U.S. Customs to Stop Collecting Emergency Tariffs Following Supreme Court Decision

The U.S. Customs and Border Protection (CBP) has announced that it will stop collecting tariffs imposed under the International Emergency Economic Powers Act (IEEPA) beginning at 12:01 a.m. EST (0501 GMT) on Tuesday. The move follows a recent ruling by the Supreme Court of the United States that declared the duties unlawful.

The agency confirmed the change in a notice issued through its Cargo Systems Messaging Service (CSMS), stating that all tariff codes tied to earlier IEEPA-related orders from Donald Trump would be deactivated. CBP did not explain why the halt comes several days after the court’s ruling took effect, nor did it outline how importers who paid the now-invalid tariffs will receive refunds.

Officials clarified that the suspension applies strictly to tariffs imposed under IEEPA. Other trade measures, including duties under Section 232 for national security concerns, Section 301 actions addressing unfair trade practices, antidumping and countervailing duties, and a recently introduced global tariff under Section 122 of the Trade Act of 1974, remain in force. The agency said additional updates for businesses would be communicated through future CSMS notices.

Supreme Court Rejects Use of Emergency Powers for Broad Tariffs

The policy shift follows a closely watched decision issued Friday by the Supreme Court, which struck down the administration’s use of IEEPA to impose sweeping import duties. The law, enacted in 1977, grants the president authority to respond to national emergencies affecting the economy, but the court ruled that it does not permit broad import taxes without a clearly defined and immediate foreign threat.

Writing for the majority, Chief Justice John Roberts concluded that the tariffs exceeded congressional intent and violated constitutional limits on executive authority. The ruling invalidated a range of measures, including so-called reciprocal tariffs ranging from 10% to 50% and fentanyl-related duties introduced in February 2025.

The decision dismantled a policy framework that had generated an estimated $175 billion to $179 billion in revenue since early 2025. According to the Penn-Wharton Budget Model, which analysed import data across more than 11,000 product categories and 233 countries, IEEPA-based duties had been collecting roughly $500 million daily.

Historical customs data produced similar estimates, placing total collections within the same range. CBP’s last reported assessment for IEEPA tariffs in December 2025 stood at $133.5 billion, though net collections typically fall after adjustments, protests, and reimbursements.

Administration Responds With Alternative Tariff Measures

The ruling prompted an immediate response from Trump, who announced a temporary global tariff under Section 122 of the Trade Act of 1974. Initially set at 10%, the measure was later increased to 15%, which represents the highest rate permitted under the statute without congressional approval for a period of 150 days.

Administration officials framed the new policy as necessary to maintain negotiating leverage in international trade discussions. Jamieson Greer, the U.S. Trade Representative, emphasized that the court’s decision applies only to IEEPA-based duties and does not undermine existing trade agreements negotiated by the administration. He maintained that international partners remain engaged in ongoing negotiations despite the legal developments.

Refund Claims Could Trigger Major Fiscal Impact

Importers who paid tariffs under the invalidated policy are now eligible to seek reimbursement through CBP. The process is expected to involve formal protests or refund claims, each subject to administrative review, which could take months or even years to resolve.

A full refund of $175 billion to $179 billion would represent a significant financial obligation for the federal government. Such a payout would exceed the combined fiscal year 2025 budgets of the U.S. Departments of Transportation and Justice.

Treasury officials have expressed confidence in the government’s ability to manage potential repayments. Scott Bessent previously stated in comments to Reuters that the Treasury could cover refunds using projected cash reserves, which are expected to reach hundreds of billions of dollars.

The refund process may also have broader economic effects. Businesses in sectors such as steel, automotive manufacturing, and consumer goods could recover substantial payments, potentially improving liquidity and financial performance. However, administrative bottlenecks at CBP could slow distribution.

Broader Implications for Trade Policy and Regulation

The Supreme Court’s ruling represents a significant limitation on presidential authority to impose broad tariffs under emergency powers, reinforcing Congress’s primary role in shaping trade policy. Going forward, the administration may need to rely more heavily on other legal tools, such as Section 232 and Section 301 investigations, which require more detailed evidence and procedural steps.

The decision also introduces uncertainty for international trade relationships. Countries including the European Union, the United Kingdom, Japan, and South Korea, which had negotiated preferential trade arrangements, now face questions about how those agreements may evolve under revised tariff policies.

At the same time, the administration has signalled a shift toward more targeted trade actions, including new Section 301 investigations covering industries such as pharmaceuticals, industrial manufacturing, forced labour practices, and digital services taxation. While these measures may offer a more durable legal basis, they could still trigger retaliatory responses from affected nations.

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Global Reaction and Market Uncertainty

International reactions to the ruling have been mixed. China’s Ministry of Commerce described the decision as a step toward fairer trade practices, while European officials expressed optimism that the ruling could reduce tensions in transatlantic trade relations.

However, the possibility that the United States could reintroduce tariffs under alternative legal authorities leaves open the risk of renewed trade disputes. Analysts warn that further policy shifts could escalate global economic friction if trading partners respond with countermeasures.

For importers, the ruling provides a path to financial recovery but also creates short-term uncertainty. Legal experts expect a surge in refund claims and potential class-action cases, particularly from smaller businesses seeking compensation for duties paid under the invalidated policy.