On February 20, 2026, the Supreme Court struck down the tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA), invalidating a sweeping regime that had covered imports since early 2025. The ruling opens the door to potential refunds of up to $175 billion in duties already collected.
The refund question sits at the intersection of customs procedure, administrative law, but also economics, and resolution will likely vary significantly across cases.
Beyond the question of which importers recover how much from the government, the ruling sets the stage for a second wave of disputes: private litigation among commercial actors over who ultimately bore the tariff burden and whether any refund should be shared downstream.
Both types of disputes turn on the same core economic question: how much of the tariff was passed through, to whom, and with what consequences? CRA has extensive experience providing economic analysis in exactly these settings.
I. Claims against the Government: Refunds of duties paid
The importer of record is the natural plaintiff in any claim for a refund. Litigation is already underway: as of late February 2026, at least 1,800 companies had filed suits in the Court of International Trade, the specialized federal trade court in New York that handles customs and import matters, with more joining every day.
Well-known names such as Costco, Goodyear, FedEx, and Barnes & Noble are among the plaintiffs. Whether companies that do not file suit will be entitled to refunds through an administrative process remains unresolved.
The government’s likely defense will not be purely procedural.
There is a plausible risk that the U.S. government will argue that full refunds would constitute unwarranted windfalls because importers actually passed tariff costs through to their customers via price increases and therefore did not ultimately bear the cost of the refund. The extent, if any, of that pass-through will likely be a central factor in establishing compensation.
It is important to note that the degree of pass-through will have varied significantly across industries, product categories, and competitive structures. Some firms absorbed costs entirely through margin compression; others passed them through partially or fully, at different speeds.
These are empirical questions that must be measured instead of assumed.
Pass-through analysis complexity
Even if there was some extent of pass-through, importers may still have sustained other categories of economic loss that are not offset by this apparent avoidance of tariff harm.
The importer may have incurred other forms of economic loss, such as compressed margins in the transition period before pricing adjusted, lost sales volume as demand responded to higher prices, higher working capital requirements, costs of supply-chain reconfiguration, and deferral or abandonment of strategic decisions.
Even after tariffs are lifted, their economic effects may still be seen in multiple dimensions, such as:
- Pricing strategies reset to levels that may not fully unwind;
- Supply chain relationships restructured at significant cost and now not easily reversed;
- Product lines rationalized to reduce tariff exposure; and
- Capital allocation decisions made under the assumption that tariff costs were permanent.
Further, if there was pass-through, the price effects of tariffs may have affected demand by rippling through the supply chain. Such demand lost can manifest in the form of purchases deferred, substitutes adopted, or discretionary spending curtailed. In other words, the IEEPA tariff regime can have affected companies simultaneously as a negative supply shock via raising input costs and as a negative demand shock via raising prices.
These economic losses are distinct from, and often larger than, the accounting question of the amounts of tariffs paid to customs.
Careful economic analysis will need to examine the extent of pass-through while distinguishing it from other concurrent cost pressures that affected pricing during the same period, including broader inflation, supply disruptions, and shifts in input costs unrelated to IEEPA. Establishing a clean causal link from tariff to pass-through requires rigorous economic analysis.
CRA provides economic analysis of pass-through, margin compression, and tariff effects in antitrust, international trade, and commercial litigation contexts. We construct models using customs entries, invoices, internal cost records, and pricing data to quantify these effects and separate tariff-driven impacts from overlapping market forces.
II. Private disputes among commercial actors
The Supreme Court’s ruling also creates a second category of disputes that will unfold in parallel: private litigation between importers and their downstream customers over the allocation of tariff costs and, now, tariff refunds.
Where an importer passed tariff costs through to customers via price increases and subsequently recovers a refund from the government, downstream purchasers may assert unjust enrichment claims. They may argue that the importers should not retain refunds for the duties that the customer effectively funded.
Regardless of the legal theory, these disputes require similar economic analysis.
These claims will involve examining what portion of tariff costs was passed through, at what prices, and over what period, as well as how that compares to the refund being sought or received.
How we can support IEEPA litigation
The economic questions driving IEEPA disputes require specialized analysis that distinguishes tariff effects from concurrent market forces and quantifies pass-through with precision that can withstand courtroom scrutiny.
Pass-through analysis. Using customs data, pricing records, invoices, and market data, we can quantify the degree to which tariff costs were absorbed versus passed through, both in the aggregate and at the product or customer level.
Margin and volume effects. We can model how tariffs affected operating margins and sales volumes, separating IEEPA-driven effects from concurrent market-level changes in inflation, supply, or demand that took place over the same period.
Supply chain and strategic harm. We can assess and quantify costs associated with supply chain reconfiguration, product rationalization, and other strategic decisions made in response to tariff exposure.
Case assessment and discovery support. We can provide early-stage economic analysis to support case assessment, range of damages estimates, and targeted discovery requests tied to the specific indicators most likely to determine outcome.
Expert testimony. CRA’s experts have testified in federal courts, international arbitral tribunals, and before regulatory bodies on damages, unjust enrichment, valuation, and economic causation in commercial and trade disputes.
We welcome the opportunity to discuss the economic complexities of your IEEPA cases and how our analysis can strengthen your client’s position.
Sources
1 Christopher T. Zirpoli, “Supreme Court Rules Against Tariffs Imposed Under the International Emergency Economic Powers Act (IEEPA),” Library of Congress, February 23, 2026.
2 David Lawder, “Exclusive: Supreme Court tariff ruling makes over $175 billion in US revenue subject to refunds, Penn-Wharton estimates,” Reuters, February 20, 2026.
3 Jasmine Laws, “Tariffs Update: Will US Consumers Get Refunds? Key Questions Explained,” Newsweek, February 24, 2026.
4 Julian Hinz et al., “America’s own goal: Who pays the tariffs?” Kiel Institute for the World Economy, No. 201, January 2026.
5 JPMorgan Chase Institute, “Tracking international payments: How are midsize firms reacting to tariffs?” February 19, 2026.
