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

Contractual Issues for Importers of Record

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 imports while the Trump administration is pivoting to new tariff authorities and 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 Importers of Record.
• Part III: Customs & Supply Chain Issues for of Record.
• Part IV: Contractual Issues for Companies That Indirectly Paid IEEPA Tariffs.
• Part V: Avoiding Common Pitfalls.

Part II follows below.

Contractual Issues for Companies That Are Importers of Record …

The importer of record is the entity that initially pays all tariffs and thus is the entity that would receive any IEEPA tariff refunds. Nonetheless, behind the scenes there often are a variety of mechanisms importers of record may have used to handle the often unexpected tariffs, including pushing back on suppliers for price concessions, using surcharges to pass along tariffs, or general price increases. In many cases, other parties may be looking to share any potential refunds. For importers of record potentially facing this situation, we recommend working through the following steps:

Step 1: Did You Pay IEEPA Tariffs?

The threshold question is straightforward but critically important: Did your company act as the importer of record and directly pay IEEPA tariffs to U.S. Customs and Border Protection (CBP)? Only the importer of record has a direct legal relationship with CBP and, therefore, a direct claim for any refund of duties paid.

In many organizations (particularly those with complex global structures), this answer is not always obvious. Import activity may be conducted through affiliates, U.S. subsidiaries, or third-party importers, and tariff costs may be paid by one entity but economically borne by another.

Accordingly, companies should take the following steps to establish a clear and defensible baseline:

• Confirm importer-of-record status for all relevant entries, including:
  • all entities within the corporate group;
  • related parties acting as importers; and
  • any third-party importers operating on the company’s behalf.
• Extract and analyze ACE data for each importer of record to identify all entries subject to IEEPA tariffs, including entries reflecting HTS Chapter 99 provisions (e.g., 9903.01/9903.02 series).
• Quantify total duties paid, including:
  • IEEPA tariffs; and
  • interest, penalties, or other amounts associated with those entries.
• Reconcile customs broker data with internal financial records, including:
  • entry summaries (CBP Form 7501 data);
  • duty payment records; and
  • accounts payable and landed cost data.
• Identify entries across all relevant time periods, considering variations in the levels of IEEPA tariffs, including:
  • the initial fentanyl-based tariffs;
  • subsequent tariff expansions (e.g., April 2025 “Liberation Day” global and reciprocal tariffs);
  • changes to tariff levels; and
  • exemptions, such as those for USMCA-compliant goods.

Key takeaway: Only importers of record have a direct claim against the government for refunds. Establishing a complete and accurate record of where your company did (and did not) import, and the IEEPA tariffs paid, is the essential first step before turning to downstream recovery, contractual allocation, or litigation strategy.

Step 2: Did You Pass on IEEPA Tariffs?

For many importers, the economic burden of the IEEPA tariffs did not remain with the importer of record but instead was passed (formally or informally) to customers, distributors, or other parties. Determining whether, how, and to whom those costs were passed on is a critical step in evaluating both refund entitlement and potential downstream obligations.

In particular, importers of record should assess not only whether tariffs were passed on, but whether they can demonstrate that allocation with credible, transaction-level evidence. Companies should:

• Identify how tariff costs were reflected commercially, including whether they were:
  • embedded in overall product pricing (i.e., increased base prices without explicit attribution);
  • separately itemized as a tariff surcharge or line item on invoices;
  • incorporated into cost-plus or margin-based pricing formulas;
  • reflected through transfer pricing adjustments or intercompany true-ups; or
  • reflected in general price increases.
• Determine who ultimately bore the economic cost, including:
  • specific end-user customers or distributors;
  • particular business units or product lines; or
  • affiliated entities within the corporate group.
• Assess the timing and structure of pricing changes, including whether:
  • price increases were explicitly tied to the imposition of IEEPA tariffs;
  • pricing adjustments were temporary (tariff-specific) or permanently embedded into baseline pricing; or
  • there were delays or mismatches between when tariffs were imposed and when pricing was adjusted.
• Evaluate the ability to trace tariff costs, including whether the company can:
  • link specific import entries to downstream sales transactions;
  • identify which customers were charged tariff-related increases; and
  • quantify the amount of tariff passed through on a transaction-by-transaction basis.
• Review supporting documentation, including:
  • invoices and surcharge line items;
  • internal pricing models and cost build-ups;
  • customer communications referencing tariff-driven price increases; and
  • transfer pricing documentation and intercompany agreements.
• Identify areas of ambiguity or risk, such as:
  • blended pricing where tariffs were not separately identified;
  • inconsistent application of surcharges across customers or time periods; and
  • situations where tariffs were absorbed in part or in full.

Key takeaway: Understanding — and proving — who ultimately bore the economic burden of the tariffs will be central to both commercial recovery and potential disputes. Companies that cannot clearly trace tariff pass-through may face challenges in retaining refunds or defending against reimbursement claims from customers or counterparties.

Step 3: What Contractual Rights Did You Use to Pass on Any IEEPA Tariffs?

Whether tariff costs can or should be returned depends heavily on the contractual mechanisms used to impose those costs in the first place. In many cases, companies moved quickly in 2025 to implement price increases or surcharges tied to the IEEPA tariffs, often relying on broadly drafted provisions that were not designed for this level of tariff volatility.

Now that the tariffs have been invalidated, those same provisions will be scrutinized to determine whether they permit, require, or prohibit a reversal of those charges. Companies should undertake a focused contract review, including:

• Tariff and duty allocation clauses, including:
  • which party bears the risk of new or increased duties;
  • whether the contract includes delivery terms that allocate responsibility for payment of tariffs and duties (for example, the Incoterms® rules);  
  • whether the clause is absolute or tied to specific conditions; and
  • whether it addresses refunds, rebates, or duty reductions.
• Change-in-law provisions, including:
  • whether tariffs qualify as a “change in law” under the agreement;
  • whether the clause is limited to cost increases or also applies to cost decreases; and
  • whether it provides for automatic adjustments or requires renegotiation.
• Price adjustment clauses, including:
  • whether adjustments are one-directional (upward only) or symmetrical (up and down);
  • whether there are caps, thresholds, or materiality requirements; and
  • whether notice, documentation, or timing requirements were satisfied when increases were implemented.
• Surcharge mechanisms, including whether tariff-related charges were:
  • separately itemized on invoices or embedded in overall pricing;
  • expressly tied to specific government actions (e.g., IEEPA tariffs or emergency tariffs); or
  • structured as temporary measures or open-ended adjustments.
• Force majeure or hardship provisions, including:
  • whether they were invoked (formally or informally) to justify tariff-related price increases;
  • whether their use was contractually appropriate; or
  • whether they trigger any obligations to renegotiate or unwind pricing.
• Course of dealing, course of performance, and commercial practice, including:
  • how tariff costs were actually communicated and implemented;
  • whether customers expressly agreed (or objected) to tariff-related increases; and
  • whether invoices, emails, or pricing notices characterized the charges as temporary or contingent.
• Gaps and ambiguities, including:
  • contracts that clearly allow tariff increases but are silent on tariff decreases;
  • inconsistent language across customer agreements; and
  • reliance on informal or non-contractual pricing adjustments.

Key takeaway: Many agreements allow companies to raise prices when tariffs increase but are silent on what happens when those tariffs are later invalidated. That asymmetry, combined with real-world pricing practices, might be the fault line for disputes over whether refunds must be passed through.

Step 4: Have You Preserved Your Refund Rights Against the Government?

The Supreme Court’s decision invalidating the IEEPA tariffs does not automatically result in refunds. Instead, it begins a new phase of litigation and administrative uncertainty in which procedural posture will matter enormously. Companies that fail to take the appropriate steps now risk losing refund rights altogether.

In particular, there remains significant uncertainty regarding whether refunds will be limited to parties that filed actions at the CIT, whether administrative remedies will be required, and how liquidation will affect recovery.

Against this backdrop, companies should consider the following steps:

• Adopt a protective litigation posture:
  • file a protective action at the CIT under 28 U.S.C. § 1581(i);
  • confirm that affiliated entities or related importers have filed separate actions where appropriate; and
  • engage outside counsel to monitor and participate in ongoing proceedings.
• Identify entries that are:
  • unliquidated;
  • liquidated but still protestable; or
  • final (absent judicial relief).
• Monitor whether liquidation has been or may be suspended (e.g., because of protests or other actions).
• Track administrative remedy deadlines for:
  • post-summary corrections (PSCs) (for unliquidated entries within the applicable window); and
  • protests (for liquidated entries within the statutory deadline).
• Prepare a strategy for when (or whether) to pursue administrative remedies in parallel with the filing of protective 1581(i) court actions.
• Documentation and evidence preservation:
  • preserving entry documentation, including CBP filings and broker records;
  • retaining duty payment records and supporting financial data; and
  • preserving internal communications and analyses related to tariff treatment.
• Align with broker and internal systems:
  • ensuring customs brokers are aligned with the company’s litigation and administrative strategy; and
  • confirming that internal systems can flag relevant entries and deadlines in real time.

Key takeaway: Refund rights will not be automatic. In a landscape where the CIT will be resolving fundamental questions about jurisdiction, remedies, and procedure, companies that fail to actively manage their procedural posture risk permanently forfeiting recovery opportunities.

Step 5: Are You Tracking New Import Duties and Adjusting?

While the IEEPA tariffs have been invalidated, the administration has already begun pivoting to alternative tariff authorities, including Section 122 measures, new and expanded Section 232 investigations, and potential Section 301 actions. As a result, companies must ensure they are not simultaneously pursuing refunds on past tariffs while quietly accumulating new tariff exposure on current imports.

This is not a static environment. Tariff measures are evolving rapidly, often with limited lead time, and are being accompanied by heightened enforcement scrutiny on classification, valuation, and country of origin. As tariffs move into a new environment with increased reliance on alternative remedies, including Sections 122, 232, and 301 duties, changes will be rapid. Companies accordingly should take the following steps to actively manage this transition:

• Implement real-time tariff monitoring:
  • track new tariff announcements, Federal Register notices, and HTS updates;
  • sign up for and track CSMS announcements of new tariff changes; and
  • monitor Chapter 99 changes and effective dates for new duties.
• Establish internal alerts or designate responsibility for ongoing monitoring.
• Revalidate classification and tariff applicability:
  • confirm that current HTS classifications remain accurate under new tariff regimes;
  • identify products that may now fall within the scope of Section 122, 232, or 301 measures; and
  • assess whether prior classification positions could be subject to challenge in a heightened enforcement environment.
• Reassess country-of-origin determinations:
  • validate origin analyses, particularly where supply chains involve high-risk jurisdictions;
  • evaluate exposure to transshipment or origin-evasion scrutiny, which is a current CBP enforcement priority; and
  • confirm that origin documentation is complete and defensible.
• Update landed cost and pricing models:
  • incorporate new duties into landed cost calculations and margin analyses;
  • ensure pricing teams are working with current duty rates and not relying on outdated assumptions; and
  • identify where new tariffs may erode margins or require immediate pricing adjustments.
• Coordinate with procurement and supply chain teams:
  • evaluate alternative sourcing strategies or production shifts in response to new tariffs;
  • assess feasibility of tariff mitigation strategies, such as supplier restructuring, product reconfiguration or tariff engineering; and
  • use of duty deferral programs (e.g., FTZs or bonded warehouses).
• Stress-test current import practices under enforcement conditions:
  • assume increased scrutiny from CBP and validate that import practices can withstand audit; and
  • review broker instructions and internal controls for consistency with current tariff programs.

Key takeaway: The end of the IEEPA tariffs does not signal a reduction in tariff risk — it marks a transition to a new and rapidly evolving tariff landscape. Companies that fail to actively monitor and adjust may find that new tariff risks will arise much more quickly than any anticipated refund recovery.

Step 6: Do You Have Contractual Flexibility to Deal with the Coming New Tariffs?

The IEEPA experience has exposed a critical issue for many companies: Contracts often address tariff increases, but not volatility, rapid legal reversals, or sustained periods of trade uncertainty. Many agreements were sufficient to support price increases when tariffs were imposed but are far less clear on how to respond when tariffs are reduced, invalidated, or replaced with new and different measures.

As the administration pivots to new tariff authorities, companies should treat this moment as an opportunity to stress-test and modernize their contractual frameworks. Companies should evaluate whether their current agreements provide sufficient flexibility to:

• Pass through new tariffs quickly and effectively, including through:
  • automatic price adjustment clauses tied to duty changes;
  • tariff surcharge mechanisms that can be implemented without renegotiation; and
  • provisions that minimize lag between tariff imposition and pricing adjustments.
• Adjust pricing downward where appropriate, including:
  • whether contracts permit or require downward price adjustments if tariffs are reduced or invalidated; and
  • whether prior increases must be reversed or credited if underlying assumptions change.
• Respond to material tariff shifts, including:
  • rights to renegotiate pricing or commercial terms in response to significant tariff changes; and
  • termination or exit rights where tariffs fundamentally alter the economics of the agreement.
• Allocate tariff risk clearly and consistently, including:
  • unambiguous provisions specifying which party bears the risk of new or changed duties;
  • alignment between contractual language and actual commercial practice; and
  • consistency across customer and supplier agreements to avoid mismatched risk allocation.
• Address timing and operational gaps, including:
  • how tariffs are handled when they take effect before pricing can be updated;
  • whether interim measures (e.g., provisional surcharges) are permitted; and
  • how quickly pricing adjustments must be implemented and documented.
• Ensure enforceability in practice, including:
  • whether notice, documentation, or approval requirements are workable in fast-moving tariff environments; and
  • whether internal teams can operationalize the contractual mechanisms as drafted.

In addition, companies should consider updating template agreements going forward to reflect lessons learned from the IEEPA tariff cycle:

• Include two-way tariff adjustment clauses, allowing for both upward and downward pricing changes.
• Require clear documentation and transparency around tariff-related charges, including identifying when charges are temporary or contingent.
• Build in shorter pricing reset intervals or periodic true-up mechanisms to account for rapidly changing duty rates.
• Incorporate standardized tariff definitions and triggers to reduce ambiguity (e.g., clearly defining what constitutes a “tariff event” or “change in law”).
• Align contractual provisions with internal pricing, finance, and compliance processes to ensure they can be implemented in real time.

Key takeaway: The companies best positioned for the next phase will be those that treat tariff risk as a core contractual and strategic issue, rather than an afterthought. In a world of rapidly shifting trade measures, contractual agility is becoming as important as supply chain flexibility.

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 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.