Following today’s landmark ruling by the Supreme Court of the United States on the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, the International Trade Institute has issued the following statement.
IEEPA is a U.S. federal law enacted in 1977 that allows the President of the United States to regulate certain international economic transactions after declaring a national emergency. Traditionally, it has been used as the legal basis for sanctions programmes, including asset freezes, prohibitions and restrictions on dealings with designated countries, entities, and individuals.
IEEPA was recently used as the legal authority for imposing broad-based tariffs on imports. In its decision today, the Supreme Court ruled that IEEPA does not provide the President with the authority to unilaterally impose tariffs, reasserting that tariff-setting powers rest constitutionally with Congress.
“IEEPA has traditionally been a sanctions and emergency economic tool, not a tariff instrument. Today’s ruling provides legal clarity and reinforces that only Congress can set tariffs. U.S. importers may face uncertainty regarding refunds for duties already paid, while foreign exporters could regain competitiveness in the U.S. market. However, the administration still has other trade tools, such as Section 232 and Section 301, that could maintain tariff pressure. The key message for businesses: trade policy can change quickly, and understanding the legal basis of trade measures is essential”, Fiona Luciani, Managing Director of the International Trade Institute.
What This Means for Businesses?
For U.S. Importers
Potential eligibility for duty refunds (subject to administrative guidance)
Continued compliance obligations for sanctions and other trade measures
Need to monitor future legislative or executive action
For Foreign Exporters
Possible restoration of price competitiveness in the U.S. market
Renewed contract negotiations or market re-entry strategies
Ongoing exposure to alternative U.S. trade remedies
The International Trade Institute is a centre of excellence for international trade education.
For further information or commentary, please contact the International Trade Institute.
Fiona Luciani
Fiona.luciani@internationaltradeinstitute.com
+353876560111