by WANG Zhen

The US Supreme Court has ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose sweeping tariffs, a decision that comes as the US subsidiaries of China's electric vehicle maker BYD pursue a lawsuit seeking refunds of duties already paid.

In its February 20 ruling, the court said IEEPA does not provide a legal basis for the large-scale tariffs introduced after the Trump administration declared a national emergency in February 2025. The orders had cited border security, fentanyl supply chains and trade deficits as grounds for invoking emergency powers to impose additional duties on selected imports.

Before the ruling, four US-registered subsidiaries of BYD filed suit at the US Court of International Trade seeking reimbursement of tariffs paid under IEEPA. As importers of record, they are legally entitled to challenge duty assessments and pursue refunds.

The complaint, reviewed by Jiemian News, says the subsidiaries have paid IEEPA tariffs on certain imported components and asserts they have suffered financial harm as result of those duties. Their US operations span electric buses, heavy-duty vehicle batteries and energy storage systems.

BYD argues in its complaint that the president lacks authority under IEEPA to impose tariffs and that the 2025 executive orders, along with subsequent amendments, violate Article I of the US Constitution and the non-delegation doctrine, which limits how far legislative authority can be transferred to the executive branch.

The company is among numerous challengers. Prior to the Supreme Court ruling, multiple US importers and some state governments had filed lawsuits over IEEPA-based tariffs. Wine importer V.O.S. Selections and others won a ruling in their favor at the trade court in April 2025, and the dispute proceeded to the Supreme Court, which heard oral arguments on November 5.

Although the court rejected IEEPA as a basis for tariff collection, it did not specify how previously collected duties should be handled. In a separate opinion, Justice Brett Kavanaugh said the ruling did not clarify whether tariffs already paid must be refunded or how such repayments would proceed, warning the process could prove "chaotic".

Data cited by the University of Pennsylvania's Wharton Budget Model, based on US Customs and Border Protection figures, show cumulative IEEPA tariff collections had reached about US$133.5 billion as of December 14, 2025.

US Customs and Border Protection said it will stop collecting IEEPA tariffs from February 24 but has yet to outline how previously collected duties would be refunded.

Ted Murphy, a partner at Sidley Austin, told Jiemian News that the ruling was not confined to future tariffs, creating an opportunity for importers to seek repayment. However, refunds would not be automatic and would likely require both court action and administrative procedures.

In its filing, BYD said it must file suit now, citing the US customs liquidation system. Under customs rules, duties are typically finalized about 314 days after entry, after which importers have 180 days to lodge a protest.

The complaint says some of BYD's entries have already entered liquidation and argues that because Customs enforces executive orders without assessing their legality, the dispute centers on the validity of those orders rather than on duty calculations.

BYD is seeking reimbursement of tariffs already paid, along with protection against future assessments under the contested measures.

CHEN Xiaohong, a senior industry expert, told Jiemian News that nearly 1,000 companies have filed cases at the trade court over IEEPA tariffs, highlighting the scale of the dispute.

He said the litigation wave underscores the legal risks companies face in mature markets, where disputes are increasingly resolved through local courts.

BYD's case remains under review at the US Court of International Trade. How and when any refund mechanism will be implemented remains uncertain and will depend on subsequent judicial interpretation and administrative follow-through.

BYD's US subsidiaries had not responded to requests for comment from Jiemian News by the time of publication.