What the Supreme Court Tariff Ruling Means for US Businesses and Why Audit Readiness Is Now Non-Negotiable

The federal government pulled in $195 billion in customs duties during FY 2025. That's more than 250% of what it collected the year before. But here's the thing: all of that money is now tied up in a legal battle that could reshape American trade policy for decades.

Last month, the Supreme Court heard arguments on whether President Trump had the legal authority to impose those tariffs using the International Emergency Economic Powers Act. The justices seemed skeptical of the government's position during oral arguments in November. A decision is expected sometime in early 2026. And depending on which way the Court rules, your business could either be sitting on a pile of refund opportunities or facing serious compliance headaches.

The Clock Is Already Ticking

Most businesses don't realize this, but the first refund deadlines start hitting around December 15, 2025. If you imported goods when the earliest IEEPA tariffs kicked in back in February 2025, you're already up against the wall. Here's how it works: US Customs and Border Protection typically liquidates entries about 314 days after they enter the country. Once that liquidation happens, you have exactly 180 days to file a protest if you think you overpaid. Miss that window and you're done. No appeals, no do-overs, no refunds.

The problem is most companies have no idea whether they overpaid or underpaid until someone actually looks at their filing history line by line. And if the Supreme Court strikes down these tariffs, you better believe CBP is going to scrutinize every refund claim that comes across their desk. They'll be looking for underpayments too.

What Happens If The Government Wins

Let's say the Supreme Court sides with the Trump administration and says the IEEPA tariffs were legal all along. What does that mean for your business? First, those tariffs stay in place. The money you paid isn't coming back unless you can prove an entirely separate compliance error like misclassification or valuation mistakes. Second, future presidents now have a green light to impose emergency tariffs quickly and with minimal oversight. That precedent makes trade planning a lot harder when you know tariffs can pop up on short notice. But here's what most businesses miss: even if the IEEPA tariffs stick around, classification and valuation errors are incredibly common. One study found that some companies have error rates as high as 80% in their HTS classifications. That means you could still be entitled to refunds if your customs broker used the wrong tariff code, miscalculated dutiable value, or missed an available exclusion. You just won't get those refunds automatically. You have to find them yourself, document them properly, and file the right paperwork within the legal deadlines.

This is where companies like Gaia Dynamics come in. Their AI platform reviews your entry history and flags classification errors, valuation issues, and missed exclusions that could translate into real refund dollars.

What You Should Do If The Court Upholds IEEPA

Start with an audit of your past 12 months of entries. Look for HTS codes that might qualify for lower duty rates. Check whether your broker correctly calculated transaction values, especially for related-party imports where transfer pricing matters. Verify that country of origin certifications are accurate and that you're not missing any free trade agreement benefits under USMCA or other programs. If you find errors, file post-summary corrections for unliquidated entries or protests for liquidated entries that are still within the 180-day window.

Even if tariffs stay in place, businesses that audit proactively can recover 3% to 8% of total duties paid. That adds up fast if you're a high-volume importer.

What Happens If The Government Loses

Now flip the scenario. What if the Supreme Court rules that IEEPA doesn't authorize tariffs and strikes down everything imposed under those executive orders? In that case, we're looking at the largest customs refund event in US history. Billions of dollars paid on IEEPA tariffs could suddenly be eligible for refund.

But there's a catch. Actually, several catches. First, refunds are not automatic. You still have to file the paperwork and prove your case. Second, CBP will scrutinize those refund claims closely, and if they find underpayments while reviewing your entries, you could end up owing them money instead of getting a check. Third, even if tariffs are ruled unlawful, getting the money back could take years. When the Harbor Maintenance Tax was ruled unconstitutional, it required a congressional appropriation before refunds could actually be issued.

The refund mechanics get complicated fast. For entries that haven't been liquidated yet, you can file a post-summary correction to adjust the duties owed. That's the simpler path. For entries that have already liquidated, you need to file a formal protest within 180 days of the liquidation date. Many importers are now filing lawsuits in the Court of International Trade to preserve their refund rights while waiting for the Supreme Court to rule. Companies like Costco have already filed to protect potential refunds on entries that are at risk of falling outside the protest window.

The Underpayment Risk Nobody's Talking About

Here's the scary part. Let's say you file protests seeking $500,000 in IEEPA refunds across 200 entries. CBP reviews those entries and discovers that on 30 of them, your customs broker used HTS codes that actually under-assessed Section 301 duties by $80,000. Now you owe CBP money, plus interest, and possibly penalties if they think the error was negligent. Your $500,000 refund claim just turned into a $80,000 bill.

This is not a hypothetical. It happens. CBP audits regularly uncover underpayments when businesses file protests or seek refunds. The more entries you claim, the more exposure you have if there are errors in your filing history.

That's why smart businesses are running pre-audit simulations before they file anything. Gaia Dynamics' platform checks your entire entry history for both overpayments and underpayments. If it finds underpayments, you can file corrective disclosures or prior disclosures to CBP before they discover the errors themselves. That usually reduces or eliminates penalties.

What You Should Do Right Now If The Court Strikes Down IEEPA

Pull your entry documentation immediately. Start with entries from February 2025 forward when the earliest IEEPA tariffs took effect. Separate them into two buckets: unliquidated entries and liquidated entries. For unliquidated entries, you have more flexibility. You can file post-summary corrections up to 300 days from entry and at least 15 days before liquidation. For liquidated entries, you're on a strict 180-day countdown. Some of those deadlines are already passing right now in December 2025.

If you're a high-volume importer with thousands of entries, you can't do this manually. You need software that can process large datasets quickly, cross-reference HTS codes against CBP rulings, verify origin documentation, and flag entries where the math doesn't add up. That's exactly what Gaia's AI models are designed to do. The system continuously learns from evolving trade policies and provides real-time compliance insights.

Both Outcomes Require Audit Readiness

Whether the Supreme Court upholds or strikes down IEEPA tariffs, your financial outcome depends on one thing: the accuracy of your customs filings. Overpayments are refund opportunities if you document them correctly and file within deadlines. Underpayments are liabilities if regulators find them first.

Most businesses have no idea which situation they're in. That's the problem. According to recent industry analysis, the effective tariff rate jumped to 2.6% in 2025 due to these emergency tariffs. With that kind of volume and complexity, errors are inevitable. The question is whether you find them before CBP does.

A proper audit reviews HTS classifications against binding CBP rulings, verifies transaction values for related-party transactions, confirms country of origin under free trade agreement rules, and checks for missed exclusions or drawback opportunities. It also looks for underpayments that could trigger penalties if discovered during a CBP audit or refund review.

The Time To Act Is Now

The Supreme Court will rule on IEEPA tariffs sometime in the next few months. But for many businesses, the deadlines are already here. The earliest liquidation dates for IEEPA entries started passing in mid-December 2025. If you haven't filed protests or preserved your rights through a Court of International Trade lawsuit, you're losing refund opportunities every day.

Even if you're not sure whether the Court will strike down the tariffs, you should be auditing your filings anyway. Classification errors, valuation mistakes, and missed exclusions exist regardless of what happens with IEEPA. Those errors cost you money today. Fixing them now puts cash back in your business and reduces your risk if CBP ever audits you.