Supreme Court Strikes Down IEEPA Tariffs: What Manufacturers and Distributors Need to Know

On February 20, 2026, the U.S. Supreme Court issued a landmark ruling in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. For manufacturers and distributors, the ruling creates both an opportunity and a compliance challenge: potential refunds on tariffs already paid, and a new tariff landscape to navigate almost immediately.  

Key Takeaways: 

• The Supreme Court's ruling that the power to impose IEEPA tariffs falls within congressional, not executive authority, creates uncertainty for manufacturers and distributors, requiring them to reassess contracts and supply chains. 
• Companies face challenges with cost accounting, forecasting, and legal compliance due to the potential for tariff refunds and shifts in previously accepted trade agreements following the removal of IEEPA tariffs. 
• Manufacturers and distributors must proactively review tariff clauses, update pricing models, and audit supply chain dependencies, while working with trusted partners to navigate compliance and financial modeling in the wake of the ruling. 

Implications for Manufacturers and Distributors 

The Supreme Court’s recent ruling directly affects manufacturers and distributors, making it imperative for industry organizations to proactively understand its implications. Questions will continue to rise as previously accepted trade agreements with other countries shift due to the removal of IEEPA tariffs. Manufacturers with long-term contracts, including fixed-price supply agreements, face risk exposures. Companies will need to thoroughly re-examine their supply chains, vendor and customer contracts, and reassess their landed cost models.  

The question of tariff refunds and the future of tariffs as a whole makes cost accounting and forecasting more difficult and heightens legal and compliance requirements. Shortly after the decision was released, the White House announced a temporary, global tariff of 10% (increased to 15% on February 24, 2026) under Sec. 122 of the Commerce Act. To effectively navigate these changes, organizations need to be prepared for market volatility, inventory valuation discrepancies, and potential tariff exposure under other authorities.  

Steps for Manufacturers and Distributors Moving Forward 

Immediate Actions  

• Identify all tariff entries paid under IEEPA and assess refund eligibility  
• Work with customs and trade professionals to file administrative protests before the window closes  
• Review tariff clauses in existing supplier and customer contracts  
• Update pricing and margin models to reflect Section 122 tariff rates  

Near-Term Planning  

• Build tariff-scenario models that incorporate current global tariffs and potential Section 301 actions  
• Audit supply-chain dependencies with tariff-impacted countries  
• Establish a compliance monitoring process for evolving tariff regulations  

Navigating the road ahead will be increasingly challenging for M&D organizations. This will enhance insights and empower strategic financial and operational decision-making as new laws or tariffs evolve.  

Alternative Liquidity Strategies: Monetizing IEEPA Tariff Refund Claims 

While many organizations are preparing to pursue refunds through administrative protests or litigation, some companies are evaluating an alternative approach: monetizing potential tariff refund claims. 

What Is Claims Monetization? 

In emerging secondary markets, institutional investors may purchase participation interests in refund claims at a negotiated discount. In exchange for immediate liquidity, the company transfers a portion, or all, of its economic interest in a potential refund. 

 It’s important to note:  

• The importing company typically remains the named claimant, as tariff refund rights are generally not freely transferable. 
• Transactions are often structured as participation rather than outright assignments. 
• Funding is typically nonrecourse to the seller, except in cases of misrepresentation or claim invalidity. 

The claimant company must still pursue legal strategy and administrative processes. 

What Is the Benefit of Claims Monetization?  

Administrative refund processes and potential litigation could take significant time to resolve. During that time: 

• Refunds remain contingent assets 
• Working capital remains constrained 
• Financial statement treatment may require disclosure and judgment 
• Market and political developments may introduce additional uncertainty 

For organizations prioritizing liquidity, balance sheet certainty, or risk transfer, monetization may provide: 

• Accelerated cash flow 
• Reduction of refund timing risk 
• Partial de-risking of litigation exposure 
• Improved forecasting predictability 

Key Considerations Before Monetization  

Before moving forward in the monetizing process, there are several key considerations companies should carefully assess:  

Documentation quality supporting the tariff claim 

• Financial strength requirements imposed by buyers 
• Potential need to initiate litigation to preserve rights 
• Allocation of ongoing legal costs 
• Accounting treatment under ASC 450 or relevant contingent asset guidance 
• Tax implications of discounted recovery 

Pricing in this emerging market is dynamic and reflects factors like legal uncertainty, political risk, claim size, and documentation strength. As with other claim financing forms, terms vary significantly based on risk profile and timing expectations. 

When to Monetize as a Manufacturer and Distributor  

For many manufacturers and distributors, the decision will hinge on capital strategy. Organizations with strong liquidity positions may prefer to pursue full recovery through administrative or judicial channels. Those facing margin pressure, supply-chain restructuring costs, or working capital constraints may determine that accelerated partial recovery provides greater enterprise value than waiting for a full refund.  

Given the evolving nature of the IEEPA refund process and the potential for extended administrative timelines, companies should consider evaluating monetization as part of a broader financial strategy rather than solely a legal one. 

A Shifting Tariff Landscape  

For M&D companies, this verdict opens an opportunity for significant tariff refunds for those who paid IEEPA tariffs on raw materials, components, or finished goods. Organizations should report their findings within the first 180 days after liquidation.  As companies assess refund eligibility and timing, many are also evaluating broader liquidity strategies tied to potential recoveries. Customs and trade professionals have been key to evaluating whether the tariffs paid on imports over the last year were accurate, and they will have a significant role in helping identify any potential refunds. 

By working with a trusted advisor, companies can find trusted guidance to maintain compliance and enhance financial modeling. EisnerAmper’s team is here to help you through this journey, equipping you with resources and insights to mitigate risks and reduce operational disruptions. Contact us today and learn how we can assist your company.