Understanding IEEPA Tariffs and Their Implications to Importers

The International Emergency Economic Powers Act (IEEPA) tariffs are a new class of United States (U.S.) import duties imposed by President Trump after declaring several national emergencies in 2025. They sit at the intersection of trade, national security, and executive power and are now the subject of high‑stakes litigation that could reshape how far presidents can go in using emergency authorities to tax imports.

What Are IEEPA Tariffs?

While often discussed in the context of trade, IEEPA is a 1977 law that was designed as a powerful financial measure for emergencies. Its intended purpose is to allow a president to respond to an “unusual and extraordinary threat” from abroad that targets U.S. national security, foreign policy, or the economy. Think of it less as a trade negotiation tool and more as an emergency lever to protect the country from hostile foreign actors.

The law's main powers are financial. It allows the president to freeze the assets (like bank accounts) of foreign countries, companies, or individuals and block them from doing business with Americans. This is a common way the U.S. government works to cut off funding for terrorist organizations or put pressure on regimes engaging in human rights abuses. This enforcement is carried out by the Office of Foreign Assets Control (OFAC) within the U.S. Treasury Department.

What makes today’s IEEPA tariffs unusual is that they leverage a sanctions‑style authority to impose broad, across‑the‑board import duties rather than targeted asset freezes. Beginning in early 2025, President Trump declared national emergencies tied to:

• Illicit drugs and fentanyl flows across the northern and southern borders
• The synthetic opioid supply chain in China
• Large and persistent U.S. goods trade deficits and “unfair” foreign trade practices

These emergencies were followed by executive orders that layered new IEEPA‑based duties on imports from Mexico, Canada, China, and many other countries.

This is the first time IEEPA has been used to impose such broad, generalized tariffs on imports rather than narrow sanctions, making these measures historically unprecedented.

How IEEPA Tariffs Work in Practice

From an importer’s perspective, IEEPA tariffs function like any other additional duty: they are assessed at the time of entry and are paid to the U.S. Customs and Border Protection (CBP) along with ordinary customs duties. Key operational features include:

• Scope and Coverage: The tariffs apply to a wide range of goods and countries, depending on the particular executive order and any “stacked” measures in effect for that product and origin.
• Rates: Many IEEPA tariffs are set at 10–25%, but some targeted items (for example, certain de minimis shipments or fentanyl‑linked products) face much higher effective rates under specific orders.
• Stacking: A single import can be hit with multiple IEEPA duties at once, according to stacking rules issued in follow‑on executive orders, resulting in an “effective IEEPA tariff rate” that is the cumulative burden of all applicable emergency measures.
• Administration: CBP collects the duties, assigns special Chapter 99 tariff numbers for IEEPA measures, and tracks them separately from other trade remedies such as Section 232 (national security) or Section 301 (unfair trade) tariffs.

Because the first IEEPA tariffs took effect in February 2025, a large share of entries subject to these duties are still within normal refund and litigation timeframes, which is part of what makes the current court challenges so consequential.

Is a Trade Dispute a True National Emergency?

Is an economic disagreement, like a trade imbalance, the same as the "unusual and extraordinary threat" IEEPA was designed to combat? The answer depends entirely on who you ask, and it has created a significant divide over presidential power.

Throughout 2025, importers and several states challenged the IEEPA tariff orders at the U.S. Court of International Trade (CIT). According to a recent CBP declaration in consolidated CIT litigation, importers have paid approximately $129 billion in IEEPA tariff duties and estimated deposits across over 34 million entries as of December 10, 2025.

The CIT, and later the Court of Appeals for the Federal Circuit, held that IEEPA does not provide the president with the necessary authority to impose these kinds of broad tariffs. However, the Court of Appeals issued an order administratively staying the CIT injunction while it considered an appeal — as of the date of this publication, IEEPA tariffs remain in effect.

Critics of IEEPA tariffs believe the U.S. Constitution gives Congress — not the President — the primary power to set taxes and regulate commerce. From this perspective, using an emergency law to bypass Congress on a trade issue weakens the fundamental system of checks and balances. It is argued that while a trade dispute might be serious, it doesn’t rise to the level of a true national emergency.

Proponents argue that the nature of global threats has changed. It is contended that in the 21st century, an aggressive economic policy from another nation can be just as damaging to U.S. security as military action. In this view, IEEPA is a necessary tool that allows a President to respond swiftly to protect American jobs and industries without getting bogged down in slow-moving politics.

Economic Impact and Who Pays

IEEPA tariffs raise the landed cost of affected imports, and the burden generally falls on U.S. businesses and consumers rather than foreign exporters. Some of the key impacts include:

• Higher Costs for Importers: Companies pay the extra IEEPA duties at entry, which can be significant in sectors heavily reliant on imports from Mexico, Canada, China, and other targeted countries.
• Supply Chain Disruption: Many firms have scrambled to re‑source products, reprice contracts, or restructure supply chains to reduce exposure to IEEPA‑hit items.
• Uncertainty and Planning Challenges: Because the legal status of the tariffs is unsettled, importers face difficulty in long‑term pricing, budgeting, and contract negotiations, not knowing whether duties will be permanently baked into cost structures or potentially refunded.

What Happens Next?

It has now been more than two months since the Supreme Court heard arguments on the Trump administration’s IEEPA tariffs, and a ruling is expected soon.

With a potential U.S. Supreme Court decision overturning President Trump’s IEEPA tariffs on the horizon, companies should be ready to move quickly. In practical terms, that means:

• Building a complete record of IEEPA tariffs paid so they can substantiate refund claims.
• Reviewing key customer and supplier contracts to understand who ultimately benefits from any refunds and whether pricing or rebate clauses are triggered.
• Understanding existing customs refunds and reliquidation mechanisms, while recognizing that the Court or the government may design a special, one‑off process for IEEPA refunds.
• Exploring tariff‑mitigation strategies, such as bonded warehouses and foreign‑trade zones, to manage current and future duty exposure.
• Planning for the likelihood that “replacement” tariffs could follow, potentially under Section 232 or new legislation, even if IEEPA‑based duties are struck down.

Additionally, the CIT recently ruled that liquidation of entries subject to International Emergency Economic Powers Act (IEEPA) tariffs does not bar reliquidation and refunds if those tariffs are deemed unlawful by the Supreme Court.