After IEEPA: What Electronics Companies Should Know About Tariff Refund Strategies and Section 122

Estimated reading time: 7 minutes

The U.S. Supreme Court’s recent decision striking down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) opens the door to potential refunds for electronics companies and signals a rapid pivot to alternative trade statutes, setting the stage for a volatile 150-day period that could significantly affect global electronics supply chains.

Trade and electronics industry leaders gathered for a webinar hosted by the Global Electronics Association on Feb. 24 to learn more about the landmark U.S. Supreme Court decision. Trade attorneys Jeremy Dutra and Ludmilla (Mila) Kasulke of Squire Patton Boggs offered both legal analysis and practical guidance, indicating that the court decision reshapes the administration’s tariff authority.

In their presentations, Dutra and Kasulke detailed the recent events: The Supreme Court issued a sweeping 170-page decision, with roughly 20 pages comprising the majority opinion, authored by Chief Justice Roberts, holding that IEEPA does not grant the president authority to impose tariffs. While IEEPA allows the president to block or regulate imports and exports during a national emergency, the Court determined that it does not authorize the imposition of duties or surcharges. The ruling rested on statutory interpretation, not broad constitutional doctrine, although several concurring opinions explored deeper separation-of-powers issues.

Importantly, the Court also signaled what it expects Congress to do if it intends to delegate tariff authority: provide clear statutory authorization with guardrails. That message appears to be shaping the administration’s response, as it pivots toward statutes that more explicitly delegate tariff powers. The ruling invalidates not just the specific tariffs challenged in the case, but all tariffs imposed under IEEPA, creating immediate financial and strategic consequences for importers and their supply chains.

Your Next Steps

With IEEPA tariffs now deemed unlawful from their inception, Dutra and Kasulke said the natural question becomes how importers recover duties already paid. Despite some public statements suggesting refunds could be difficult or delayed, they emphasized that an established framework exists and that the best path is administrative rather than rushing into court.

Companies were advised during the webinar to closely track which entries included IEEPA duties and to prepare their documentation and work with compliance teams, supply chain staff, customs brokers, and counsel. If an entry is still unliquidated, the recommended first move is to file a Post Summary Correction to remove the IEEPA tariff line, recognizing that CBP can accept or reject the correction. If an entry has already been liquidated, the importer should file a protest within the 180-day deadline after liquidation.

If protests are denied, the next step would be litigation in the Court of International Trade. However, the webinar presenters noted that the court typically does not calculate refunds; it orders CBP to do so, underscoring why the administrative path remains the most direct and cost-effective starting point. They also discussed the practical reality that smaller businesses may struggle more with the process because customs brokers are overloaded and because managing protests and documentation can be resource-intensive without outside support.

The mechanics of timing was a frequent point of discussion. Dutra and Kasulke said that entries typically liquidate around 314 days after entry unless Customs accelerates liquidation, and the 180-day protest clock runs from the actual liquidation date. Early IEEPA duties, such as the first China-related rounds, have already begun liquidating, meaning some companies may already be in the protest window while others still have time to attempt Post Summary Corrections.

They acknowledged that if an entry were to become final and the protest window closes, there may still be a path through the Court of International Trade to force reliquidation because the underlying duties were unlawful, but that is a steeper and more litigated route. Their practical takeaway was to treat this as a triage exercise: Identify which entries are closest to liquidation or protest deadlines and prioritize those immediately.

The Administration’s Response

The administration’s response to the court ruling came rapidly. The president rescinded all IEEPA duties and, almost immediately, invoked Section 122 of the Trade Act of 1974 to impose a new global tariff regime. As implemented, Section 122 imposed a 10% global tariff beginning at 12:01 a.m. Feb. 24, 2026. The statute allows up to 15% for a limited period, and the presenters noted that 15% was being considered.

Section 122 is explicitly time-limited: It can remain in effect for 150 days unless Congress votes to extend it, and the presenters emphasized that, as written, it expires automatically if the president does nothing further. They calculated that this would bring the expiration to 12:01 a.m. July 24, 2026, creating a compressed window in which the administration appears poised to stand up alternative, more durable tariff structures under other statutory authorities.

The Section 122 proclamation carries forward several exemptions that had existed under IEEPA, but listeners were cautioned not to assume that all of them will remain applicable. Products that are USMCA-compliant remain exempt, and products subject to Section 232 tariffs are exempt from Section 122 so long as the Section 232 duty is paid. Annex-based exceptions also exist. However, importers must check the annexes carefully. As with prior rounds, companies must keep their accounting and disclosure practices tight, both for internal controls and for external reporting obligations, because tariff volatility affects costs, pricing, and financial statements.

For China in particular, the presenters explained that Section 122 duties layer on top of existing tariffs. Section 301 duties remain in force, and Section 122 is additive, meaning an importer could face MFN duties plus Section 301 duties plus Section 122, and potentially additional layers such as antidumping/countervailing duties depending on the product. The administration’s proclamation was described as explicit about this stacking approach. At the same time, the presenters noted that the shift from IEEPA to Section 122 could still result in a “net lower” effective rate for some China imports compared with the prior IEEPA structure.

Looking Ahead

The discussion repeatedly returned to the next 150 days, where Dutra and Kasulke expect a surge of investigations and new tariff actions under authorities that the Supreme Court, and prior case law, treat as more clearly delegated. Section 301 investigations are expected to expand, targeting unfair trade practices—an authority that fell out of favor during the era when the World Trade Organization dispute system was functioning more robustly, but which has regained prominence as WTO enforcement mechanisms have weakened. Possible targets previewed in official statements include digital services taxes, foreign treatment of U.S. tech firms, and sectors tied to industrial overcapacity.

Industrial overcapacity has drawn particular attention because it could be used to address patterns in which production or components sourced from China move through third countries for processing or substantial transformation, potentially shifting the enforcement spotlight toward manufacturing hubs such as Vietnam, Malaysia, Indonesia, and others. Dutra and Kasulke suggested this could dovetail with broader policy and legislative interest in transshipment and origin-related enforcement.

Section 232 investigations have been positioned as central to the administration’s next phase. Multiple Section 232 cases remain pending, including semiconductors in some form, and some reports point to potential new investigations involving batteries, electrical grid equipment, and telecommunications equipment. The key point was that Section 301 and Section 232 have both been used before and generally survive judicial tests when the government follows statutory procedures, which makes them more attractive tools for an administration seeking durable tariff leverage after losing IEEPA as an option.

The conversation also highlighted the geopolitical and diplomatic fallout from the Section 122 shift. Several trading partners have negotiated bilateral framework understandings under the earlier IEEPA approach, and Section 122—especially any move from 10% to 15%—risk being viewed as violating those arrangements. The UK was cited as an example of a partner that has agreed to a structure tied to MFN plus an IEEPA increment, and the EU was described as raising similar concerns. The basic tension: The United States expects partners to adhere to negotiated frameworks, but partners will demand the same, and sudden tariff changes can complicate ratification timelines abroad and undermine hard-won compromises that matter to U.S. exporters.

The webinar closed by flagging two related sets of risks. First, while refund claims against the government are front and center, disputes between businesses may become just as thorny: who actually bore the cost of the tariff, what contract terms govern tariff pass-through, and to whom any refund should flow.

These questions turn on private agreements and corporate practices, and the Association has indicated that it is looking more closely at the business-to-business implications. Second, companies considering tariff mitigation strategies—changes to sourcing, routing, valuation, or country-of-origin positions—must proceed carefully. The administration has established a cross-agency task force focused on trade fraud. Changes must be justified and documented rather than made opportunistically. Companies are to coordinate internally with compliance and supply chain teams and to consult counsel before making significant shifts.

Specific figures and timing points emphasized included:

• Section 122 tariff rate: 10% (statutory maximum 15%)
• Section 122 effective time/date: 12:01 a.m., Feb. 24, 2026
• Section 122 duration: 150 days, expiring 12:01 a.m., July 20, 2026, unless Congress extends
• Standard protest deadline after liquidation: 180 days
• Typical liquidation timing (unless accelerated): about 314 days after entry

Overall, Dutra and Kasulke framed the Supreme Court decision as both a boundary and a catalyst: It sharply limits IEEPA as a tariff tool but accelerates a pivot to other authorities that may ultimately prove more durable. For electronics companies, the immediate work is to organize refund strategies and entry data while rapidly adapting to a new tariff regime under Section 122. Stay engaged as the administration pursues Section 301 and Section 232 investigations that could redraw the trade landscape again, potentially within months.