Trump's Response to the Tariff Ruling: Replacement Tariffs, Litigation Threats, and Your Claim

What Happened on February 20

The morning began with a landmark 6-3 Supreme Court decision in Learning Resources Inc. v. Trump, ruling that IEEPA does not authorize presidential tariffs. By that afternoon, the White House had already fired back with three executive actions.

The Press Conference

President Trump held a press conference within hours of the ruling. The key messages:

• • He called the decision "wrongly decided" and criticized the majority justices
• • He stated that any refunds of previously collected tariffs would be litigated for "two to five years"
• • He announced replacement tariffs would take effect immediately under different statutory authority
• • Treasury Secretary Scott Bessent echoed that the administration would "leverage a number of other existing tariff laws" to replace the struck-down duties

The Replacement Strategy: Section 122 + Section 301

The administration signed two executive orders and one proclamation on February 20:

1. Termination of all IEEPA tariffs. The first order ends collection of every IEEPA-based tariff - the China fentanyl duties (up to 20%), Canada and Mexico border tariffs (up to 35%), the "Liberation Day" reciprocal tariffs (10-50%), and several others. This is legally required by the ruling.

2. New 15% global tariff under Section 122. A proclamation imposed a temporary 15% ad valorem tariff on most imports from all countries under Section 122 of the Trade Act of 1974. This statute allows the President to impose tariffs up to 15% for 150 days to address "large and serious" balance-of-payments deficits - a different legal basis than IEEPA.

3. Section 301 investigations initiated. The second order directs the U.S. Trade Representative to begin Section 301 investigations into trade practices of major trading partners. Section 301 is the same authority used for the original China tariffs during Trump's first term - and those tariffs were upheld by courts.

The "Five Years" Threat: Real or Bluster?

Both. Here's why:

Why it's partially real: The Supreme Court did not order refunds directly. It remanded to the Court of International Trade (CIT) to determine remedy. The government can - and will - litigate every procedural step. How much of the $175 billion is refundable? Which entries are still unliquidated? What's the proper mechanism for liquidated entries that were protested? These questions will take time to resolve through the CIT, and possibly the Federal Circuit on appeal.

Why it's also a tactic: The administration has every incentive to make refunds sound uncertain and distant. If importers believe recovery will take five years and cost significant legal fees, some will accept pennies on the dollar from litigation finance buyers - or simply write off smaller claims. The government's best outcome is fewer claims filed and lower total payouts.

The reality is likely somewhere in the middle. Unliquidated entries - where Customs hasn't yet finalized the duty amount - are the fastest path to recovery and could resolve in 12-18 months. Liquidated entries that were properly protested have a clear legal basis but face more procedural hurdles. The longest timeline applies to entries where no protest was filed, requiring litigation under 28 USC § 1581(i).

What This Means for Your Existing Claim

The short answer: nothing changes.

• • The Supreme Court ruling stands. IEEPA tariffs were unlawful.
• • The government's obligation to refund unlawfully collected duties is unaffected by new tariffs
• • Replacement tariffs under Section 122 and Section 301 are entirely separate legal actions
• • The CIT proceedings to determine refund mechanics will proceed regardless of White House rhetoric

The administration's combative posture does add uncertainty around timing - but not around the fundamental legal obligation. The duties were collected without authorization. The law requires them to be returned.

Why Acting Now Matters

The tariff ruling created a new asset class overnight: IEEPA refund claims. And the market is already forming:

• • Litigation finance buyers are circling. Multiple firms are already approaching importers with offers to purchase claims at a discount. Without knowing your claim's expected value, you can't evaluate whether an offer is fair.
• • Filing deadlines exist. Protest windows for liquidated entries are time-limited. Missing a deadline could mean forfeiting your claim entirely.
• • The CIT is moving. Early procedural decisions will shape the refund framework for everyone. Companies that understand the landscape can position accordingly.
• • The replacement tariffs add cost pressure. The new 15% Section 122 duty means your import costs haven't disappeared - making recovery of past overpayments even more important for your bottom line.

Section 122: What to Watch

The 15% global tariff under Section 122 has a built-in limitation: it can only last 150 days without Congressional approval. That puts the expiration around July 20, 2026. The administration will need to either secure Congressional backing, transition to Section 301 tariffs (which have no time limit but require an investigation process), or let the replacement tariffs lapse.

This is a separate issue from your refund claim - but it matters for forward-looking import cost planning.

For details on our calculation approach, see our Methodology.