommend following them on LinkedIn.

What’s Inside:

• The Ruling Itself

• What's Happening Right Now

• Refunds

• What Comes Next

• Operational Decisions

👉️ This article is free to read

The Ruling Itself

1. What exactly did the Supreme Court rule, and why does it matter?

In a 6-3 decision, the Court ruled that IEEPA does not give the president authority to impose tariffs. The Constitution gives taxing power to Congress. IEEPA lets the president "regulate importation" during a national emergency, but the Court ruled that regulating trade and taxing trade are two different things. Since IEEPA never explicitly mentions tariffs or duties, it can't be used to impose them.

As Hugo put it: "It's not that the tariffs have anything wrong with them. You can implement tariffs, that's fine. But using IEEPA to implement them is taxing, and taxing is only for Congress."

The ruling invalidates all IEEPA-based tariffs retroactively, which is why refunds are now in play. What it doesn't change: Section 232 and Section 301 tariffs remain fully intact. And within hours of the ruling, Trump signed a new executive order imposing fresh tariffs under Section 122, making clear the tariff agenda isn't going away.

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2. Which tariffs were struck down and which ones weren't?

Two categories of IEEPA-based tariffs are now invalid:

• The fentanyl tariffs imposed in February 2025 on Canada (up to 35%), Mexico (25%), and China (20%)

• The Liberation Day reciprocal tariffs imposed in April 2025, ranging from 10% on most countries to significantly higher rates on dozens of nations

What's still standing: Section 232 tariffs on steel, aluminum, copper, lumber, automobiles, and semiconductors. Section 301 tariffs on Chinese goods. Antidumping and countervailing duties. The new Section 122 tariff.

Hugo: "232 is not affected right now. Those are still in place and it actually sounds like he's going to drive those up much more."

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3. Does this mean all tariffs are now gone?

No. This is the most important misconception to clear up.

Within hours of the ruling, Trump signed an executive order imposing a new 10% global tariff under Section 122, effective February 24. Trump subsequently announced on Truth Social his intention to raise it to 15%, the statutory maximum, but as of publication no formal executive order has been issued and CBP is enforcing 10%. On top of Section 122, both Section 232 and Section 301 tariffs remain fully in force. For many product categories, effective tariff rates today are actually higher than before the ruling.

The ruling closed one legal door. The administration immediately opened several others.

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4. Are Section 232 (steel/aluminum) and Section 301 (China) tariffs still in effect?

Yes, completely unaffected.

Section 232 covers steel, aluminum, copper, lumber, automobiles, auto parts, and semiconductors, ranging from 25% to 50% depending on the product. Section 301 tariffs on Chinese goods remain fully intact.

One thing Hugo flagged: Section 232 compliance is more complex than most operators realize. "They included yogurt," he said. "The cap on the yogurt might be made of aluminum, so now if you import yogurt, you have to calculate exactly how much of the $4 price is attributable to just the aluminum cap." 

With CBP enforcement up significantly over the past year, getting this wrong is increasingly costly.

5. What happened to the tariff deals the US negotiated with roughly 20 countries?

Effectively on hold.

Over 2025 and early 2026, the administration negotiated bilateral deals with roughly 20 countries, each with country-specific IEEPA rates. India was at 18%. China had come down to 10% after successive reductions.

Section 122 wipes all of that out. It's a flat 10% on everyone right now. Countries that faced high IEEPA rates (India, Vietnam, Thailand) actually got cheaper. Trade allies who had secured rates below 10% are now paying more.

USTR Greer has stated the deals remain in force, but the legal picture is complicated. Most were implemented as modifications to IEEPA tariffs, which no longer exist. New Section 301 investigations are expected to restore country-specific targeting once Section 122 expires.

Don't assume your country's negotiated rate still applies. Everyone is at 10% right now.

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What's Happening Right Now

6. What is Section 122, and what replaced IEEPA tariffs?

Section 122 of the Trade Act of 1974 gives the president authority to impose a temporary import surcharge to address large balance-of-payments deficits. It's been on the books for 50 years and has never been used before now.

Hugo explained the framing: "The argument is that the United States has a currency problem. The trade deficit is so bad that it's affecting the value of the dollar and the balance of payments, and so there's a national emergency."

Key parameters: 10% flat rate on all imports, 150-day limit expiring July 24, 2026, statutory cap of 15%, no country-specific rates allowed. Section 122 does not stack on top of Section 232. It does stack on top of Section 301.

Worth watching: Section 122 is already drawing legal scrutiny over whether the US trade deficit truly constitutes a "balance-of-payments crisis" under the statute. It could face its own court challenge before July 24.

7. Section 122 stacks with 301 and 232. Are my effective tariff rates actually higher now than before?

For some products, yes. For others, no.

The stacking rules:

• Section 122 does NOT stack with Section 232. If your product is subject to a 232 tariff, you don't pay 122 on top

• Section 122 DOES stack with Section 301. If you're importing from China, you pay both

Justin added important context on China: "122s are cheaper in China than IEEPA was. IEEPA was 40%+ for China." Under Section 122, China is at 10% plus existing Section 301 rates, meaningfully lower than IEEPA's peak.

For products subject only to Section 301, the effective rate went up when Section 122 was added. Run your landed cost by SKU. A blended factor across your catalog will give you the wrong answer.

One underrated point Justin flagged: Section 122 exclusions now apply to all countries, not just the handful that had exclusions under IEEPA. If your product code was excluded under IEEPA for EU, UK, or Japan shipments, check whether that same exclusion now applies to your China shipments too. For some operators this could mean rates close to pre-Trump levels on certain SKUs.

The broader pattern: trade allies got hurt by Section 122 (their negotiated deals were better than a flat 10% on everything), while major trade rivals like China actually benefited from IEEPA getting struck down and the lower 122 rate replacing it. Expect Section 301 investigations to start targeting countries beyond China, and Section 232 to expand into new commodity categories.

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8. De minimis is still suspended. What does that mean for my operations?

The suspension of de minimis treatment for low-value shipments (generally under $800) continues independently of the IEEPA ruling. It was explicitly preserved in the February 20 executive orders.

E-commerce sellers shipping directly to US consumers still face standard customs procedures and duty requirements on every shipment regardless of value. No indication this changes before July 24.

Refunds

9. Am I entitled to a refund on IEEPA tariffs I already paid?

The legal basis exists. The Supreme Court invalidated the tariffs, meaning they were collected without legal authority. Estimates put the total collected at $175-300 billion since February 2025.

The Court did not order refunds or establish any mechanism. Justice Kavanaugh's dissent explicitly warned the refund process is likely to be a "mess." 

Hugo is direct about the dynamic: "There is somewhere between $175 billion and $300 billion in refunds on the table. That's a lot of money for any government to willingly write checks on, and the incentives are clear for the government to slow-walk or complicate the process." Treasury Secretary Bessent has said the process could take "weeks or months." Plan accordingly.

Don't wait for a formal announcement. Move early.

10. How do I actually claim a refund?

First, check your ACE ES003 report to see which entries are liquidated vs. unliquidated. Your broker can pull this if you don't have direct access. That determines your path.

Unliquidated entries: File Post Summary Corrections. Your broker handles this. No legal action needed, relatively low cost. A PSC isn't an error claim. It's conforming your entry to the new legal reality that IEEPA tariffs were invalid. Ask your broker to also request accelerated liquidation to speed things up.

Liquidated entries: File a protest using CBP Form 19. You have 180 days from the date of liquidation. The earliest IEEPA entries began liquidating around mid-December 2025, meaning the first deadlines arrive around mid-June 2026. Again, your broker can handle this, relatively straightforward.

Significant exposure: File at the CIT. Hugo: “a protest sitting in the queue is not the same as being a named party before the CIT. The DOJ has indicated it won't contest reliquidation, and the CIT is expected to issue process guidance shortly. Queue position will matter once that process is set. Over a thousand cases have already been filed. This path requires a trade attorney and meaningful legal spend, so it's worth it if your IEEPA exposure runs into the hundreds of thousands or more. If you're unsure where your threshold is, that's the first question to ask a trade attorney.”

One caveat: the CIT has indicated that administrative protests may not actually be required to preserve your refund rights. But given how unsettled the process is, don't skip steps without talking to a trade attorney first.

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11. How do I pull my ACE data to know what I actually paid in IEEPA duties?

Run the ES003 report in ACE. This gives you entry-level detail on every duty paid, broken down by tariff type. If you don't have direct ACE access, your customs broker can pull it.

Pull this first, before anything else. It's the foundation for calculating your refund exposure.

Justin built a free tool that takes your ES003 file and calculates what you're owed: meetcaspian.com

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12. Who is actually the importer of record on my entries, and does that affect who gets the refund?

This is one of the most overlooked issues, and Hugo flagged it as critical.

The refund goes to the importer of record, not necessarily to your company. If you shipped via FedEx, UPS, or DHL, the courier may have filed as the IOR on your behalf. If so, the refund legally belongs to them. FedEx has already filed its own CIT lawsuit seeking a full refund of all IEEPA duties it paid as IOR. If FedEx was your IOR, your refund is now part of their litigation, not yours.

If you're a downstream merchant who paid tariff-inclusive prices to a supplier but weren't the IOR, you have no direct claim against the government. You'd need to review your contracts to see if you have a path to recover from your supplier.

Check your entry documents before assuming you're entitled to anything. Pull from ACE or use ImportYeti to confirm the IOR on each entry.

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13. What's a Post Summary Correction (PSC) and do I need to file one?

A PSC is an amendment to a customs entry that hasn't yet been liquidated. Filing one removes the IEEPA tariff charges before CBP finalizes them.

Your customs broker handles it. No legal proceeding needed. It's not admitting an error. You correctly filed under the law as it existed at the time. You're now correcting the entry to reflect that those tariffs were invalid.

File as soon as possible. Entries liquidate on a rolling basis, typically 314 days after entry. Once liquidated, the PSC option is gone.

14. My entries have already liquidated. Am I too late?

Not necessarily. You have 180 days from the liquidation date to file a protest. After that, you'd need to pursue a CIT claim directly.

The earliest protest deadlines arrive around mid-June 2026. And as Hugo noted, getting a CIT case on file now puts you ahead of the queue, not just in it. The CIT is expected to issue process guidance soon, and earlier filings will have an advantage.

Note: the CIT has indicated that protests may not be required to preserve refund rights. But given how fluid the process is, don't skip steps without talking to a trade attorney first.

15. How long will refunds realistically take?

A long time. There's no court-ordered timeline. CBP hasn't announced a process. The CIT is handling a large backlog.

There is one silver lining: Hugo flagged that any refunds held by the government accrue interest at 6% per annum from the date of entry. Every dollar is growing while you wait. On a $1 million IEEPA exposure, that's $60,000 per year in interest on top of the principal. File early, because the clock on that interest starts from your original entry date, not from when you file.

Also make sure your ACH banking information is on file with CBP. Hugo noted that CBP updated its policy in early February: all duty refunds will be issued electronically via ACH. No checks. If your banking details aren't current with CBP, your refund could be delayed or misdirected when it does come.

16. I passed tariff costs on to my customers. Can I still claim a refund?

Legally, yes. Refund rights belong to the importer of record regardless of what happened downstream.

The complication: customers may come back and ask you to share the refund if you passed costs through surcharges or price increases. Documentation matters. Trace exactly which tariff costs were passed on, to whom, and under what terms. Start building that paper trail now.

17. What about duty drawback? Can I claim back duties on goods I imported and then exported?

Yes, with one exception.

Justin confirmed: Section 122 is fully eligible for duty drawback, same as Section 301. For IEEPA tariffs already paid, drawback is also available, except for the fentanyl tariffs specifically. The reciprocal tariffs, Iran tariffs, and India oil/gas tariffs are all eligible.

If you're exporting a meaningful portion of your imported goods, talk to a drawback specialist. This is separate from the refund process and has its own filing requirements.

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What Comes Next

18. What happens after Section 122 expires on July 24?

Section 301 of the Trade Act of 1974 is how the administration plans to replace Section 122. Unlike Section 122, it allows country-specific rates, has no statutory cap, and has no 150-day limit. It's a far more durable authority and the same law behind the original China tariffs since 2018.

USTR Greer has already announced new Section 301 investigations against most major trading partners, signaling the administration wants them resolved before Section 122 lapses.

Hugo flagged that the administration could also let Section 122 expire and immediately restart the 150-day clock under a new declaration, effectively creating a perpetual temporary tariff instrument.

The timeline to model:

• Now through July 24: 10% flat under Section 122 (plus any 301/232 stacking)

• July 24: Section 122 expires unless Congress extends it

• Q3/Q4 2026: Country-specific Section 301 tariffs potentially in effect

Plan for a high-tariff environment well beyond July 2026.

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19. Could tariffs go higher again after Section 122 expires?

Yes, and potentially significantly.

Section 122 is capped at 15% by statute. Section 301 has no such cap. The original China Section 301 tariffs topped out at 25%. Hugo was direct: "It actually sounds like he's going to drive those [232 tariffs] up much more." Expansion of Section 232 to additional product categories is also being actively explored.

Don't model tariff relief. Bake in 10% as your baseline through July 24. After that, model by country. The high-tariff environment isn't going away, it's just changing its legal foundation.

Operational Decisions

20. Should I pause or accelerate shipments right now?

The in-transit exemption closes tomorrow, February 28. Goods loaded before February 24 and entered before February 28 are exempt from Section 122. After tomorrow, that window is gone.

Going forward: goods entering after February 28 pay 10% Section 122. The only remaining timing play is if Section 122 gets struck down, in which case goods sitting in bonded storage could avoid it entirely. Bake in 10% and model your margins from there.

21. I moved sourcing out of China last year. Was that the wrong call?

Probably not wrong, but the math shifted more than most expected.

Justin: "122s are cheaper in China than IEEPA was. IEEPA was 40%+ for China." Under Section 122, China sits at 10% plus existing Section 301 rates, meaningfully lower than IEEPA's peak.

The picture by sourcing country:

• China: Better off under Section 122 than IEEPA peak. Section 301 still stacks on top

• Trade allies (UK, EU, Japan): Worse off. Had negotiated IEEPA rates below 10%, now at the flat baseline

• High-IEEPA-rate countries (India, Vietnam, Thailand): Better off. India was at 18% under IEEPA, now at 10%

Justin's baseline: bake in 10% as a cost of tariffs regardless of sourcing country. Section 301 investigations targeting countries beyond China are already underway, and the flat 10% world is temporary. Don't make long-term sourcing decisions based on current Section 122 rates.

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22. Should I still be investing in FTZs and bonded warehouses under Section 122?

Yes, but the strategy is more nuanced than it first appears.

Bonded warehouses: Leave goods in if you can. Justin: "If you can leave stuff in the bonded WH, great, because 122 could get struck down and you could avoid paying the 122 tariff." Section 122 is already facing legal scrutiny. Holding in bonded storage is a legitimate hedge.

FTZs - goods admitted before February 24: This is where it gets complicated. Under Privileged Foreign Status, the duty rate locks in at time of zone admission. CBP's CSMS guidance confirms that means you pay the HTSUS subheading rates in effect when the goods entered the zone - even if those tariffs were later ruled unconstitutional. So if your goods entered the FTZ under IEEPA rates, you still owe IEEPA tariffs when you withdraw them. Justin's reaction: "wild."

The mechanism that was supposed to protect you is now locking in an unconstitutional rate. Don't withdraw goods admitted before February 24 without first talking to your FTZ operator and a trade attorney about your options.

FTZs - goods admitted after February 24: Privileged Foreign Status locks in the 10% Section 122 rate at time of FTZ entry, regardless of future changes. If Section 122 gets struck down, goods under PF status may avoid it entirely.

The longer game: if Section 122 expires July 24 and Section 301 investigations aren't complete, a gap period with lower effective rates could open up. FTZ and bonded positioning now could pay off then.

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23. CBP enforcement has increased significantly. What does that mean for my compliance risk?

Hugo has been tracking CBP enforcement activity through FOIA requests and noted a significant increase over the past year, tracking directly with the tariff escalation cycle. CBP has been targeting transshipment fraud, classification errors, and valuation discrepancies that became financially significant once tariffs hit double digits.

The DOJ named customs fraud its number two enforcement priority after healthcare fraud and created whistleblower hotlines paying 10% of recovered duties. Your warehouse staff, freight forwarder, and customs broker all know how your goods move. There is now a financial incentive for anyone in that chain to report problems.

The compliance checklist:

• Can you defend every HTS code with documentation?

• For Section 232 goods, do you have precise material composition breakdowns?

• Are all entries matched to purchase orders and invoices?

• Do you know who your importer of record is on every entry?

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24. What should I be investing in now in terms of data and automation?

Hugo's view: the tariff environment has permanently changed the ROI on customs data infrastructure. The operators who have clean data have options. Those who don't are making decisions blind.

The immediate priorities:

ACE access: If you don't have it, get it. Owning your entry data is no longer optional.

HTS classification review: Every classification needs documentation now. Manual processes are a compliance liability.

Landed cost modeling: If your ERP uses a blended landed cost factor, it's wrong for most of your catalog. You need SKU-level modeling by country and tariff scenario.

Entry monitoring: You need visibility into which entries are approaching PSC and protest deadlines. Missing those windows means losing refund eligibility permanently.

25. What should I be doing in the next 30 days?

Week 1: Know what you're owed

• Pull your ES003 report from ACE. No access? Have your broker pull it, or use Caspian's free calculator at meetcaspian.com

• Identify all IEEPA entries from February 2025 through February 24, 2026

• Flag liquidated vs. unliquidated entries

• Confirm the IOR on each entry. Check for courier-filed entries where FedEx or UPS may be listed

• Confirm your ACH banking details are on file with CBP. Refunds will be issued electronically, no checks

Week 2: File what you can

• Unliquidated entries: have your broker file PSCs immediately and request accelerated liquidation

• Liquidated entries within 180 days: file protests using CBP Form 19

• Significant exposure: consult a trade attorney about CIT filing now. The DOJ won't contest reliquidation. Get in the queue early

• Remember: every dollar held by the government accrues 6% interest from your original entry date. Earlier filing means the clock is running in your favor

Week 3: Assess your FTZ and bonded warehouse position

• Goods in bonded storage: evaluate whether to leave them given Section 122's uncertain legal footing

• New FTZ admissions after February 24: confirm PF status procedures are in place with your FTZ operator

• Model your full catalog exposure at 10% Section 122

• Review your customs bond sizing. IEEPA inflated import values and pushed bond requirements up. With IEEPA gone and Section 122 at 10%, you may be over-bonded and paying excess premiums. Ask your broker to review

Week 4: Compliance check

• Audit HTS codes for your top 50 SKUs by duty spend

• Check Section 122 exclusion codes. Justin flagged that Annex III exclusions now apply to all countries, not just IEEPA partner countries. Some operators may qualify for significantly lower rates on certain SKUs

• Verify material composition documentation for products with Section 232 exposure

• Confirm your customs bond is appropriately sized for current duty levels

The one number to hold onto: 10% is your baseline through July 24. After that, model by country. The high-tariff environment isn't going away, it's just changing its legal foundation.