U.S. Customs to Halt IEEPA Tariff Collections at Midnight Tuesday

U.S. Customs and Border Protection (CBP) announced late Monday that it will cease collecting tariffs imposed under the International Emergency Economic Powers Act (IEEPA) effective 12:01 a.m. EST (0501 GMT) on Tuesday.

This comes more than three days after the U.S. Supreme Court declared those duties illegal in a landmark 6-3 ruling on Friday.

In a message posted to its Cargo Systems Messaging Service (CSMS), CBP stated it would deactivate all tariff codes associated with President Donald Trump’s prior IEEPA-related orders as of Tuesday. The agency provided no explanation for the delay in halting collections despite the immediate legal effect of the Supreme Court decision, nor did it offer details on the process for refunds to importers who paid duties under the now-invalidated regime.

CBP emphasized that the halt applies only to IEEPA tariffs and does not affect other duties imposed by Trump, including those under Section 232 (national security), Section 301 (unfair trade practices), antidumping/countervailing measures, or the new 15% global tariff enacted under Section 122 of the 1974 Trade Act.

“CBP will provide additional guidance to the trade community through CSMS messages as appropriate,” the agency said.

Supreme Court Ruling and Immediate Aftermath

The Supreme Court’s Friday decision invalidated Trump’s use of IEEPA — a 1977 law granting emergency economic powers — to impose broad “reciprocal” tariffs (10–50%) and fentanyl-related duties since February 2025. Chief Justice John Roberts, writing for the majority, held that IEEPA does not authorize unilateral import taxes absent a specific, imminent foreign threat, ruling the president exceeded congressional intent and violated the separation of powers.

The ruling dismantled the legal foundation for tariffs that had generated an estimated $175–$179 billion in revenue since February 2025, according to the Penn-Wharton Budget Model (PWBM). PWBM’s ground-up model, using Census Bureau import data across 11,000 product categories and 233 countries, calculated roughly $500 million in daily IEEPA-based collections, leading to the cumulative $179 billion figure.

A cross-check with historical CBP assessment data as a share of total Treasury customs receipts yielded a similar $175–$176 billion range. CBP’s last published IEEPA assessment (December 14, 2025) stood at $133.5 billion, with net collections typically lower after adjustments, protests, and refunds.

Trump reacted swiftly to the ruling. On Saturday, he imposed a temporary 10% global levy under Section 122 of the 1974 Trade Act, then raised it to 15% — the maximum rate allowable for 150 days without congressional approval.

“Effective immediately,” he declared on Truth Social, framing the action as necessary to maintain leverage despite the court decision.

U.S. Trade Representative Jamieson Greer defended the continuity of existing trade deals, insisting the ruling affected only IEEPA-based tariffs.

“Our partners have been responsive and engaged in good-faith negotiations and agreements despite the pending litigation, and we are confident that all trade agreements negotiated by President Trump will remain in effect,” Greer said Sunday on CBS’ Face the Nation.

Refund Process and Fiscal Implications

Importers who paid IEEPA duties since February 2025 are now eligible to seek refunds from CBP. The process will involve filing protests or refund claims, subject to administrative review, potentially stretching over months or years. A $175–$179 billion refund would represent a massive one-time cash outflow for the Treasury — exceeding the combined fiscal 2025 outlays of the Department of Transportation ($127.6 billion) and Department of Justice ($44.9 billion).

Treasury Secretary Scott Bessent told Reuters in January that the Treasury could “easily cover” any repayments through planned cash balances ($850 billion at end-March 2026, $900 billion at end-June). The administration has signaled contingency plans to restore tariffs under alternative authorities (Section 232, Section 301) if needed, though these may face their own legal and procedural hurdles.

The refund potential could provide unintended stimulus to businesses and consumers, though administrative bottlenecks at CBP may delay payouts. Importers in affected sectors (steel, aluminum, autos, consumer goods) stand to recover substantial duties, potentially improving cash flow and margins.

The ruling significantly curtails executive authority to impose broad tariffs under emergency powers, reinforcing congressional primacy over trade policy. It may force the administration to rely more heavily on Section 232, Section 301, and antidumping/countervailing mechanisms — processes requiring more evidentiary findings and procedural steps.

For trading partners, the decision offers temporary relief from broad emergency tariffs while signaling that targeted, evidence-based actions under other laws remain likely. The EU, U.K., Japan, and South Korea — early deal-makers with preferential rates — now face uncertainty over whether those concessions survive the transition to new tariff frameworks.

The administration’s pivot to Section 301 probes (covering pharmaceuticals, industrial overcapacity, forced labor, digital services taxes, and more) indicates a shift toward a more targeted, legally durable approach — albeit one that could still provoke retaliation from affected countries.

Trade partners welcomed the ruling. China’s Ministry of Commerce called it “a step toward fairer trade,” while the EU expressed hope for reduced transatlantic tensions. However, if the U.S. reimposes duties under new authorities, retaliatory measures could escalate — potentially reigniting global trade frictions.

For importers, the ruling unlocks a path to refunds but introduces short-term uncertainty as CBP processes claims. Legal experts predict a surge in filings, with class actions possible for smaller importers.