Supreme Decision Strikes IEEPA Tariffs & Administration Response

On February 20th, the Supreme Court issued a decision in Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs.

The Court concluded that while IEEPA permits the President to regulate economic movement during a national emergency, it does not grant sweeping authority to levy duties or tariffs on imported goods. As a result of this decision, tariffs imposed solely under IEEPA lack statutory authority, and are voided.

For the premium cigar industry, this ruling directly affects any tariffs that were applied under IEEPA-based reciprocal tariffs. Premium cigars imported from Honduras, the Dominican Republic, and Nicaragua that were subject to IEEPA emergency tariffs no longer have a valid legal basis under this decision. This ruling does not affect federal excise taxes, state tobacco taxes, or tariffs imposed under separate statutory authorities. The “reciprocal” tariffs that were applied broadly to Honduras, Nicaragua, and the Dominican Republic were imposed under the International Emergency Economic Powers Act, and therefore, are voided by this decision. Other nations which had “reciprocal” tariffs imposed under the IEEPA are also voided.

This is a developing situation. Federal agencies, including U.S. Customs and Border Protection, will need to issue guidance regarding implementation of the Court’s decision. The Premium Cigar Association is closely monitoring developments and will provide additional information and clarification to members as more details become available in the coming days.

In a statement following the release of the Supreme Court decision, President Trump said he will impose a new 10% global tariff under a different trade authority.

The new 10% global tariff will be implemented pursuant to Section 122 of the Trade Act of 1974, which authorizes the President to impose a baseline tariff of up to 15% for a period not to exceed 150 days. President Trump also noted that he will initiate investigations under Section 301 to protect the country from unfair trading practices. In his statement, President Trump further emphasized that other trade authorities, including Section 122 and Section 301, remain fully in effect, and that the Court’s ruling does not impact current or future tariffs.