Breakdown of Supreme Court Oral Argument in the Tariff Cases and What Importers Should Be Prepared For, No Matter the Outcome

The Supreme Court held a marathon, nearly 3-hour oral argument yesterday, in what could be the most economically-impactful cases this Term: Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections (the “Tariff Cases”). The Court will decide: (1) whether the International Emergency Economic Powers Act (IEEPA) authorizes the president to impose tariffs; and (2) if so, whether the statute unconstitutionally delegates Congress’s legislative authority to the president. President Trump is the first president to attempt to exercise tariff authority under IEEPA. This assertion of authority, and President Trump’s imposition of sweeping tariffs on U.S. global trading partners, has resulted in a dramatic shift in the international trade landscape. Although lower courts have held that the IEEPA tariffs are invalid, those rulings have been on pause at the request of the federal government while the case has been pending at the Supreme Court. Thus, the IEEPA tariffs have remained in effect.

Uncertainty Remains After Oral Argument, Though Several Justices Were Skeptical of the Administration’s Position

Although a number of the justices showed skepticism towards the Administration’s position, difficult and technical questions were asked of both sides and uncertainty remains about how the Court will decide the case. In particular, Chief Justice Roberts and Justice Barrett appear to be two key votes based on their tough questioning of both sides at oral argument. While Justice Kavanaugh is sometimes characterized as another vote in the “middle” of the Court, based on yesterday’s oral argument, he may be a stronger vote for the Administration, suggesting at times that this exercise of the tariff power is not “unheralded” or novel. Justice Gorsuch, by contrast, seemed more potentially sympathetic to the tariff challengers, raising concerns about separation of powers, the major questions doctrine, and the potentially problematic delegation of Congress’s taxing authority to the president. Like Justice Kavanaugh, Justices Thomas and Alito appeared open to the assertion that these tariffs fall within power delegated under IEEPA. By contrast, Justices Sotomayor, Kagan, and Jackson appeared hesitant to accept that the term “regulate” in IEEPA provides the president with tariff powers.

Time to Decision? This Case Could be Decided on an Expedited Timeline

It was also apparent that the justices were aware of the potentially complex refund process if the tariffs are invalidated, as well as the case’s potential impacts on ongoing trade negotiations. If the Court views the uncertainty over the tariffs’ legality as impeding those efforts, it may attempt to decide this case more quickly than usual—consistent with it having set a highly expedited schedule for briefing and oral argument. While it is always difficult to predict timing, for a case of this magnitude, it would not be surprising for the Court ordinarily to issue an opinion in May or June 2026, close to breaking for its summer recess. Here, however, the Court may attempt to issue an opinion sooner. That said, given the nature and complexity of the issues, it would be surprising to see an opinion much before January or February 2026. In any event, we expect the Court will hand down its decision before its summer recess. The last currently scheduled opinion hand-down date is June 25, 2026—although the Court can add additional dates as it sees fit.

What Importers Should Prepare for if the Tariffs Are Invalidated – The Liquidation Process

Because the IEEPA tariffs have largely remained in effect while their legality has been considered by the courts, if the Supreme Court invalidates the tariffs, then importers may need to protest their liquidations for overpayment of customs duties. It is therefore vital that importers understand the tariff liquidation process and potential recourse (duty refunds) if the Supreme Court rules for the challengers and invalidates the tariffs. The government has indicated to lower courts that, if invalidated, the duties collected under the IEEPA tariffs can be refunded to importers. Thus, importers should be ready to act quickly and aggressively because this refund process for overpayments could be complex, lengthy, and subject to strict deadlines regarding when importers must take certain actions.

The initial duties paid when goods enter the United States are considered estimates until an entry “liquidates.” Liquidation occurs when U.S. Customs and Border Protection (CBP) finalizes the amount owed by the importer and determines whether the estimated amount paid at entry was accurate. CBP generally liquidates an entry within one year of the date a good is imported.

Once CBP liquidates an entry, the only currently available remedy for an importer is to file an administrative protest—which must be done within 180 days of the liquidation date. CBP can then deny or approve that protest. If the protest is denied, the importer can then file a civil action in the Court of International Trade within 180 days.

To the extent importers have entries subject to the IEEPA tariffs that have liquidated or may liquidate while awaiting a Supreme Court opinion, they should consider filing a protest to protect and preserve their potential claims for refunds. Additionally, given that this process for recovery could take a substantial amount of time, parties to contracts should consider cost-sharing mechanisms for tariffs, allocation of funds in the event of refunds, and responsibilities for legal costs associated with protests and refund recovery efforts. Indeed, importers should also ensure that their paperwork is in order and that they can distinguish between potentially invalid IEEPA tariffs and, for example, other tariffs imposed pursuant to other statutory authorities.

Although some of the justices’ questions at oral argument took note of the complexities of this process, questions about the process of refunds are outside the scope of the issues presented for the Court’s decision in the pending cases.

Even if the Supreme Court Invalidates the Tariffs, Could They Continue or be Re-Issued in Another Form?

Even if the challengers prevail and the Court holds that the tariffs are invalid, the president may have other avenues to impose tariffs to advance his foreign policy agenda. For example, one provision under Title 19 (Section 122) expressly allows the president to impose “duties” of up to 15% (or quotas) to address “fundamental international payment problems,” including to deal with “balance-of-payment deficits.” However, this authority is time-limited to only 150 days, and any extension would require an act of Congress. Sections 201 and 301 of the Trade Act and Section 232 of the Trade Expansion Act also likely authorize the Executive Branch to impose tariffs under certain statutory conditions, but, again, require more process (e.g., investigations and findings, which would take more time).

If The Tariffs Are Upheld, What Should Importers Be Prepared For?

In the event the Supreme Court upholds the tariffs, companies should be proactive in determining tariff impacts on their supply chain and operations and should continue to explore and implement mitigation strategies. For example, these may include:

• Reviewing existing contracts (including but not limited to supply contracts, EPC contracts, and project development agreements) to understand contractual liability and long-term risk from fluctuating tariffs;
• Renegotiating existing contracts with suppliers, customers, and other counterparties to address cost-sharing or fund allocation responsibilities;
• Reviewing import classifications, country-of-origin determinations, and other import practices to ensure tariffs applied at entry are correct;
• Assessing domestic or alternative supply sources to avoid impacts from payment of duties; and
• Analyzing the effect on short- and long-term operations, including impacts resulting from delays or disruptions in the supply chain.

CBP is responsible for tariff enforcement and is required to refer possible civil or criminal violations to the Department of Justice for further investigation and possible prosecution and litigation to impose penalties. Companies should be aware of the civil and criminal liability risks, which we have written about previously here and should be proactive about conducting internal compliance assessments and defending against any investigations.

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For additional insights we have written previously on the tariffs, their impacts on energy markets, what importers should know, and the risks of criminal and civil enforcement under this tariff regime, click here.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.