The message below is from a message we sent all CITTA clients on February 24, 2026. It includes advice for navigating next steps following the Supreme Court’s February 20 ruling regarding tariffs justified under the International Emergency Economic Powers Act (IEEPA) with specific recommendations for companies currently filing drawback or considering setting up a drawback program.
On February 20, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs, immediately voiding the reciprocal tariffs and fentanyl-related tariffs. In response, the President issued an Executive Order terminating all IEEPA tariffs and announced a new 15% surcharge on all imports effective February 24 under Section 122 of the 1974 Trade Act.
After consulting with our internal compliance team and this memo from our trade attorneys at Neville Peterson LLP, here is our guidance.
On recovering duties paid under IEEPA
The Court’s ruling made the IEEPA tariffs invalid, but did not require that tariffs and duties paid need to be returned. Recovery of the estimated $130–$170 billion in IEEPA tariffs collected is far from guaranteed. There is precedent for the government not issuing refunds in cases like this, and market observers are skeptical that impacted duties will ever be returned in full. Any refund that does materialize will likely take years — and as refund requests surge, CBP will become increasingly backlogged, further slowing the process.
On duty drawback
Given the uncertainty of recovering IEEPA tariffs paid, our recommendation is to continue filing duty drawback claims. This is where the opportunity lies. Section 301 tariffs and drawback-eligible goods under Section 232 — including auto parts, wood products, and select others — remain fully claimable at up to 99% recovery. And per CBP’s CSMS #67844987, the new Section 122 duties are also drawback eligible, creating additional recovery opportunity effective February 24.
There is a narrow window right now. As CBP works through the implications of the ruling, the volume of refund requests will grow significantly — and that backlog will affect drawback processing times as well. Acting now means getting your claims to the front of the line.
Our commitment to you
If a refund on IEEPA tariffs is ultimately ordered in your favor, we will coordinate with your accounting team to ensure you are made whole — reconciling any disbursed drawback claims against duties the government owes you so nothing falls through the cracks.
It’s also worth noting something we feel strongly about: we don’t get paid until you do. Unlike many drawback brokers who require upfront fees, our model is built on your recovery first.
CITTA Brokerage will continue to file drawback on your behalf, including against any eligible tariffs from 2025, unless you instruct us otherwise. As trade policy continues to evolve and we receive guidance from CBP and the courts, we will keep you informed through emails like this and on our blog. In the meantime, please don’t hesitate to reach out with any questions.
