Transfer Pricing After the IEEPA Ruling

On February 20, 2026, the U.S. Supreme Court ruled that President Trump's sweeping tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA) are unlawful. The authority President Trump asserted under IEEPA is now gone; however, the ruling does not affect tariffs imposed under other legal authorities, including some authorities that have not been used previously.  

Key Takeaways  

• IEEPA tariffs were struck down, but tariff exposure continues under alternative legal authorities. 
• A temporary 15% global tariff under Section 122 creates short‑term relief but long‑term uncertainty. 
• Any tariff refunds will flow to the importer of record, potentially misaligning economic outcomes within multinational groups. 
• Companies should reassess transfer pricing and supply chain structures without making premature structural changes. 

What Comes Next for Tariffs? 

The administration is already taking advantage of multiple alternative authorities for imposing tariffs, particularly under Section 122 of the Trade Act of 1974. President Trump signed a new 15% global tariff into effect within a day of the ruling under that authority, effective February 24, 2026.  

Importantly, the Section 122 tariffs can only remain in effect for a maximum of 150 days. After that, Congress must approve them, or the administration may attempt to reimpose tariffs under yet another authority. With this in mind, businesses making sourcing decisions, investment plans, and long-term contracts cannot simply return to normal. 

Will There be Tariff Refunds? 

The Court offered no road map for how a refund process would work. Both sides of the bench recognized the difficulty. In his dissent, Justice Kavanaugh flagged what he called the likely "mess" of a refund process. Justice Barrett used the same word during oral argument. 

Here is what we know about how refunds would flow: 

• Under 28 U.S.C. Sec. 1581(i) and standard customs procedures, reliquidation flows to the importer of record — the company that cleared goods through customs. 
• That means federal refunds would run through importers, not necessarily through the entity that ultimately bore the economic cost of the tariff within a multinational group. 
• No timeline has been set. Trade attorneys have warned that the process could take months or years, and that importers who did not file timely protests may forfeit their refund claims. 

What This Means for Transfer Pricing 

The disconnect between who receives the refund (the importer of record) and who bore the economic burden (which may be a different intercompany entity) creates a potential transfer pricing issue. Companies that passed IEEPA tariff costs through the intercompany chain via cost-plus arrangements, resale price adjustments, or other mechanisms need to assess how potential refunds would affect their transfer pricing model.  

If refunds are received by the importer of record, the group will need to determine which intercompany entity is entitled to the economic benefit and ensure the allocation is consistent with the transfer pricing policy and the arm's length standard. Groups that pursued entity rationalization, established contract manufacturing arrangements, or implemented commissionaire structures to mitigate IEEPA tariff exposure should reassess whether those structures still achieve their intended transfer pricing outcomes in the current environment. Additionally, intercompany agreements and contemporaneous documentation should clearly identify which entities bore the economic burden of IEEPA tariffs. This will be relevant to both refund claims and any related transfer pricing adjustments. 

Foreign tax authorities may scrutinize how refund proceeds are allocated. If a foreign related party absorbed tariff costs through reduced intercompany prices, that entity may have a legitimate claim to a share of the refund. The failure to pass it back could create double taxation risk. 

One major caution: Do not unwind structures prematurely. The Sec. 122 replacement tariff, potential expanded use of Secs. 232 and 301, and the possibility of Sect. 338 actions mean that tariff exposure may be reconstituted in different forms. 

Transfer prices directly affect customs valuation, which determines duty exposure. With the tariff landscape shifting rapidly, transfer pricing and customs compliance teams should coordinate to review whether the transaction value used for customs entry purposes is consistent with intercompany pricing policies, especially where year-end true-ups or retroactive adjustments have been made. Furthermore, for companies that made customs valuation elections or adjustments specifically to manage IEEPA duty exposure, those positions should be revisited immediately. 

Intercompany agreements should be built with flexibility to adjust pricing in response to material changes in duty costs. Companies face a hard 150-day window during which duty costs remain near pre-ruling levels, followed by a potential cliff, or another pivot to a different authority. Either outcome could significantly disrupt intercompany economics. Groups should prepare scenario-based transfer pricing analyses that account for tariff outcomes under the various statutory authorities now in play. 

Recommended Next Steps 

1. Assess and preserve refund claims. Identify all entries subject to IEEPA duties, confirm that protests were timely filed, and document the intercompany flow of tariff costs, including which entity bore the economic burden and which entity is the importer of record. 
2. Re-assess intercompany pricing for goods imported into the U.S. to determine whether adjustments are needed in the post-IEEPA environment. 
3. Review intercompany agreements for flexibility to respond to ongoing tariff changes and update transfer pricing documentation to reflect the post-ruling economics. 
4. Evaluate supply chain structures implemented during the IEEPA tariff period, but do not unwind prematurely, given the likelihood of replacement tariffs. 

EisnerAmper is available to help navigate the transfer pricing implications of last week’s ruling and the rapidly evolving tariff landscape. Contact our team below if you have  questions or wish to discuss how this decision affects your organization.