Supreme Court Skeptical of IEEPA Tariffs During 3-Hour Argument on November 5, but Outcome and Potential Refund Process Remain Uncertain

Butzel continues to stay on top of developments in the ever-changing trade and tariff landscape—that is precisely why Butzel’s Mitch Zajac attended the US Supreme Court oral argument in Washington, DC regarding President Trump’s tariffs implemented under the International Emergency Economic Powers Act (“IEEPA”)—the so-called “Fentanyl Tariffs” and “Reciprocal Tariffs.” The importance of the Supreme Court’s ruling in Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc. cannot be understated. On Wednesday, November 5, 2025, in a packed courtroom, the Supreme Court heard nearly three hours of oral argument about whether IEEPA allows President Trump to unilaterally overhaul the country’s tariff regime was an overstep of his authority in using the statute to impose sweeping levies. In addition to our usual recap, Mr. Zajac, as a new member of the Supreme Court bar of practicing attorneys, has provided some “you had to be there” insights.

Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and key members of Congress also attended the argument.

For the nearly three hours of questioning (more than doubling the normally allotted 80 minutes of argument time), Justices focused pointed questions on several key issues raised by the Government and by the tariff challengers, including:

• The extent of the authority granted by Congress, and whether it included the authority to tax/tariff as a means to “regulate . . . importation”;
• Whether and to what extent IEEPA was intended to limit presidential authority during times of “unusual and extraordinary threat[s]”;
• How the statute could be reconciled in view of precedent governing Section 232 of the Trade Act, which allows for tariffs to “adjust imports”, and the Trading With Enemies Act (“TWEA”), when the US Court of Appeals for the Federal Circuit upheld President Nixon’s implementation of a 10% global tariff as valid under TWEA, and Congress subsequently drafted IEEPA with the same language;
• What Congress meant when it enabled the President to use a “license” as “means” to “regulate” “importation”;
• Whether the President’s exercise of sweeping tariff authority under IEEPA to impose tariffs on any and all countries of unbounded amount, scope, and duration violates:

(1) the non-delegation doctrine, which requires that any delegation to the executive branch of congressional powers, including core powers under Article I of the Constitution to raise revenue, “lay and collect Taxes, Duties, Imposts and Excises”, and “regulate Commerce with foreign Nations”, must be accompanied by an “intelligible principle” to guide and prevent unfettered use of the exercise of the power; and/or

(2) the recently developed major questions doctrine, which requires that Congress must grant the executive branch clear and explicit authorization to take actions of “vast economic and political significance” and presumes that executive actions taken without such explicit authorization are invalid;

• and more.

The Government’s key position is that there is a “natural”, “historical”, and “common sense” pedigree that to “regulate . . . importation” inherently means use of tariffs. The Government, time and again, indicated that the tariffs were not tariffs to tax, but instead were tariffs to regulate, where the most effective implementation of the tariffs would have actually been if the Government never received revenue at all. Instead, the Government contends that the most effective implementation of the tariffs was the threat and implementation of tariffs being enough to change the behavior of countries around the world to curb the alleged emergency resulting from trade imbalances and fentanyl imports, as determined by the President. The Government contends that the history of tariffs being used as the tool to regulate imports dates back as far as Abraham Lincoln’s licensing requirements on the import of cotton from Confederate states during the Civil War.

Of course, the tariff challengers disagreed. As counsel put it, the inability of the President to use a tariff (or tax) to regulate imports is not a “donut hole” in the economic powers conferred to the President under IEEPA; instead, “it’s a different kind of pastry” altogether. The tariff challengers went on to explain the meaning of this metaphor—that IEEPA’s only mechanisms for regulating imports were limited by the language of IEEPA, which only references investigating, blocking, regulating, directing, compelling, nullifying, voiding, preventing, and prohibiting as means to regulate imports. Absent from that list is the action of imposing tariffs, duties, taxes, or other revenue-generating measures. The tariff challengers contend that this is for good reason—the power to impose tariffs (tax) is something different than the power to regulate in the ways listed in IEEPA.

The Supreme Court will sort out which legal theory prevails. Chief Justice Roberts Jr., Justice Barrett, and Justice Gorsuch are likely to be the deciding votes. They all expressed skepticism of the IEEPA tariffs, but they grilled both sides with tough questions.

With the expedited schedule for these cases, the Supreme Court’s decision could be issued by the end of this year, and will be issued by no later than the end of June 2026.

The stakes are highest for those currently paying the tariff bills—importers of foreign goods covered by the Fentanyl and Reciprocal tariffs, including American businesses and consumers. Should the Supreme Court rule with the Government, the tariffs will continue. If not, the tariffs will stop under IEEPA and importers of record who have paid the tariffs will begin looking at ways to receive refunds.

Should this happen, the process could be long and complicated. Indeed, Justice Barrett recognized that a refund process could be “a mess”. As noted in our September 2, 2025, Client Alert, importers should not expect that refunds will be automatic. Rather, importers would likely have to take action to claim a refund in one of two ways: (1) through a US Customs and Border Protection claims process; or (2) by submitting Post-Summary Corrections of unliquidated entries and/or Protests of liquidated entries within 180 days to claim refunds.

Butzel attorneys stand ready to help our clients submit refund claims if and when the time comes. We have significant experience with the Protest process and can assist clients in preparing and filing Protests with Customs.

Since President Donald Trump began implementing his widespread use of tariffs during his first term, Butzel’s International Trade, Tariffs and Customs Specialty Team, first anchored by Catherine Karol and Mitch Zajac, has been providing up to the minute news and analysis, through Client Alerts, webinars and numerous other forums.  With the explosion of new and more expansive tariffs soon after President Trump’s second inauguration, the Butzel Specialty Team has grown to include seasoned international trade practitioner Jennifer Smith-Veluz and others. The Butzel Specialty Team is available to assist in dealing with tariffs and related issues. Please visit our Tariff and Trade Resource Center for additional up-to-date news on tariffs, trade, and business implications. We encourage you to reach out to the authors or your Butzel attorney for further information.

Mitchell Zajac
313.225.7059
zajac@butzel.com

Jennifer M. Smith-Veluz
202.454.2885
smithveluz@butzel.com

Catherine M. Karol
313.225.5308
karol@butzel.com