On February 20, 2026, the Supreme Court ruled, correctly in my view, that the International Emergency Economic Powers Act (IEEPA) does not authorize tariffs.

While the case was pending, the government collected billions of dollars in IEEPA tariffs. Because the government lost, it must now refund all that money, with interest.

[...]

The jury is still out on how eagerly the government will cooperate with the refund process. Early signs, however, are not promising. Among other things, after the Court of International Trade issued an order directing the government to immediately stop liquidating entries subject to the illegal tariffs, the government asserted it couldn’t comply with the order.

[...]

It would have been nice if the government had been open about these challenges before the Supreme Court’s decision. The government successfully persuaded the Federal Circuit to stay its mandate on the theory that if the government lost, the importers would get refunds. The government did not mention that (1) it would push for a 90-day stay even after the Supreme Court’s decision; (2) even after that stay was denied, it would be forced to keep liquidating entries with IEEPA tariffs because its possibly FORTRAN-driven computer system made it impossible to stop the tariff snowball from rolling downhill; and (3) technology for processing refunds doesn’t currently exist.

There is nothing we can do about this now. I agree with Elsa that the past is in the past. But the government has announced a new set of so-called Section 122 tariffs. In my opinion, these tariffs are also illegal and the government will have to refund them too. The government will no doubt argue that any injunction against Illegal Tariffs II should be stayed pending Federal Circuit and Supreme Court review, as with Illegal Tariffs I. The stay should be denied. The government might say that a stay is unnecessary because the importers are guaranteed to get refunds, but fool me twice, shame on me. And you know what will happen: if the government ultimately loses on Illegal Tariffs II, it is going to say that it is too hard to issue refunds because it is too busy dealing with refunds for Illegal Tariffs I.

(Omitted: Unikowsky speculates about a legal system where AI is used instead.)

So if everyone fulfills their role—if the lawyers try their best to be both persuasive and credible and the judge tries to resolve the dispute as accurately as possible—then we’ll have AI deciding between two AI-written submissions, with the human lawyers claiming that their submissions are credible precisely because humans were not involved. So much for our legal system.

On the other hand, the current situation is not much better. The government claims it has no choice but to keep billions of dollars in illegally-exacted tariffs, and there’s nothing anyone can do about it.