IBTBlog

The International Business Transactions Blog

Trump Seeks Alternatives After Supreme Court Tariff Ruling

By Kailea Weitz
ASU Law Fellow

The Supreme Court’s February 2026 ruling was not the end of Trump-era tariffs. It held only that IEEPA could not support the President’s “reciprocal” and “fentanyl” tariffs. Express tariff authorities remained undisturbed, including the Trade Act of 1974 Sections 122, 201, and 301, the Trade Expansion Act of 1962 Section 232, and the Tariff Act of 1930 Sections 337 and 338, with many being explored by the Administration. Several require investigations and findings to

impose. Section 232 addresses imports threatening national security; Section 337 targets unfairly competitive import methods injuring “domestic industries”, typically in intellectual property disputes; and Section 301 retaliatory authority provides imposing authority to retaliate against “unreasonable” and “unjustifiable” policies and measures that burden U.S. commerce.

President Trump’s response was immediate. On the day of the ruling, the White House issued an order terminating ad valorem duties imposed under IEEPA, but he expressly preserved those imposed under Sections 232 and 301 and imposing a 10% ad valorem tariff for 150 days under Sec 122. Plans for several 337 and 301 investigations were announced, and existing 232 and 301 tariffs on China, among others, including on steel (50%), aluminum (50%), semiconductors (25%), timber/lumber (10%), vehicles (25%), and copper (50%), remain in place.

It is not surprising that the Administration, having lost one authority for import duties, immediately pivoted to the others identified by the Court, a decision already triggering new litigation. Two dozen states have filed suit challenging Trump’s use of Sec 122, arguing no statute requirements are met. Both Democratic representatives (H.R.2459) and senators have introduced the “Reclaim Trade Powers Act” to repeal Sec 122, along with a bill to shield small businesses from Trump’s tariffs more broadly (S.1593/H.R.3986).

Meanwhile, the refund consequences of the Supreme Court’s IEEPA ruling are substantial. On March 4, 2026, Judge Richard Eaton of the U.S. Court of International Trade ordered CBP to liquidate or reliquidate entries without regard to IEEPA duties. As the judge assigned to IEEPA refund cases, his statement that “all importers of record whose entries were subject to IEEPA duties are entitled” to seek refunds is significant. CBP will reportedly use an online portal for claims. Senate Democratic Leader Schumer is urging companies to pass anticipated savings onto consumers when approximately $175 billion in refunds is received. Consumer class actions involving Costco, FedEx, and Ray-Ban have already been filed. As more than 2,000 companies file lawsuits to recoup tariff payments, more  consumer suits seeking to prevent “double recovery” will surely follow, particularly against companies that imposed itemized tariff charges.

However, one small business has publicly been advocating for a different approach by proactively and automatically refunding customers. For consumers, importers, states, and trade lawyers, the next litigation relates to which import duties adopted under other statutes will survive judicial review, and how quickly unlawfully collected duties can (and will) be refunded. Given the Republicans inactivity in Congress, it appears that Republicans wish to surrender their importation taxation authority to Trump. If their appetite for doing the same for a Democrat President is less certain, they do not appear to believe they will be bound by their own precedents.

Supreme Court: IEEPA Does Not Authorize Import Duties

By Kailea Weitz
ASU Law Fellow

In February 2026, the U.S. Supreme Court held in the combined cases Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose import duties, invalidating President Trump’s 2025 “fentanyl” and “reciprocal” tariffs. Those measures previously included a 25% duty on most Canadian and Mexican imports, a 10% duty on most Chinese imports, and baseline 10% duties on imports from all trading partners, with higher rates on dozens of countries. The tariffs were repeatedly increased, decreased, and otherwise arbitrarily modified by Trump, allegedly justified to punish states for drug trafficking and persistent trade deficits.

Before the Court, the Trump Administration argued IEEPA’s power to “regulate … importation” included tariffs because tariffs have long been used to regulate imports. The government’s merits brief contended that the phrase encompasses duties and that IEEPA continued to provide independent authority for nearly unfettered presidential discretion, despite Congress’s enactment of more specific tariff statutes, including Section 122 of the Trade Act of 1974.

The government brief also pointed to IEEPA’s legislative history as emerging from the Trading with the Enemy Act (TWEA), which authorized presidential regulation of foreign goods during wartime, and argued that IEEPA extended similar authority into presidentially declared national emergencies during peacetime. On that view, the President could deploy tariffs as an “emergency” response tool without being confined to the narrower conditions and limits of other tariff laws.

The Court rejected each argument before it. It held that IEEPA does not generally authorize the President to impose tariffs. The Court emphasized that Article I gives Congress, not the President, the power to lay duties and that no President had ever invoked IEEPA to impose any import duties despite regularly invoking IEEPA for other purposes and invoking other statutes to impose tariffs. It reasoned that if Congress had intended to delegate the “distinct and extraordinary power” to impose tariffs, it would have done so expressly, as it has in other tariff statutes. The Court noted that the Trump Administration’s position would empower the President to impose duties on “imports from any country, of any product, at any rate, for any amount of time” from “two words separated by 16 others” in IEEPA: “regulate” and “importation”.

While the ruling therefore narrowed one asserted source of presidential tariff authority, broader statutory tariff framework remains undisturbed. The Court itself pointed to other laws expressly delegating tariff powers, including Sections 122, 201, and 301 of the Trade Act of 1974. Thus, the decision is best conceptualized as a separation-of-powers holding: it foreclosed an overbroad reading of a general emergency statute without touching tariff tools Congress clearly delegated.

EU Withdrawing from the Energy Charter Treaty

By Kelsey McGillis
Law Student Editor

In July 2024, the European Union (EU) and Euratom formally announced their intention to withdraw from the Energy Charter Treaty (ECT), effective in one year. This decision follows a modernization effort to align the treaty with climate goals, yet many EU member states remain dissatisfied with the revisions. Initially, discussions among member states focused on an uncoordinated withdrawal, allowing some countries to remain in the treaty. However, the European Commission now advocates for a unified exit by the EU, Euratom, and all member states to prevent internal investor disputes and to ensure legal clarity.

Established in 1994 at the end of the Cold War, the ECT aimed to promote international cooperation in the energy sector by fostering open markets, protecting foreign energy investments, and resolving disputes between investors and host countries. The modernization process introduced significant changes, including the exclusion of fossil fuel investments and the introduction of intra-EU arbitration. However, EU countries are concerned that the updated treaty does not adequately address their environmental policies, as investment claims against such policies have created tensions. Notable cases, such as Sweden’s Vattenfall challenging Germany’s nuclear phase-out, highlight the challenge of balancing investment protections with state sovereignty to regulate environmental issues.

The EU’s decision to withdraw is rooted in the belief that the ECT conflicts with its climate objectives under the European Green Deal and the Paris Agreement. The ECT has been criticized for allowing fossil fuel companies to use its dispute mechanisms to challenge climate regulations, undermining the EU’s environmental efforts.

In May 2024, the EU officially began its withdrawal process, marking a significant step toward resolving this tension. This decision emerged from a political compromise known as the “Belgian roadmap,” enabling the EU and Euratom to exit the ECT while some member states continue to support its modernization. Several EU countries, including Ireland and Portugal, have expressed their intention to withdraw, demonstrating broad support for a unified approach. A coordinated exit would avoid legal uncertainties and provide a clearer path for advancing EU climate policies.

One major concern regarding withdrawal from the ECT is its “sunset clause,” which extends protections for foreign investments for 20 years after a member state’s exit. The EU is advocating for a coordinated withdrawal among member states to mitigate risks associated with this clause. Without coordination, remaining member states could face legal complications, including investor disputes within the EU, which could weaken a unified climate policy.

While the legal outcome of this coordinated exit remains uncertain, energy investors within the EU are advised to adopt alternative legal strategies to protect their interests. This may involve restructuring investments or negotiating direct agreements with individual member states to avoid potential regulatory challenges or litigation.

Blog Editors

Faculty Editor
Prof. Aaron Fellmeth
aaron.fellmeth@asu.edu


Law Student Editor
Kelsey McGillis
ibtblog.editor@asu.edu

IBT-Related Organizations

ABILA International IP Committee
ABILA International Investment Law Committee
ASIL Anti-Corruption Law Interest Group
ASIL Dispute Resolution Interest Group
ASIL Intellectual Property Law Interest Group
ASIL Private International Law Interest Group

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