IEEPA Doesn’t Authorize Tariffs: What the Court Held

Congress handed the President nine verbs in IEEPA. Investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent, prohibit. “Tariff” is not one of them, “duty” is not one of them, and on February 20, 2026 the Supreme Court held that the omission decides the case. Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026).

The vote was 6-3. But the number that matters for the next case is three, which is how many Justices joined the portion of the Chief Justice’s opinion applying the major questions doctrine. Anyone reading the Supreme Court IEEPA tariff ruling for a clean pronouncement that Congress must speak clearly before the executive claims an extraordinary power will come away disappointed. What the opinion delivers instead is a patient exercise in reading a verb list, and that turns out to be the more portable holding — including for taxpayers who have never imported anything in their lives.

What Did the Court Actually Hold?

One sentence carries the case: “IEEPA does not authorize the President to impose tariffs.” Everything else is architecture.

But the disposition split along procedural lines worth understanding, because they determined where the money fight would happen. In V.O.S. Selections, No. 25-250, the Federal Circuit’s judgment was affirmed — that case had come up properly through the U.S. Court of International Trade. In Learning Resources, No. 24-1287, the district court’s judgment was vacated and the case remanded with instructions to dismiss for want of jurisdiction, because a challenge to modifications of the Harmonized Tariff Schedule “arises out of” a law providing for duties on imports and belongs to the CIT under 28 U.S.C. section 1581(i). Two importers, two courthouses, one answer.

And the opinion says nothing at all about refunds. That silence has produced its own six-month litigation, which we take up separately in our discussion of IEEPA refund claims in the Court of International Trade.

Why Didn’t “Regulate” Include the Power to Tax?

The Government’s whole case rested on two words: “regulate . . . importation.” The Chief Justice started where a first-year law student would start, with what the verb means. To regulate is to “fix, establish, or control; to adjust by rule, method, or established mode; to direct by rule or restriction; to subject to governing principles or laws.” Broad language, and the Court said so. The breadth is what puts “in stark relief what the term is not usually thought to include: taxation.”

And then came the point that ought to travel furthest. The Government could not produce a single statute in which Congress used “regulate” to hand over a taxing power. When Congress delegates both, it names both, because the two do different work — a tariff raises revenue, and revenue is the House’s business under the Origination Clause. Taxes can accomplish regulatory ends without the reverse being true.

The constitutional-avoidance move is the one practitioners keep quoting. IEEPA authorizes the President to regulate “importation or exportation.” Article I, section 9 forbids taxing exports outright. Read “regulate” to mean “tax” and half the statute becomes unconstitutional on the spot. The Government had no answer for that, and there isn’t one.

History did the rest. In IEEPA’s half century on the books, no President had ever used the statute to impose a tariff — not once, through administrations of both parties that invoked the statute constantly for asset freezes, sanctions, and blocking orders. Presidents wanting tariffs reached for other statutes. That is the sort of gap that tells you something about what everyone understood the words to mean.

The Court also catalogued how Congress actually delegates tariff authority when it means to. The word “duty” or “tariff” or “surcharge” shows up in the text, and it arrives with company — a numerical ceiling of 15 or 50 percent, a clock that often runs 150 days, and procedural prerequisites running to an investigation, a hearing, and findings by the International Trade Commission. IEEPA carries none of that. And Congress does not hide a taxing power inside a verb and then forget to put a ceiling on it.

But the Government had a fallback, and it was United States v. Yoshida International, a 1975 decision of the Court of Customs and Patent Appeals reading the Trading with the Enemy Act to permit a surcharge. One opinion from one specialized court, the majority answered, does not settle a meaning that Congress then carries forward into a new statute. Wartime precedent was set aside as beside the point. The chain of inferences running from wartime cases through successive versions of TWEA and into IEEPA was, in the Court’s view, too long to hold weight.

Who Signed On to the Major Questions Analysis?

Here is where the opinion gets interesting, and where the headlines got it wrong.

Parts I, II-A-1, and II-B — the statutory holding — carried six votes: the Chief Justice with Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. Parts II-A-2 and III, the major questions sections, carried three. Justice Kagan, joined by Justices Sotomayor and Jackson, concurred on the ground that ordinary tools of construction reach the same destination without any special canon. Justice Gorsuch wrote separately to defend the doctrine’s pedigree. Justice Barrett wrote to recast it as a commonsense principle of communication counseling skepticism, rather than a freestanding clear-statement rule — and the Chief Justice quoted her framing three times while quoting Justice Gorsuch’s not at all. Nobody who follows this Court will think that was an accident.

The dissenters, meanwhile, wanted more doctrine and a different result. Justice Kavanaugh, joined by Justices Thomas and Alito, argued for a foreign-affairs exception, on the theory that the President’s independent constitutional authority abroad makes heightened scrutiny inappropriate. Justice Thomas wrote separately and further. So the Justices most committed to the major questions doctrine voted to uphold the tariffs, and the Justices most skeptical of it voted them down.

But two holdings survive that arithmetic, and both will matter in the next case. The Court declined to carve foreign affairs out of major questions review, allowing only that wartime might present a different problem, and it applied the analysis to the President himself rather than to an agency acting under his direction — which is not how the doctrine’s earlier cases arose. For a majority of this Court the doctrine is no clear-statement rule. It is, however, a live constraint on executive claims of a revenue power.

What Does a Missing Word Do to a Regulation?

Tax lawyers should read this case as a delegation decision that happens to involve imports.

The method is the same one that has been dismantling Treasury regulations for the past year. Start with the statutory text and ask what Congress actually handed over, then ask whether the pattern of its other delegations shows that Congress knows how to grant this power when it means to. And treat the silence as a limit rather than as an invitation. That is the reasoning that produced Keysight and Siemens Medical, which we covered in our analysis of challenging Treasury regulations after Loper Bright — a general grant of rulemaking authority won’t sustain a substantive rule standing alone, and even a specific grant won’t sustain a rule that contradicts the statute underneath it.

The distinction between a procedural defect and an authority defect holds here too, and it is the reason this ruling ended a tariff program rather than pausing it. An agency that skipped notice and comment can go back and take the step. An executive that never had the power cannot manufacture it with better paperwork. Only Congress can supply what Congress withheld, and Congress has shown no appetite for supplying it.

So for anyone holding a position that depends on an agency’s claimed authority, the argument worth building is the one about the delegation rather than the one about the process. Identify the statute the rule claims to rest on and read it against what Congress said elsewhere when it meant to hand over the same power. If the two don’t look anything alike, that is the case.

Nine verbs, none of them “tax.” The Government spent months arguing that one of those nine was capacious enough to reach a $166 billion revenue program, and six Justices answered that a word Congress didn’t write isn’t a word the President gets to use. Our tax controversy and litigation practice handles authority and delegation challenges from the return position through appeal, and the Supreme Court IEEPA tariff ruling has given that argument a good deal more room to work in.

This article is for general informational purposes only and is not legal or tax advice. Reading it does not create an attorney-client relationship with Freeman Law. The law is fact-specific and subject to change, and you should consult qualified counsel about your particular situation.