What Every Multinational Should Know About… Managing the Aftermath of the Supreme Court’s IEEPA Tariff Decision (Part IV)

Following the U.S. Supreme Court’s decision invalidating the IEEPA tariffs, attention is now shifting from whether the tariffs were lawful to how companies can actually recover the billions of dollars at stake. As discussed in the first part of this five-part series, the refund process will likely be complex, protracted, and highly fact-specific, with key issues to be resolved by the Court of International Trade (CIT).

At the same time, many companies face two other, often equally important, questions: now that the Court has ruled, who is potentially entitled to refunds? And what should be done to protect the organization’s importations while the administration is pivoting to the use of new tariff authorities and is continuing to crack down on potential tariff evasion?

To help answer these questions and to help companies navigate the aftermath of this historic Supreme Court decision, the Foley International Trade & National Security and Supply Chain teams are providing a five-article series regarding how to manage the aftermath of the Supreme Court’s IEEPA decision. The series covers:

• Part I: Preserving the Right to IEEPA Tariff Refunds (found here).
• Part II: Contractual Issues for Companies That Are Importers of Record (found here).
• Part III: Customs & Supply Chain Issues for Companies That Are Importers of Record (found here).
• Part IV: Contractual Issues for Companies That Indirectly Paid IEEPA Tariffs.
• Part V: Avoiding Common Pitfalls.

Part IV follows below.

For Companies That Indirectly Paid the IEEPA Tariffs …

The conundrum for companies that indirectly paid the IEEPA tariffs, such as those that received price increases or outright tariff surcharges, is that the importing system is set up so that all interactions — and all refunds — are made by CBP directly to the importer of record. Nonetheless, companies that indirectly paid the IEEPA tariffs may have contractual options, or potentially can use commercial leverage, to seek a refund of some or all of the price increases. For companies in this position, we recommend working through the following steps: 

Step 1: Have You Mapped Out Your Purchasing and Procurement Operations?

For companies that did not act as the importer of record, the starting point is not customs data; it is understanding how goods are purchased, from whom, and under what commercial terms. In many organizations, this requires a structured mapping exercise across procurement, supply chain, and finance functions.

This step is critical because companies often lack a centralized view of where tariff costs were incurred indirectly, particularly where purchasing is decentralized or spread across multiple business units. Companies concerned about seeking a potential IEEPA tariff refund from business partners accordingly should undertake a targeted review of their purchasing and procurement operations, including:

• Identify all relevant purchasing channels, including:
  • direct purchases from foreign suppliers (e.g., DDP or other delivered terms);
  • purchases from U.S.-based distributors or resellers;
  • intercompany purchases from affiliated importers;
  • contract manufacturers or OEM arrangements; and
  • hybrid or non-standard arrangements that may obscure responsibility.
• Identify where tariff costs were introduced into pricing, including:
  • supplier-imposed tariff surcharges;
  • price increases tied (explicitly or implicitly) to tariffs;
  • adjustments reflected in transfer pricing or cost allocations; and
  • general price increases.
• Segment purchases by business unit, product line, and supplier, including:
  • high-volume or high-value suppliers;
  • products most affected by IEEPA tariffs; and
  • business units with significant exposure to tariff-affected goods.
• Engage internal stakeholders to validate practices, including:
  • procurement and sourcing teams;
  • supply chain and logistics personnel; and
  • finance and accounting teams.

Key takeaway: Companies that indirectly paid IEEPA tariffs often do not have a single, unified view of where and how those costs arose. A disciplined mapping of purchasing and procurement operations is essential to identifying exposure, locating potential recovery opportunities, and informing the steps that follow.

Step 2: Have You Identified All Transactions and Suppliers Where IEEPA Tariffs Arguably Were Passed onto Your Company?

Once purchasing structures are mapped, the next step is to move from theoretical exposure to actual financial impact – identifying where IEEPA tariffs were in fact passed through to your company, and by which suppliers. This step requires a more granular, transaction-level analysis focused on pricing, invoicing, and cost allocation, rather than procurement structure alone.

Companies should:

• Identify suppliers that implemented tariff-related pricing changes, including:
  • suppliers that imposed explicit tariff surcharges;
  • suppliers that increased prices contemporaneously with IEEPA tariffs; and
  • suppliers that communicated tariff-related cost increases (formally or informally).
• Review invoices and billing practices, including:
  • line-item tariff surcharges or add-ons;
  • notations and emails referencing tariffs, duties, or government measures; and
  • changes in pricing structure during the IEEPA tariff period.
• Analyze pricing trends over time, including:
  • price increases that correlate with the imposition or expansion of IEEPA tariffs;
  • whether pricing later stabilized or remained elevated; and
  • differences across suppliers or product categories.
• Trace tariff costs applicable to specific transactions, including:
  • identifying which products or SKUs were affected;
  • linking purchases to time periods when IEEPA tariffs were in effect; and
  • quantifying the magnitude of tariff-related cost increases.
• Segment suppliers by level of exposure, including:
  • high-confidence pass-through (explicit surcharge or clear linkage);
  • likely pass-through (timing and pricing correlation); and
  • uncertain or ambiguous cases.
• Identify gaps or evidentiary challenges, such as:
  • bundled pricing where tariffs were not separately identified;
  • lack of documentation tying price increases to tariffs; and
  • inconsistent application of surcharges across transactions.

Key takeaway: Step 1 identifies where tariff exposure could exist; Step 2 identifies where it actually does. Companies that can pinpoint specific suppliers, transactions, and amounts will be far better positioned to assert and negotiate recovery claims in the steps that follow.

Step 3: What Do Your Contracts Say About Tariffs and Cost Allocation?

Once companies have identified where tariff costs were passed through, the next step is to determine whether those costs were contractually permitted and how they were characterized. This is the legal foundation for any effort to recover tariff-related amounts from suppliers or upstream parties.

In many cases, contracts were not drafted with this level of tariff volatility in mind, and provisions may be incomplete, one-sided, or ambiguous, particularly with respect to reversals or refunds. Identifying the strength of contractual arguments accordingly is essential before reaching out for potential sharing of refunds. Companies accordingly should conduct a focused review of relevant agreements, including:

• Tariff and duty allocation clauses, including:
  • which party bears the risk of increases in duties or tariffs;
  • whether allocation is absolute or tied to specific conditions; and
  • whether the clause applies broadly (e.g., “taxes” or “all government charges”) or narrowly.
• Change-in-law provisions, including:
  • whether tariffs qualify as a “change in law” under the agreement;
  • whether the clause permits price adjustments and under what conditions; and
  • whether it is limited to cost increases or also applies to cost decreases.
• Pricing and cost pass-through mechanisms, including:
  • whether pricing is fixed, indexed, or cost-plus;
  • whether the contract allows for automatic or unilateral adjustments or requires renegotiation; and
  • whether there are caps, thresholds, or materiality triggers.
• Surcharge provisions and practices, including:
  • whether tariff-related charges were contractually authorized;
  • whether surcharges were separately identified or embedded in pricing; and
  • whether surcharges were expressly tied to specific tariffs (e.g., IEEPA measures).
• Incoterms and delivery structures, including:
  • whether the supplier assumed responsibility for duties (e.g., DDP); and
  • how risk allocation under Incoterms aligns (or conflicts) with contractual pricing provisions.
• Notice and documentation requirements, including:
  • whether suppliers were required to provide notice before implementing price increases;
  • whether supporting documentation was required and provided; and
  • whether procedural requirements were followed in practice.
• Course of dealing, course of performance, and commercial practice, including:
  • how tariff-related costs were actually communicated and implemented;
  • whether the parties treated the charges as temporary, contingent, or permanent; and
  • whether there were objections, negotiations, or accommodations.
• Gaps, inconsistencies, and ambiguities, including:
  • contracts that permit tariff increases but are silent on decreases;
  • inconsistent language across suppliers or business units; and
  • reliance on informal or extra-contractual pricing adjustments.

Key takeaway: Contract language and the course of dealings and negotiations/renegotiations will largely determine whether tariff costs were properly passed through and whether there is a contractual basis to seek their return. Many agreements clearly address cost increases, but few address what happens when those costs are later invalidated, creating significant room for interpretation and dispute.

Step 4: Do Your Contracts Address Refunds, Rebates, or Reversals?

Even where contracts clearly permitted tariff-related price increases, a separate question is whether they address what happens if those tariffs are later reduced, refunded, or invalidated. In many agreements, this issue is either addressed asymmetrically (upward only) or not addressed at all.

For companies that indirectly paid IEEPA tariffs, this is the inflection point: does the contract require the supplier to return tariff-related amounts if the supplier ultimately receives a refund? Or will negotiating a return depend largely on commercial leverage? But even in the latter case, a largely commercial negotiation could be strengthened by contractual arguments. Companies accordingly should conduct a targeted review focused specifically on refund mechanics, including:

• Express refund or rebate provisions, including:
  • whether the agreement requires pass-through of cost reductions;
  • whether government rebates or refunds must be credited to the buyer; and
  • whether there are true-up or reconciliation mechanisms.
• Two-way price adjustment clauses, including:
  • whether pricing adjusts both upward and downward based on duty changes;
  • whether the language is symmetrical or limited to increases only; and
  • whether downward adjustments require affirmative action or notice.
• Surcharge characterization, including:
  • whether tariff surcharges were expressly tied to specific tariffs (e.g., IEEPA measures);
  • whether surcharges were described as temporary or contingent; and
  • whether invoice language supports a refund argument.
• Cost-plus or index-based pricing structures, including:
  • whether pricing formulas automatically reflect changes in underlying costs;
  • whether tariffs were incorporated as a discrete cost component; and
  • whether subsequent cost reductions must flow through under the formula.
• Audit and information rights, including:
  • rights to review supplier cost data;
  • rights to verify whether refunds were received; and
  • access to documentation regarding duty payments or litigation participation.
• Silence or ambiguity in the contract, including:
  • agreements that allow tariff increases but are silent on decreases;
  • provisions that reference “cost increases” but not cost reversals; and
  • gaps between formal contract language and actual commercial practice.
• Interaction with Incoterms, including:
  • Whether the supplier assumed responsibility for duties under DDP.
  • Whether Incoterms allocation aligns (or conflicts) with refund entitlement arguments.
  • In many cases, the contract will not explicitly address refund scenarios. Where that is true, recovery may depend on broader contractual interpretation principles, including: (1) whether tariff-related price increases were expressly contingent; (2) whether charges were framed as pass-through costs rather than permanent price changes; or (3) whether commercial practice supports an expectation of reversal

Key takeaway: The presence or absence of refund and reversal language will often determine the strength of any recovery claim. Many agreements were drafted to address tariff increases, not tariff invalidations. That asymmetry is where negotiation leverage and legal strategy will matter most.

Step 5: Can You Prove That You Actually Paid the Tariffs?

Even where contracts support recovery, the ability to obtain reimbursement will depend heavily on evidence. Companies must be able to demonstrate – not just assert – that they actually bore the economic cost of the IEEPA tariffs, and to what extent.

In many cases, this is where otherwise strong claims weaken. Tariff costs are often embedded in pricing, inconsistently applied, or poorly documented, making it difficult to tie specific charges to specific transactions.

Companies should take steps to build a clear, supportable evidentiary record, including:

• Identify direct evidence of tariff pass-through, including:
  • invoices showing line-item tariff surcharges;
  • pricing notices or communications referencing IEEPA tariffs; and
  • contractual amendments or side letters tied to tariff increases.
• Analyze indirect or embedded pricing impacts, including:
  • price increases that correlate with the timing of IEEPA tariff implementation:
  • changes in margins or cost structures during the tariff period; and
  • internal pricing models that reflect tariff-driven adjustments.
• Link tariff costs to specific transactions, including:
  • mapping purchases to the time periods when IEEPA tariffs were in effect.
  • identifying affected products, SKUs, or product categories. and
  • quantifying tariff-related cost increases on a transaction-by-transaction basis, where possible.
• Reconcile internal financial data, including:
  • accounts payable records;
  • landed cost calculations; and
  • cost accounting or margin analyses.
• Evaluate intercompany cost allocations, including:
  • whether affiliated importers passed through tariffs via transfer pricing adjustments;
  • how those costs were allocated across entities and jurisdictions; and
  • whether documentation supports the allocation methodology.
• Segment claims by strength of evidence, including:
  • high-confidence claims (clear surcharge or direct linkage);
  • moderate claims (strong timing and pricing correlation); and
  • lower-confidence claims (embedded or unclear pricing impacts).
• Identify evidentiary gaps or risks, such as:
  • bundled pricing with no clear tariff component;
  • inconsistent surcharge application across suppliers or time periods; and
  • lack of documentation tying price increases to tariffs.
• Prepare for counterarguments, including:
  • assertions that price increases reflected general market conditions rather than tariffs;
  • claims that tariffs were only one of multiple cost drivers; and
  • arguments that costs were absorbed or offset elsewhere.

Key takeaway: Recovery will turn not only on contractual rights, but on the ability to prove economic impact. Companies that can clearly trace tariff costs to specific transactions and amounts will be far better positioned to assert and negotiate recovery claims.

Step 6: What Is Your Exposure to Supplier Resistance or Disputes?

Even where contracts and evidence support recovery, companies should realistically assess that many suppliers will resist returning tariff-related amounts. Refund recovery in this context is rarely automatic – it is often a commercial negotiation informed by legal positioning.

Understanding likely areas of resistance and preparing for them in advance will significantly improve outcomes.

Companies should evaluate:

• Likely supplier positions and defenses, including:
  • “Prices were fixed and not contingent on tariffs.”
  • “Tariffs were one of many cost drivers, not separately recoverable.”
  • “No contractual obligation exists to refund or credit amounts.”
  • “Any refund belongs to the importer of record.”
  • “Pricing changes reflected broader market conditions.”
• Strength of contractual language, including:
  • whether agreements clearly characterize tariffs as pass-through costs;
  • whether there are gaps or ambiguities that suppliers may rely upon; and
  • whether notice or procedural requirements were followed when tariffs were imposed.
• Quality and clarity of supporting evidence, including:
  • whether tariff costs were explicitly identified (e.g., surcharges);
  • whether pricing changes can be clearly tied to IEEPA tariffs; and
  • whether documentation is consistent across transactions and time periods.
• Supplier-specific risk profiles, including:
  • strategic suppliers versus transactional vendors;
  • suppliers with significant bargaining power or limited alternatives; and
  • suppliers facing their own financial or legal constraints.
• Commercial relationship considerations, including:
  • importance of the supplier relationship to ongoing operations;
  • upcoming contract renewals or renegotiations; and
  • sensitivity to disputes that could disrupt supply.
• Dispute resolution frameworks, including:
  • governing law and dispute resolution clauses (e.g., arbitration vs. litigation);
  • jurisdictional considerations, particularly for foreign suppliers; and
  • cost, timing, and practical implications of formal dispute processes.
• Internal risk tolerance and objectives, including:
  • whether the company is prepared to pursue formal claims if necessary;
  • prioritization of high-value claims versus maintaining relationships; and
  • alignment between legal, procurement, and business leadership on strategy.

Key takeaway: Supplier resistance should be expected. Companies that proactively assess dispute risk – across legal, evidentiary, and commercial dimensions – will be better positioned to pursue recovery strategically, rather than reactively.

In many cases, recovery of tariff-related amounts will not turn solely on strict legal entitlement, but on leverage—both contractual and commercial. Even where contracts are ambiguous, companies with meaningful leverage can often achieve favorable outcomes through structured engagement rather than formal disputes.

The key is to identify and thoughtfully deploy that leverage in a way that aligns with both legal positioning and business objectives.

Companies should assess:

• Contractual leverage, including:
  • audit rights or cost verification provisions;
  • true-up, rebate, or adjustment mechanisms;
  • termination, suspension, or renegotiation rights; and
  • most-favored-customer or pricing consistency provisions.
• Commercial leverage, including:
  • the company’s importance as a customer (volume, strategic value);
  • concentration of spend with particular suppliers;
  • availability of alternative suppliers or sourcing options; and
  • upcoming contract renewals, extensions, or rebids.
• Timing leverage, including:
  • opportunities to raise issues in connection with:
  • contract renewals;
  • pricing resets;
  • new purchase orders or sourcing decisions; and
  • alignment with when suppliers may receive refunds or clarity on entitlement.
• Information leverage, including:
  • access to data regarding supplier costs, duty payments, or refund claims;
  • ability to request or require transparency under contract terms; and
  • insight into supplier exposure or litigation posture.
• Relationship dynamics, including:
  • whether the relationship is long-term and strategic versus transactional;
  • whether a collaborative resolution is feasible; and
  • the potential impact of disputes on continuity of supply.
• Internal alignment and execution, including:
  • coordination between legal, procurement, and commercial teams;
  • consistency in messaging and negotiation posture across suppliers; and
  • prioritization of high-value or high-probability recovery opportunities.
• Structured engagement strategies, including:
  • raising issues through commercial discussions before escalating to formal claims;
  • framing requests as part of broader commercial alignment (e.g., pricing fairness, long-term partnership); and
  • sequencing communications to preserve both leverage and relationships.

Key takeaway: In this context, leverage is often as important as legal entitlement. Companies that understand and strategically deploy their contractual rights, commercial position, and timing will be far better positioned to secure meaningful recovery – often without the need for formal dispute proceedings.

Step 8: What Should You Do Now to Preserve and Assert Your Rights?

Having identified exposure, contractual positioning, evidentiary support, and potential leverage, the final step is to move from analysis to action. In this environment, delay can weaken both legal and commercial positions. Companies should take measured but proactive steps to preserve rights, position claims, and engage counterparties in a structured manner. To do so, companies should consider the following near-term actions:

• Prioritize high-impact opportunities, including:
  • suppliers with the largest tariff pass-through amounts;
  • relationships where contractual language and evidence are strongest; and
  • counterparties likely to receive significant refunds.
• Consolidate and organize supporting materials, including:
  • contracts and amendments;
  • invoices, surcharge records, and pricing communications;
  • internal analyses demonstrating tariff pass-through; and
  • summaries of claims by supplier and amount.
• Develop a coordinated internal strategy, including:
  • alignment among legal, procurement, finance, and business leadership;
  • clear decision-making authority regarding claims and negotiations; and
  • consistency in approach across suppliers and business units.
• Provide notice of potential claims, where appropriate, including:
  • reserving rights under applicable contracts;
  • requesting information regarding supplier refund actions or litigation; and
  • signaling expectations regarding potential pass-through of refunds.
• Engage suppliers in structured discussions, including:
  • initiating dialogue before positions harden;
  • framing discussions around contractual rights, fairness, and commercial alignment; and
  • exploring negotiated solutions (e.g., credits, future pricing adjustments, shared recovery).
• Monitor developments affecting recovery, including:
  • progress of litigation at the Court of International Trade;
  • potential administrative refund mechanisms; and
  • supplier participation in refund claims or litigation.
• Evaluate escalation pathways, including:
  • formal contract claims or dispute resolution mechanisms;
  • strategic use of audit rights or information requests; and
  • selective escalation for high-value or high-priority claims.
• Coordinate with broader tariff and supply chain strategy, including:
  • ensuring recovery efforts align with ongoing sourcing and pricing decisions; and
  • incorporating lessons learned into future contract drafting and supplier management.

Key takeaway: Refund entitlement and refund recovery are distinct. Companies that act early to preserve rights, organize evidence, and engage counterparties strategically will be best positioned to secure meaningful recovery – while maintaining control over both legal and commercial outcomes.

Step 9: Are You Prepared for Potential Disputes?

Given the magnitude of potential refunds and the contractual ambiguities in many arrangements, disputes should be expected. These disputes may arise not only with suppliers, but also with customers, affiliates, and other counterparties across the supply chain. Companies accordingly should proactively prepare for potential disputes by focusing on the following areas:

• Supplier disputes over refund entitlement, including:
  • disagreements where contracts are silent or ambiguous regarding refunds;
  • competing interpretations of tariff pass-through versus fixed pricing; and
  • disputes over whether refunds must be returned, shared, or retained.
• Customer claims for reimbursement, including:
  • downstream purchasers seeking recovery of tariff-related price increases;
  • claims based on surcharge language, pricing adjustments, or commercial expectations; and
  • potential “pass-through chain” disputes across multiple tiers of the supply chain.
• Statute of limitations and timing risks, including:
  • contractual notice and claim deadlines;
  • litigation or arbitration filing deadlines; and
  • risks of waiver if claims are not timely asserted.
• Evidentiary challenges, including:
  • the need to allocate tariff costs at a transaction level;
  • difficulties in proving pass-through where costs were embedded in pricing; and
  • inconsistencies in documentation across suppliers, products, or time periods.
• Jurisdictional and procedural complexity, including:
  • cross-border disputes involving foreign suppliers;
  • differing dispute resolution mechanisms (e.g., arbitration vs. litigation); and
  • enforcement considerations across jurisdictions.
• Internal preparedness, including:
  • preservation of relevant documents and communications;
  • development of clear legal and factual theories; and
  • alignment among legal, procurement, and business teams on dispute strategy.
• Strategic positioning, including:
  • identifying which disputes are worth pursuing versus resolving commercially;
  • prioritizing high-value or high-likelihood claims; and
  • balancing recovery efforts with ongoing business relationships.

Key takeaway: In this environment, disputes are a natural extension of the refund process. Companies that prepare early, by preserving evidence, understanding their legal position, and aligning internal stakeholders, will be significantly better positioned to achieve favorable outcomes, whether through negotiation or formal dispute resolution.

*           *           *

While the Supreme Court’s decision definitively closes the door on IEEPA-based tariffs (while still leaving open the mechanism and timing of refunds, unfortunately), it opens a new and complex phase focused on refund recovery and allocation. At the same time, the administration’s pivot to alternative tariff authorities (Sections 122, 232, and 301) underscores that tariff risk remains a central feature of the current trade environment.

Companies that take proactive steps to prepare their strategy for seeking a share of refund, including by reviewing contracts, organizing data, and aligning legal strategies, will be best positioned not only to recover past duties, but also to navigate the next wave of trade measures.

If you have questions about these developments, including strategies for securing refunds, contract analysis, or customs audit readiness, please reach out to the authors or your Foley & Lardner relationship attorney. 

The Foley International Trade & National Security Practice

The Foley International Trade & National Security Team covers the full gamut of international trade needs, including for tariffs, customs, supply chain/supply chain integrity, trade remedies/antidumping/countervailing duty, export controls, economic sanctions, and CFIUS national security filings. Our Tariff & International Trade blog regularly publishes practical guidance, like this client alert, on all international trade topics and compiles it by topic area on the Foley Tariff & International Trade Resources blog. Click Here To Register for our email list to receive future emails and practical international regulatory compliance tips, including our biweekly What Every Multinational Should Know articles.

The Foley Supply Chain Practice

The Foley Supply Chain Team helps create, strengthen, and protect every link of your supply chain. Our multidisciplinary group of attorneys brings vast experience across sectors and industries and provides practical, business‑focused legal support across every aspect of supply chain operations — from commercial contracts and compliance to logistics, supply of goods, manufacturing, and risk management. For insights on other trending supply chain topics and to get to know our supply chain team, please feel free to reach out to the authors or to visit Foley’s Supply Chain Team page.