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

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 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 (found here).
• Part V: Avoiding Common Pitfalls.

Part V follows below.

Companies that act strategically may recover meaningful amounts and strengthen their position going forward. Those that do not may lose refund rights, forgo recovery opportunities, or create new compliance exposure.

To help companies navigate this landscape, this alert draws together key themes from across the series into a set of common pitfalls to avoid. These pitfalls fall into four broad categories: (1) Customs and refund strategy errors; (2) supplier and contractual recovery errors; (3) errors in pursuing recovery when not the importer of record (IOR); and (4) supply chain and operational strategy errors.

Customs & Refund Strategy Errors for Importers of Record

For companies that acted as importers of record, the most immediate risk is procedural: failing to take the steps necessary to preserve and secure refund rights. The Supreme Court’s decision does not automatically result in refunds, and the process will be shaped by ongoing litigation at the CIT and potential administrative actions.

Companies should be mindful of the following common pitfalls:

• Assuming refunds will be automatic
  • The Supreme Court invalidated the tariffs, but did not establish any refund mechanism or timeline
  • Refunds will likely require affirmative action and may be limited based on procedural posture
•  Failing to file protective actions under 28 USC § 1581(i)
  • Waiting for clarity on the refund process may result in loss of jurisdictional rights
  • Companies that do not file may be excluded if relief is ultimately limited to plaintiffs
• Not actively tracking liquidation and protest deadlines
  • Once entries liquidate, duties generally become final unless timely protested or covered by judicial relief
  • Failure to monitor liquidation status can result in permanent loss of recovery
•  Incomplete identification of affected entries
  • Companies often overlook entries due to decentralized brokers, multiple importer entities, or port-level fragmentation
  • Missing entries directly reduces recoverable amounts and weakens overall claims
• Relying solely on administrative remedies
  • Post-summary corrections (PSCs) and protests may not be sufficient depending on how the CIT addresses exhaustion and adequacy of remedies
  • Over-reliance on administrative paths may leave companies procedurally exposed
•  Inconsistent or unreliable data across systems
  • Discrepancies between ACE data, broker filings, and internal financial systems can delay or undermine claims
  • Lack of a centralized “single source of truth” creates risk in both litigation and administrative processes
• Overlooking audit and enforcement risk tied to refund claims
  • Large refund requests are likely to trigger scrutiny from CBP
  • Errors in classification, valuation, or origin may be surfaced during the refund process
• Continuing legacy classification or origin practices without revalidation
  • Enforcement remains heightened, particularly around country of origin and tariff applicability
  • Positions taken during the IEEPA period may be revisited under current enforcement priorities
• Failing to monitor developments at the CIT and CBP in real time
  • Key issues — including scope of relief, exhaustion requirements, and refund mechanics — are still being litigated
  • Companies that do not track developments risk missing required actions or deadlines
• Focusing on historical refunds while ignoring new tariff exposure
  • The administration has already pivoted to new tariff authorities (Sections 122, 232, and 301 of the Trade Act of 1974)
  • Companies may be simultaneously pursuing refunds while incurring new and potentially larger liabilities

Supplier & Contractual Recovery Errors for Importers of Record

Even where importers of record successfully obtain refunds from the government, a second — and often equally complex — set of issues arises: whether, and to what extent, those funds must be shared with customers or other downstream parties.

During 2025, many companies passed through IEEPA tariffs via price increases or surcharges, often relying on contractual provisions that were not designed to address tariff reversals. As a result, refund recovery may quickly give rise to contractual disputes, customer claims, and broader commercial considerations.

Companies should be mindful of the following common pitfalls:

• Assuming refunds can be retained without analysis
  • Receipt of a refund from CBP does not necessarily establish entitlement to retain those funds
  • Contractual obligations or commercial expectations may require partial or full pass-through
• Failing to review contract language before taking positions
  • Early communications with customers may inadvertently concede legal or commercial positions
  • Statements regarding entitlement or retention can be difficult to unwind
• Overlooking asymmetry in contract provisions
  • Many agreements address tariff increases but are silent on decreases or reversals
  • This asymmetry creates ambiguity — and risk — when determining refund obligations
• Ignoring how tariffs were implemented in practice
  • Course of dealing, invoices, and communications may shape how contractual provisions are interpreted
  • Surcharges described as “temporary” or tariff-specific may support customer claims
• Inconsistent treatment across customers or business units
  • Different approaches for similarly situated customers may create legal and reputational risk
  • Inconsistency can undermine defenses in negotiations or disputes
• Underestimating customer claims for reimbursement
  • Downstream purchasers may actively seek recovery, particularly where tariff costs were clearly identified
  • Claims may arise quickly once refunds become more visible
•  Lack of coordination across internal stakeholders
  • Misalignment between legal, sales, and finance teams can weaken the company’s position
  • Commercial teams may inadvertently make commitments that create exposure
• Failing to clearly document tariff pass-through
  • Weak or inconsistent documentation complicates both defense and negotiation
  • Lack of clarity around pricing adjustments increases dispute risk
• Overlooking contractual timing and notice requirements
  • Contracts may impose procedural requirements for price adjustments, claims, or credits
  • Failure to follow these requirements may affect rights and obligations
• Escalating disputes prematurely or unnecessarily
  • Immediate confrontation may damage relationships and reduce flexibility
  • Structured, strategic engagement often leads to better commercial and legal outcomes 

Errors in Seeking Recovery When Not the Importer of Record

For companies that did not serve as the IOR, pursuing recovery of IEEPA-related duties presents a more attenuated — and often more legally complex — path. Because refund rights generally run to the IOR, downstream parties must carefully evaluate their legal standing, contractual rights, and evidentiary posture before taking action. Missteps at this stage can result in wasted effort, weakened commercial leverage, or foreclosed recovery opportunities.

Companies should be mindful of the following common pitfalls:

• Assuming there is standing to pursue refunds directly
  • CBP refund rights typically run to the IOR, not downstream purchasers
  • Companies that were not the IOR may lack privity or statutory standing to seek refunds from the government
• Failing to identify the actual IOR
  • Many companies operate through distributors, related parties, or customs brokers, obscuring IOR status
  • Misidentifying the IOR can delay strategy and complicate recovery pathways
• Delaying engagement with the IOR
  • Waiting until refunds are imminent may reduce negotiating leverage
  • Early coordination is often necessary to preserve commercial and legal options
• Overlooking contractual recovery rights
  • Supply agreements, distribution contracts, or pricing provisions may allocate tariff risk
  • Failure to review contract language may result in missed reimbursement opportunities
• Relying on informal commercial understandings
  • Past practices or verbal assurances may not create enforceable recovery rights
  • Lack of written support weakens both negotiation and litigation posture
• Insufficient documentation of tariff pass-through
  • Companies must be able to demonstrate that tariff costs were actually borne
  • Weak invoice support or cost allocation records undermine recovery claims
• Ignoring potential alignment issues with the IOR
  • The IOR may have different incentives regarding refund pursuit
  • Lack of alignment can create delays, disputes, or incomplete recovery efforts
• Failing to structure cooperation agreements where appropriate
  • Downstream parties may need formal arrangements governing refund pursuit and allocation
  • Absence of clear agreements increases the risk of later disputes
• Overlooking statute of limitations and procedural posture
  • Recovery strategies may depend on whether the IOR preserved protest or litigation rights
  • Downstream parties that wait too long may find practical recovery pathways foreclosed
• Escalating prematurely without a coordinated strategy
  • Immediate legal demands may strain commercial relationships without improving recovery odds
  • A phased, evidence-driven approach often produces better commercial outcomes
• Treating recovery as purely legal rather than commercial
  • Many successful recoveries are achieved through structured commercial negotiations
  • Companies that ignore business dynamics may miss practical resolution opportunities

Supply Chain & Operational Strategy Errors

Companies should avoid treating the IEEPA decision as a one-time event. Instead, it represents a structural shift toward ongoing tariff volatility, with new measures already emerging under alternative authorities.

Companies that focus solely on recovering past tariffs — without adapting their supply chains and operating models — risk replacing prior exposure with new and potentially greater liabilities.

Against this backdrop, common pitfalls include:

• Treating the IEEPA decision as the end of tariff risk
  • New tariffs under Sections 122, 232, and 301 are already reshaping the landscape
  • Companies that assume a return to “normal” may be caught unprepared
• Failing to reassess supply chain concentration risk
  • Continued reliance on single-country or single-supplier sourcing increases vulnerability
  • Concentration risk is magnified in a volatile tariff environment
• Lack of viable alternative sourcing options
  • No qualified backup suppliers or production locations if tariffs shift
  • Limited optionality reduces negotiating leverage and operational flexibility
• Ignoring country-of-origin flexibility
  • Inability to adjust sourcing or production to achieve different origin outcomes
  • Lack of origin planning can lock in unfavorable tariff treatment
• Overlooking tariff engineering opportunities
  • Product design, component sourcing, or manufacturing decisions not aligned with tariff optimization
  • Missed opportunities to reduce duty exposure through legally supportable strategies
• Not integrating tariff considerations into procurement decisions
  • Sourcing decisions made without real-time input from trade compliance or legal teams
  • Disconnect between procurement strategy and tariff risk
• Failure to update landed cost and pricing models
  • Outdated duty assumptions can erode margins or distort pricing decisions
  • Finance and commercial teams may be operating on inaccurate cost structures
• Underutilizing duty mitigation programs
  • Missed opportunities to leverage foreign-trade zones (FTZs), bonded warehouses, or duty drawback
  • Existing programs may not be optimized for the current tariff environment
• Slow operational response to tariff changes
  • Inability to adjust sourcing, logistics, or pricing quickly in response to new measures
  • Delays can result in sustained exposure and margin compression
• Lack of cross-functional coordination
  • Disconnects between legal, trade compliance, procurement, supply chain, and finance teams
  • Fragmented decision-making increases both compliance risk and commercial inefficiency.

The Supreme Court’s IEEPA decision has created a rare moment in which past tariff exposure, current compliance obligations, and future supply chain strategy are all in flux at the same time. Companies that approach this m moment holistically — by preserving refund rights, managing contractual relationships, and strengthening supply chain resilience — will be best positioned to recover value and mitigate risk.

At the same time, the complexity of these issues — spanning customs procedure, contract law, supply chain strategy, and dispute risk — means that missteps can have significant consequences.

If you have questions about these developments, including strategies for securing refunds, managing supplier relationships, or adapting supply chains to evolving tariff regimes, the Foley International Trade & National Security and Supply Chain teams are ready to assist. Please feel free to 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.