Tariffs Out of Fashion? What the US Supreme Court’s IEEPA Skepticism Means for Fashion and Preserving Rights to Refunds

From the questioning, several justices appeared skeptical that IEEPA authorizes across‑the‑board tariff hikes. For fashion and retail importers, now is the moment to take steps to preserve refund rights in case SCOTUS ultimately invalidates IEEPA tariffs imposed on all importers. Given the importance of this case, a decision is anticipated by the first quarter of 2026 but could arrive as early as year‑end. More details appears in our latest alert and we will provide updates on any developments in our monthly trade newsletter accessible here.

Authority for Tariffs Questioned

The Court probed several legal frameworks, including close textual readings of “regulate…importation,” separation of powers concerns, statutory and legislative history, reviewability of the emergency declarations, and the implications of relief. The justices largely side-stepped the underlying emergency findings and instead focused on whether IEEPA authorized the imposition of tariffs. Although several justices appeared skeptical of the IEEPA tariffs, no single legal theory dominated. It is also possible that if the SCOTUS decision is favorable, the relief may be limited in scope or confined only to the plaintiffs, although we remain cautiously optimistic.

Reimbursement Could Get Messy and Fashion Companies Should Continue Tariff Mitigation Strategies

Even if SCOTUS issues a favorable decision to the petitioners and allows refunds of duties paid, importers will likely need to take proactive measures to obtain refunds, and it may take some time to see relief.

During the oral arguments, Justice Amy Coney Barrett highlighted the complexity of a potential refund process and suggested that reimbursement “could be a mess.” Depending on SCOTUS’ decision, billions in tariff revenue could be returned to thousands of importers. Respondents acknowledged the difficulty in processing refunds but noted several options.

1. Class action suits.

2. Existing administrative procedures.

3. Stay pending congressional action.

4. Limited prospective relief.

If SCOTUS invalidates the IEEPA tariffs, it is likely that the decision regarding the refund methodology will be remanded to the Court of International Trade or US Customs and Border Protection (CBP).

We are fairly certain that the Administration will invoke other tariff statutes (e.g., Section 338 of the Tariff Act of 1930 or Section 122 of the Trade Act of 1974) to reimpose tariffs retroactively or seek retroactive authorization from US Congress. Thus, fashion companies should continue to implement legal tariff mitigation strategies, as we outlined in our alert.

How Companies Can Prepare for Potential Refunds

Given the uncertainty surrounding both the future of the IEEPA tariffs and any refund methodology, AFS recommends importers who have paid these tariffs to take immediate steps to preserve their rights to a refund and prepare for potential repayment.

• Access Your Import Data: Importers should identify and maintain data on all relevant entries subject to the IEEPA tariffs. Much of this information is easily accessible in the Automated Commercial Environment. We are assisting many companies with obtaining accounts — you do not want to wait until the SCOTUS decision is made because importers will be inundating CBP with requests for accounts.

• Identify Entries Eligible for Refund: Identify the relevant IEEPA Chapter 99 classification under the Harmonized Tariff Schedule of the United States. We have developed a Chapter 99 database to help clients identify entries that may be eligible for refunds.

• Monitor for Liquidation: Protests may only be filed for up to 180 days after liquidation, pursuant to 19 U.S.C. § 1514. While most entries liquidate on a 314-day schedule, some entries may liquidate sooner and thus the protest deadlines may be sooner than anticipated.

• Prepare for Possible Protests: Importers will likely need to file protests to preserve their rights to refunds. Since the IEEPA tariffs were imposed earlier this year, there are likely still several months before the deadline for most protests. If SCOTUS does not issue a decision by the time the 180-day protest deadline nears, importers should consider filing protective protests to preserve their rights.

At this time, we are not recommending that companies request an extension of liquidation because our understanding is that CBP is not granting these requests. In addition, at this stage, we believe that filing independent cases to challenge the legality of the tariffs is preliminary — importers have a two-year statute of limitations.

How We Can Help

ArentFox Schiff has extensive experience in advising and representing fashion and retail companies in matters involving duty mitigation as well as refunds. We are monitoring developments closely and will provide additional guidance once the Supreme Court issues its final decision. Please contact the authors with any questions regarding how to mitigate the effects of the tariffs and preserve your rights to possible refunds.