Supreme Court Rules Against Reciprocal Tariffs: Eide Bailly Factsheet

The US Supreme Court recently struck down the federal government’s “reciprocal” tariffs in a 6 to 3 vote. The reciprocal tariffs are those imposed under the International Emergency Economic Powers Act (IEEPA) which encompass the country by country tariffs levied on most US trading partners in early 2025.

Importantly, the ruling is limited to IEEPA tariffs. It does not affect tariffs imposed under other trade statutes, such as Section 232 national security tariffs (which include those on steel, aluminum, and copper), Section 301 tariffs targeting unfair trade practices (those on Chinese electric vehicles, solar cells, and other technology products), or temporary Section 122 tariffs targeting trade imbalances or currency manipulation.

When is the decision effective?

The decision is effective immediately, meaning that IEEPA tariffs may no longer be levied legally by Customs and Border Protection. However, the administration is expected to actively pursue alternative measures to apply similar or substitutive tariffs under different legal authority.

In fact, mere hours after the ruling, President Trump announced “an order to impose a 10% global tariff under Section 122 over and above our normal tariffs already being charged,” and that the administration is “also initiating several Section 301 and other investigations to protect our country from unfair trading practices of other countries and companies.”

What is the legal basis for the Supreme Court's ruling?

The Court ruled that:

• Congress did not clearly authorize the President to impose tariffs through IEEPA.
• The statute permits the President to “regulate” imports during a national emergency but does not expressly allow the Executive to impose new taxes or tariffs.
• The scope, duration, and economic impact of the reciprocal tariffs required explicit congressional approval in accordance with the US Constitution’s separation of powers principles.

What’s Next

One of the most important questions raised by the ruling is that of refundability of IEEPA tariffs paid by importers prior to today’s ruling. The decision did not explicitly address whether and how refunds will apply, but importers subject to IEEPA tariffs should:

• Coordinate with customs brokers to ensure immediate cessation of IEEPA tariffs on invoices.
• Contact advisors and legal counsel to determine whether to file a protest against previously-paid IEEPA tariffs, as refunds (should they apply) will likely not be automatic and will be subject to statutory deadlines.

We note that refunds may also have complex interactions with other areas of taxation, including how multinational enterprises allocate refunds between US and foreign affiliated entities who may have shared tariff expenses through transfer pricing policies.

Eide Bailly is closely monitoring these developments and is working with customs expert partners to promote optimal outcomes for our clients.