Wipfli Analysis: Supreme Court Rules President Can't Impose Tariffs Under IEEPA

News provided by

Feb 20, 2026, 18:06 ET

MILWAUKEE, Feb. 20, 2026 /PRNewswire/ -- Wipfli, a national accounting and advisory firm, is advising businesses to closely evaluate tariff exposure following today's decision by the Supreme Court of the United States ruling that President Trump lacks the legal authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA).

The Court ruled that the executive branch exceeded its authority by using IEEPA to impose sweeping, broad-based tariffs. In a 6-3 decision invalidating the "Trafficking Tariffs" and "Reciprocal Tariffs" that had been in place since early 2025, Chief Justice John Roberts emphasized a core constitutional principle: The power to tax, including the imposition of tariffs, resides with Congress, not the President.

While this decision removes IEEPA tariffs being charged on U.S. imports, tariffs will continue to be paid. With the likely next step being Section 122 tariffs, most effective tariff rates may stay similar. Overall, tariff uncertainty is not over, and many businesses may continue paying comparable amounts in duties.

What was the Supreme Court ruling on IEEPA?

According to Wipfli's analysis, the Court's reasoning centered on:

Statutory language: IEEPA's authority to "regulate" or "prohibit" imports during a national emergency does not implicitly include the power to levy taxes or duties.
Major questions doctrine: A policy impacting trillions of dollars in trade is a "major question" requiring explicit congressional authorization, which IEEPA lacks.
Separation of powers: The ruling serves as a constitutional guardrail, preventing the executive branch from unilaterally rewriting the U.S. Harmonized Tariff Schedule under the umbrella of a national emergency.

How does the Supreme Court tariff ruling affect businesses?

For businesses, the ruling means:

IEEPA tariffs will no longer be in effect. However, other tariffs, such as those imposed under Section 232, Section 301 and general tariff duties, are not impacted by this court ruling and remain in effect. Those tariffs have already been upheld by the appropriate court.
Refund status is still unclear. The Supreme Court did not say anything in its ruling on the issue of refunds.
Tariffs aren't going away. The Trump administration has already developed a "Plan B" to pivot to existing trade laws to maintain some level of tariffs. In the short term, Section 122 allows a President to impose a 15% tariff immediately on any country for up to 150 days. The administration has also prepared tariff petitions under Section 301 on individual countries and Section 232, targeting specific goods.
You may start seeing lower tariffs, but the administration will pivot: While refunds are not decided and could take months or years to materialize, importers of record may begin to see goods imported without IEEPA tariffs. In some instances, this could be lower overall tariff rates. A Section 122 announcement could mitigate any lower tariffs, and it's important to remember that all other tariffs under Section 232, Section 301 and general rates remain in effect.

Can businesses get refunds for IEEPA tariffs?

Currently, there is no ruling on whether businesses will be given refunds for IEEPA tariffs.
In Justice Kavanaugh's dissenting opinion, he did note that "Refunds of billions of dollars would have significant consequences for the U.S. treasury. The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a 'mess' as we acknowledged at oral arguments."

Will new tariffs replace IEEPA tariffs?

While IEEPA tariffs have been invalidated, the administration is expected to pivot to other tariff vehicles quickly.
The administration has indicated previously that they are looking at Section 122, with both President Trump and Kevin Hassett, the Director of Economic Council, stating they are considering a 10% tariff initially.

Wipfli's recommended next steps

For businesses navigating the impact of this pivotal ruling, Wipfli recommends:

Watch for IEEPA tariffs on imports: If you have goods that are being imported in the coming days or weeks, you should take note of any IEEPA tariffs charged. As soon as Customs and Border Protection has the details on removing the tariffs, IEEPA tariffs will no longer be charged on goods.
Talk to your suppliers: All businesses should speak with their suppliers about imports in the supply chain, the HTS codes they are using to enter goods into the U.S. and which tariffs they are paying, meaning Section 301 tariffs, Section 232 tariffs or IEEPA tariffs. Make sure all suppliers are aware of the Supreme Court decision to help ensure that you don't pay IEEPA tariffs going forward.
Stay strategic: Customers may reach out to you asking for price adjustments down to this ruling. Make sure you know your data and the impact on your business of the new Section 122 tariff that is being imposed. Note which tariffs you are paying for each good and explain to your customers that although the IEEPA tariffs are no longer in effect, all others are, and your prices for imports have not declined.

Wipfli's tariff and trade specialists continue to monitor developments and advise businesses on tariff exposure, compliance requirements and strategic cost management as trade policy evolves. Contact Wipfli's tariff and trade team for more details on tariff exposure and trade dynamics.

Read more:

About Wipfli
Wipfli is a leading national advisory and accounting firm with nearly 100 years of experience serving ambitious middle-market organizations. We understand our clients' unique challenges and help them succeed on their terms through assurance, tax, advisory, outsourcing and technology services. With 3,000+ associates and global alliances, we combine national capabilities with local relationships. Wipfli operates under an alternative practice structure: Wipfli LLP, a licensed CPA firm, provides attest services, while Wipfli Advisory LLC, a non-CPA firm, delivers business advisory and non-attest services. Learn more at wipfli.com or contact Alicia O'Connell at [email protected].

SOURCE Wipfli