By Jill Hurley and Tony Troia
They say a picture is worth a thousand words. But what’s a word worth?
Imagine attempting to ascribe a monetary value to a word like points in a game of Scrabble. In that most famous of board games, the word “regulate” is worth nine points. The word “adjust” is worth 14 points.
But in the real world, “regulate” is worth $90 billion. That’s the amount of revenue collected by U.S. Customs and Border Protection (CBP) between February and October of 2025 from U.S. businesses through the IEEPA tariffs imposed through executive order.
That’s because IEEPA allows the president to “regulate” trade, rather than just make adjustments. That was the heart of the argument made by the government’s defence counsel during the Supreme Court hearing on Nov. 5. And discussion over “regulate” and “adjust” went on for a prolonged period of time.
To businesses impacted by the tariffs, such semantics may be vexing. They’re doling out billions collectively while lawyers argue over technicalities. But it’s those technicalities that will ultimately decide whether the IEEPA tariffs are lawful or not, and whether or not they may be able to get back the duties they’ve already paid.
What happened at the hearing?
One of us (Tony) had the privilege of attending the Supreme Court hearing in person as he is a member of the Supreme Court bar. During the hearing, the justices grilled both parties on their respective positions. Tony was able to capture the facial expressions, body language and dynamics in the room as the justices questioned counsel for both parties.
The government’s position: The IEEPA tariffs shouldn’t be viewed as a revenue generator, but rather a tactical tool the government is employing to compel other countries to agree to more favorable trade terms. As such, it falls under Article 2 of the Constitution, which delegates power to the Executive, which is responsible for keeping up foreign relations. To reinforce his point during his rebuttal, counsel for the government Solicitor General D John Sauer, noted the government of China had recently agreed to crack down on fentanyl smuggling to the U.S. in exchange for lower tariffs (and other concessions).
He argued that IEEPA allows the president to “regulate” trade through the use of tariffs. However, he was challenged by a number of Supreme Court justices who noted that the type of trade allowed through IEEPA was related to actions such as absolute volume quotas, or sanctions, but not tariffs.
The plaintiffs’ position: The IEEPA tariffs are unlawful because no president had ever used IEEPA to impose tariffs previously and there is no mention of tariffs anywhere in IEEPA. Counsel for the plaintiffs argued that while foreign relations may be under the president’s purview, tariffs are paid by American businesses (and, arguably, by consumers, albeit indirectly). Transferring this power to the executive would leave a core tenet of economic policy to the whims of the president, citing the recent example of President Donald Trump’s threat to impose a new 10% tariff on Canada in response to an anti-tariff commercial commissioned by the Government of Ontario that ran during the World Series.
Beyond legalese
For those outside the legal community, the Supreme Court hearing on November 5, 2025, might seem like an enigma and not particularly relevant. But the outcome of this case has far reaching implications on all businesses (even those that don’t import or export directly), because the cost of the IEEPA tariffs seep into every link of the supply chain. Precisely how the justices interpret the legal statute and the ruling they make will determine not only whether the IEEPA tariffs are lawful and whether or not businesses should be reimbursed, but also the power the executive branch can have over tariffs in the future.
In fact, the topic of reimbursement was brought up during the Supreme Court hearing when Justice Amy Coney Barrett asked the plaintiffs’ counsel—almost as though she was looking for a process proposal—how he envisioned IEEPA tariffs being refunded. Counsel responded by referencing the administrative structure already implemented by 19 U.S.C. 1514 for importers to recover duties, and further stated that a cumbersome process shouldn’t be rationale for importers not being reimbursed for the collection of what could be deemed unlawful taxes.
The timeline
It’s difficult to say exactly when the Supreme Court will make a ruling on the matter. The case was expedited due to its importance but there’s a strong possibility a decision might not come down until early in 2026.
Until then, the tariff regime set out by the U.S. administration will remain in place and importers will be required to continue to pay customs duties accordingly. What’s critical, however, is that importers take actions to effectively set themselves up for success in the event the Supreme Court determines the tariffs to be unlawful.
What to do while waiting for the Supreme Court’s ruling
First and foremost, be scrupulous. If you haven’t already done so, ensure you’re keeping clean records of all your import transactions. Strong record keeping and documentation will be critical. If duty recovery does become available, it is far more likely importers will be required to submit post-summary corrections and protests, rather than receive an automatic refund. These filings will require supporting documentation and importers unable to provide complete documentation will significantly reduce their chances of recovering those duties.
Second, keep a close watch on those aging entries. Import entries liquidate after approximately 314 days. Importers who have been subject to IEEPA tariffs should be monitoring the age of their entries by running liquidation reports through the Automated Commercial Environment (ACE). If the Supreme Court does come back in early 2026 with a ruling against the use of IEEPA, it will be only a few short weeks before some of those initial IEEPA entries reach their liquidation dates. While importers can file a protest up to 180 days past the liquidation date, the process to do so is more time intensive and if you miss the protest period, you may not be able to recover these duties at all.
What NOT to do
While desperate times may call for desperate measures, importers should steer clear of attempting to circumvent tariffs by misclassifying or undervaluing goods, or by misrepresenting their origin.
Many of the tariffs enacted through executive order (not just IEEPA tariffs but those under Section 232—such as steel, aluminum, copper, pharmaceuticals, etc., and Section 301, such as tariffs against China-origin goods—come with a far greater level of scrutiny from customs authorities. In the past, CBP has generally followed a “reasonable care” model where importers could avoid punitive action from the customs agency if they could demonstrate they were generally taking action to be compliant but had made an honest mistake or two. Today, CBP appears to be running under a strict compliance model where any transgression could result in far greater penalties than had been delivered in the past.
We strongly discourage importers from engaging in these practices. They will only result in far greater costs than the tariffs themselves.
Importing businesses, customs agencies, customs brokers and trade lawyers who have a vested interest in this case are watching it closely. But the truth is the IEEPA tariffs don’t just impact them; they impact everyone.
And now we wait. All of us.
Jill Hurley is Senior Director, Global Trade Consulting at Livingston, and a licensed attorney specializing in trade. As the practice leader, she spearheads U.S. import and export projects, offering comprehensive reviews of clients’ business models for risk assessment, crafting, and implementing import/export compliance programs, conducting audits, navigating export licensing requirements, and providing support in U.S. trade remedy matters.
Tony Troia is senior consultant, Global Trade Consulting at Livingston, as well as a licensed attorney specializing in trade, and a U.S. customs broker with over 30 years of experience in customs matters. is actively engaged in discovering duty savings opportunities, conducting compliance activities including import/export compliance assessments, first sale valuation determinations, voluntary disclosures, penalty mitigation/cancellation activities and numerous Customs and other government agency projects on behalf of Livingston International’s clients.