On February 20, 2026, the U.S. Supreme Court issued a significant decision in Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The ruling clarifies the constitutional boundary between executive emergency powers and congressional authority over import duties, with direct relevance for trade compliance, tariff planning, and classification governance.

This decision reshapes how emergency trade measures should be evaluated from a legal and compliance standpoint, particularly for companies operating across multiple jurisdictions.

Background: IEEPA and the Use of Emergency Powers in Trade Policy

IEEPA was enacted to grant the President authority to respond to extraordinary foreign threats involving national security, foreign policy, or the economy. Historically, its application focused on sanctions, asset freezes, and financial restrictions.

In 2025, the statute was invoked to justify broad import tariffs targeting multiple trading partners. The administration argued that IEEPA’s language allowing the President to “regulate importation” extended to the imposition of duties. Importers, trade associations, and states challenged this interpretation, asserting that tariffs constitute taxes and fall exclusively within congressional authority.

Lower courts rejected the government’s position, leading to Supreme Court review.

The Supreme Court’s Holding

In a 6 to 3 decision, the Court concluded that IEEPA does not authorize the President to impose tariffs. The majority emphasized several core principles:

• Tariffs are taxes on imports, not mere regulatory conditions.
• The U.S. Constitution assigns the power to impose duties and taxes to Congress.
• When Congress intends to delegate tariff authority, it does so explicitly and with defined limits.
• IEEPA’s general authorization to regulate economic activity does not include the power to create import duties.

The Court vacated the judgment in case No. 24-1287 and remanded it with instructions to dismiss, while affirming the lower court’s ruling in a related consolidated case.

Why This Decision Matters for Trade Compliance

Congressional Authority and Legal Predictability

The ruling reinforces a foundational principle of U.S. trade law: tariff authority originates in statute, not executive discretion. This clarification supports more predictable duty frameworks and reduces reliance on emergency-based interpretations that lack clear legislative grounding.

Trade compliance programs benefit from environments where tariff exposure is tied to enacted law rather than temporary executive determinations.

Clearer Separation Between Tariff Policy and Classification Logic

The decision draws a sharper line between tariff policy and classification analysis. Classification decisions are grounded in legal texts such as the Harmonized System, explanatory notes, and jurisprudence. They are not designed to fluctuate with emergency trade actions.

This separation underscores why classification programs must be built on consistent legal reasoning rather than reactive adjustments to policy-driven tariff measures.

Increased Importance of Audit-Ready Documentation

The invalidation of IEEPA-based tariffs raises questions around duty recovery and refund claims. Importers seeking relief will likely face scrutiny regarding historical classification positions, valuation methods, and supporting documentation.

Strong audit trails, consistent rationale, and defensible classification logic will play a central role in navigating post-decision litigation and administrative reviews.

Continued Complexity in Trade Enforcement

Although the ruling limits IEEPA, it does not reduce overall trade enforcement activity. Other statutory tools remain available, including Section 301, Section 232, and antidumping or countervailing duty mechanisms. Trade risk management continues to require close monitoring of multiple legal authorities.

Implications for Global and Multijurisdictional Programs

Companies operating across the United States, the European Union, and other jurisdictions must account for differences in how tariff authority is exercised and challenged. The Supreme Court’s reasoning highlights the value of jurisdiction-specific compliance frameworks that recognize local legal structures rather than assuming uniform trade enforcement models.

Programs designed around legal consistency and jurisdictional nuance are better positioned to withstand both regulatory review and judicial scrutiny.

Key Takeaways for Trade Compliance Teams

• Emergency economic powers have defined legal limits in trade matters.
• Tariff exposure should be analyzed through statutory authority, not policy signaling.
• Classification consistency remains a cornerstone of defensible compliance programs.
• Documentation quality directly impacts refund eligibility and audit outcomes.
• Trade risk persists even as specific legal pathways are constrained.

The Supreme Court’s decision in Learning Resources, Inc. v. Trump provides long-needed clarity on the limits of executive authority under IEEPA. By reaffirming congressional control over tariffs, the ruling strengthens legal predictability and reinforces the importance of statutory interpretation in trade compliance.

In an environment where enforcement remains active and multi-layered, durable classification logic and audit-ready compliance structures continue to be essential. Decisions like this one reinforce that trade compliance is ultimately a legal discipline grounded in structure, consistency, and defensibility.