Executive Summary
The legal basis for the Trump II administration’s signature tariff regime collapsed on February 20, 2026, but its practical effects largely did not. In Learning Resources,. v. Trump (consolidated with Trump v. V.O.S. Selections), the Supreme Court ruled 6–3 — with Chief Justice Roberts writing for a six-justice majority that included Sotomayor, Kagan, Gorsuch, Barrett, and Jackson — that the International Emergency Economic Powers Act of 1977 (50 U.S.C. §§ 1701– 1708) does not authorize tariffs. The ruling vacated the February 2025 “trafficking” tariffs, the April 2025 “Liberation Day” reciprocal tariffs, and the Brazil/India IEEPA tariffs as unlawful ab initio. Within hours, the administration terminated IEEPA collection effective February 24, 2026, invoked Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132) to impose a 10% global surcharge (raised to the 15% statutory cap on February 21), through USTR Jamieson Greer initiated sweeping new Section 301 investigations on March 11–12, 2026 covering excess capacity (16 economies) and forced labor (60 economies). Treasury Secretary Scott Bessent, speaking at the Economic Club of Dallas hours after the ruling, told the audience that “Treasury’s estimates show that the use of Section 122 authority, combined with potentially enhanced Section 232 and Section 301 tariffs will result in virtually unchanged tariff revenue in 2026.”
Independent of, but temporally aligned with, the IEEPA tariff regime, three agencies — FDA, CBP, and TTB — operationalized or accelerated regulatory infrastructure during 2025 that increased per-shipment friction on imported goods. FDA launched the ImportShield Program (FISP) on August 4, 2025, consolidating five regional entry-review teams into a single 24/7 centralized operation; reported by January 2026 a 66% increase in processing speed, 33% greater monthly capacity, and a roughly 20% reduction in staff hours (approximately 3,388 hours per month); and is on track for full deployment of the integrated SERIO+ entry-review platform in March 2026. CBP audit pace ran at a record clip — approximately 200 audits identifying $134 million in lapsed duties by April 2025 — while practitioner reports documented CBP increasingly bypassing the informational CF-28 stage and issuing revenue-protective CF-29 Notices of Action directly, alongside systematic first-sale valuation questionnaires covering 2023–2025 transactions. The Section 321 de minimis exemption was eliminated for China on May 2, 2025, suspended globally for commercial shipments on August 29, 2025, and is statutorily phased out by July 2027 under the One Big Beautiful Bill Act. TTB headcount fell roughly 13% (from approximately 520 to 450 employees) through 2025, with permit processing times stretching to 81 days against a 75-day standard before the October 1 to mid-November 2025 government shutdown roughly doubled the backlog.
Two prominent claims in the originating thesis required correction before this brief could be written responsibly. First, FSMA 204 (the food traceability rule under FDA Food Safety Modernization Act § 204) was not in operative force on a January 2026 deadline: FDA announced a 30-month extension in March 2025, published the proposed extension in the on August 7, 2025, and Congress codified the delay in the November 2025 Continuing Appropriations Act, pushing compliance to July 20, 2028. The friction it would have generated on small European suppliers, specialty food importers, and (by extension via Prior Notice obligations under 21 C.F.R. Part 1 Subpart I) alcoholic beverage importers therefore remains prospective, not realized, during the IEEPA window. Second, no FDA announcement of a Buffalo, NY port-of-entry hours change in May 2026 is verifiable in FDA, CBP,, or trade-press sources; this brief treats the claim as unsubstantiated.
Family and associates of senior administration officials were positioned to profit from the legal vulnerability of the IEEPA regime while the administration publicly defended it. Fitzgerald & Co. — whose holding company Fitzgerald, L.P. has been chaired by Brandon Lutnick (age 27, Stanford Symbolic Systems) since his father Howard Lutnick’s confirmation as Commerce Secretary on February 18, 2025 — circulated a marketing letter in July 2025 offering to buy importers’ rights to potential IEEPA tariff refunds at 20–30 cents on the dollar, with capacity for “several hundred million” and an internal claim of one ~$10 million IEEPA Rights trade already executed (Wired, July 21, 2025). has flatly and repeatedly denied executing any transactions, calling Wired‘s reporting “absolutely false.” Senators Ron Wyden (Senate Finance Ranking Member) and Elizabeth Warren (Senate Banking Ranking Member) opened a probe by letter to Brandon Lutnick United States Senate Committee onon
August 13, 2025; Representative Jamie Raskin (House Judiciary Ranking Member) followed in late February 2026 after the SCOTUS ruling, demanding documents on whether the trades represented “coincidence or something more orchestrated.” Bloomberg’s October 24, 2025 reporting confirmed that Jefferies, Oppenheimer, and Seaport Global also brokered IEEPA refund claims; trade sizes ranged from $2 million to over $100 million, and pricing rose from roughly 16–28 cents on the dollar pre-cert to 55–75 cents by April 2026 once CBP’s CAPE refund portal went live. Bessent told Fox News on February 20, 2026 that any payout would be “the ultimate corporate welfare” and to NBC after the State of the Union that “I have a feeling the American people won’t see it.”
The analytical question this brief addresses is not whether these strands were coordinated as a single conspiracy — the public record does not support that claim — but whether their convergence preserved the de facto tariff regime after the de jure regime fell, and whether the convergence was incidental. The conclusion below argues that the strongest reading of the evidence is structural convergence with intentional ratification: most of the infrastructure (CEEs, ACE, PREDICT, FSMA, FAA Act permitting, CBP audit authority) long predates Trump II and has its own bureaucratic logic, but the timing, sequencing, public framing, and refund- mechanism design in 2025–2026 indicate the administration recognized the alignment and chose to operationalize it. Where the public position contradicts the indicators — most sharply on refunds, where the administration stipulated to refund eligible importers in January 2026 while Bessent simultaneously framed refunds as illegitimate — the brief flags the contradiction without overstating it.
1. FDA ImportShield Program: centralization as a force multiplier
The FDA ImportShield Program (FISP) launched on August 4, 2025 and is verified in FDA’s own press materials and the agency’s “Entry Review” page. It was formerly designated the “Nationalized Entry Review Program” (NER) and consolidated five regional FDA entry-review teams into a single 24/7 centralized operation with what FDA describes as a “harmonized real-time alert system.” publicly characterized the program as a “powerful new layer of protection”;
Associate Commissioner for Inspections and Investigations Elizabeth Miller provided the operational quotation in FDA’s January 21, 2026 four-month review.
The metrics in that review — all FDA-reported and not independently audited — match the figures in the originating thesis: processing speed increased 66%, monthly volume capacity increased 33%, and staff hours fell approximately 20%, saving approximately 3,388 hours per month; admissibility decisions rose from 58 million lines in 2024 to 75 million lines in 2025. Implementation was staged rather than instantaneous. The structural predecessor was the October 2024 reorganization that dissolved the Office of Regulatory Affairs into the new Office of Inspections and Investigations (OII) and created the Human Foods Program — a Biden-era restructuring that significantly facilitated subsequent centralization. The March 27, 2025 HHS “Make America Healthy Again” workforce reduction cut roughly 3,500 FDA positions (about 19% of staff), with HHS publicly committing not to reduce drug, device, food reviewer, or inspector capacity. A broader April 2025 proposal to consolidate the agency into five shared-services offices was rejected by Commissioner Makary (“There will not be a reorganization”) after public pushback, including a “mindless approach” critique by former CDER Director Janet Woodcock; only IT, travel, and administrative consolidation proceeded. FISP launched in this context as the trade-facing piece of the surviving consolidation agenda.
The SERIO+ platform — the integrated successor to the legacy OASIS system and the in-the-field SERIO mobile platform developed beginning FY2017 by contractor REI Systems — is scheduled for full implementation in March 2026 consolidates entry-review tools that previously sat alongside the PREDICT (Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting) risk-scoring engine. PREDICT, piloted in Los Angeles in September 2009 and nationally deployed by 2012, remains in use; SERIO+ does not replace it but integrates the entry-review interface around it. The cumulative effect is that FDA can process more entries with fewer hours, but it can also direct those hours more selectively at flagged shipments. This is the operational signature the originating thesis identifies: fewer routine resources, more targeted friction, applied at scale.
The claim of a May 2026 Buffalo, NY port-hours change could not be verified in FDA.gov, CBP.gov,, Buffalo-area news, or customs broker advisories (Willson International, Livingston, Buckland). Historical FDA hours at the Lewiston/Queenston (Peace Bridge) office ran Monday–Thursday 8:00 a.m.–11:00 p.m., with reduced Friday and Sunday hours; the CBP Buffalo Field Office page was updated May 4, 2026, but only for USMCA waiver processing. A reasonable analyst should treat the Buffalo claim as unsubstantiated until primary documentation surfaces. The thesis it supports — that hour reductions at secondary ports disproportionately affect European-routed and specialty shipments that often clear through such ports — remains structurally plausible but is not, on this point, documented.
2. FSMA 204: the deferred-friction case
The Food Traceability Rule under FSMA § 204 (Public Law 111-353, signed January 4, 2011) was finalized at 87 Fed. Reg. 70910 (November 2022), effective January 20, 2023, with original compliance set for January 20, 2026. The rule requires entities at any Critical Tracking Event (CTE) — harvesting, cooling, packing, transformation, shipping, receiving — for any food on the Food Traceability List to maintain Key Data Elements (KDEs) and produce them in electronic, sortable form within 24 hours of FDA request. It applies to foreign suppliers exporting FTL foods to the U.S. without recognition of equivalent regimes (Canada’s SFCR is explicitly not equivalent).
It is not currently in operative effect. FDA announced intent to delay the rule by 30 months on March 20, 2025, published the proposed extension at 90 Fed. Reg. 38047 on August 7, 2025, and Congress codified the deferral in the November 2025 Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act of 2026, directing FDA not to enforce before July 20, 2028. The substantive rule is unchanged.
The thesis that FSMA 204 created realized friction on European specialty importers during 2025–2026 therefore overstates the position. Three distinctions matter, however. First, the Prior Notice obligation for imported food under 21 C.F.R. Part 1 Subpart I (originating in the Bioterrorism Act of 2002) was not deferred and remained in force throughout; alcoholic beverages are “food” under the FD&C Act, so each product code, size, and supplier still required separate Prior Notice via PNSI, at 90 Fed. Reg. 46055 on September 25, 2025. Second, the anticipation of FSMA 204 compliance materially shaped 2025 capital and supplier- relationship decisions among importers (industry coverage in and documents extensive readiness spending). Third, the deferral itself can be read as administration prioritization rather than relief: FDA chose to redirect implementation capacity. The cleanest analytic statement is that FSMA 204 is loaded friction, not yet detonated — and that its eventual detonation in July 2028 will fall on the same import classes already most exposed to the 2025 enforcement intensification.
3. CBP: where the friction is unambiguously real
The CBP record is the strongest empirical support for the originating thesis. Five lines of evidence converge.
Audit pace. In March 2025 alone, CBP completed 71 audits identifying $310 million in lapsed duties (with an additional $49 million tied to prior fiscal years); by April 2025, approximately 200 audits had identified $134 million — already a record pace against FY2024 totals of 417 audits and $117.67 million. administration was running roughly an annual prior-year audit volume per month. The CF-28-to-CF-29 shift. Practitioner reporting — most clearly, corroborated by Livingston,, and — documents CBP increasingly bypassing the CF-28 Request for Information (the informational stage) and going directly to CF-29 Notice of Action under 19 C.F.R. § 152.2 wherever projected duty increase exceeds the $15 threshold (a threshold trivially met in the stacked-tariff environment). One OFW office reported receiving six CF-29s across four clients in a single week. The CF-29 is being used as an affirmative revenue-protection instrument rather than as a follow-up to inadequate CF-28 responses. The Base Metals Center of Excellence issued internal guidance that “non-steel content” for Section 232 derivatives excludes fabrication, machining, labor, and manufacturer profit — meaning derivatives must be declared at full loaded cost.
First-sale and related-party valuation. CBP launched a systematic questionnaire campaign asking importers to document first-sale use across 2023–2025, with ruling letters H316892, H323585, and H327067 rejecting first-sale where the middleman did not take title or risk of loss — the narrowest enforcement posture in years (Mohawk Global;). Sandler Travis flagged that CBP requests now include charts of accounts and general-ledger detail, well beyond historic norms. The Last Sale Valuation Act introduced in February 2025 by Senators Whitehouse (D) and Cassidy (R) would eliminate first-sale by statute; KPMG modeled the apparel and footwear (HTSUS Chapters 61–64) impact as most acute. For collectibles, art, and spirits — categories with auction premiums, private-sale arrangements, and related-party structures — CBP analytics now systematically flag valuation anomalies for high-value shipments.
Country-of-origin and transshipment enforcement. On December 18, 2025, DOJ announced two large qui tam settlements: Ceratizit USA at $54.4 million for tungsten carbide transshipped China-to-Taiwan to evade Section 301 (whistleblower share $9.75 million) and MGI International at $6.8 million for Chinese goods declared as Taiwan, Saudi Arabia, or U.S. origin, with MGI’s former COO criminally charged. 28s have focused increasingly on Southeast Asia transshipment routes (Malaysia, Vietnam, Thailand), and Enforce and Protect Act (EAPA) evasion cases rose.
Section 321 de minimis. The April 2, 2025 executive order eliminated de minimis for China and Hong Kong effective May 2, 2025, with postal shipments at 120% ad valorem or $100/item (rising to $200/item June 1); the May 12, 2025 modification reset postal to 54%. The August 29, 2025 suspension extended de minimis elimination to all commercial shipments worldwide, and the One Big Beautiful Bill Act signed July 4, 2025 phases de minimis out entirely by July 2027. In FY2024 CBP processed roughly 1.3 billion de minimis shipments — 92% of cargo entries — so this is the single largest structural friction increase in modern import history, framed publicly as anti-fentanyl (CBP seized 21,000 lbs of fentanyl in FY2024) but functionally a generalized choke point.
A contradictory signal on UFLPA deserves flagging. CBP publicly claims FY2025 forced-labor enforcement up 89% (1,867 detentions/month average; 22,398 shipments in FY2025 vs. 11,816 in FY2024). But a December 15, 2025 letter from Representatives Rosa DeLauro and Raja Krishnamoorthi documented the opposite from CBP’s own dashboard data: detention pace fell from approximately 1,062/month (November 2024–March 2025) to approximately 224/month (April–August 2025) — a fourfold reduction coinciding precisely with the IEEPA tariff implementation window. The letter notes no new UFLPA Entity List additions since January 15, 2025. The discrepancy is partly methodological (CBP began counting each HTS-4 line as a shipment, inflating recent figures) but partly resource allocation: enforcement personnel appear to have been redirected to tariff implementation. The IEEPA tariff regime, while operational, displaced UFLPA enforcement; the regulatory friction infrastructure replaced it.
Trade-side staffing at CBP saw no comparable hiring surge to the immigration enforcement build-out (CBP retention bonuses up to $60,000 funded by OBBBA, retired Border Patrol/CBPO reemployment initiative announced November 2025). The Centers of Excellence and Expertise — finalized at 88 Fed. Reg. 68894 effective November 6, 2023, formally transitioning post-release trade functions from port directors to ten Center directors — provided the centralized administrative substrate that made selective enforcement intensification operationally feasible without additional headcount.
4. TTB: friction by neglect rather than design
The TTB record reads differently from the CBP record. Headcount fell from approximately 520 employees in early 2024 to approximately 450 in April 2025 — a roughly 13% reduction through two rounds of voluntary resignations under the administration’s workforce policy — even though TTB’s FY2025 budget request had sought a $5.199 million increase and 30 additional FTE to restore staffing. Pre-shutdown Distilled Spirits Plant permit approvals ran at 81 days against TTB’s 75-day customer-service standard. October 1 to mid-November 2025 government shutdown furloughed 398 of 459 TTB employees (over 85%), with TTB’s official message to industry stating that “permit, formula, and label submissions received during the funding lapse roughly doubled our existing backlog.” Alcohol and Tobacco Tax and TradeFor craft distillers, the
October–December window represents 30–40% of annual sales; case examples include Paquera Mezcal (Los Angeles) projecting a 30% short-term revenue drop and Song Dog Farm Distillery (Maryland) unable to launch holiday products requiring both label and formula approval.
Importer-side mechanics under the Federal Alcohol Administration Act of 1935 (27 U.S.C. §§ 201–212) remained in force: importers require a TTB Federal Basic Permit under § 117 before importing, and a Certificate of Label Approval (COLA) before entry under § 205(e) for distilled spirits, wines at or above 7% ABV, and malt beverages. CBP collects federal excise tax at entry; TTB processes CBMA (Craft Beverage Modernization Act) reduced-rate refund claims, with that authority having been transferred from CBP to TTB on January 1, 2023. The September 22, 2025 notice made permanent the temporary CBMA import regulations. Effective September 30, 2025, TTB ceased issuing paper checks under EO 14247 — failure to provide banking information delays refunds. TTB’s IT migration from Permits Online (vendor support ending December 2025) to myTTB compounded the friction.
The analytic distinction is important. CBP friction in 2025–2026 looks affirmative — audit pace, CF-29 issuance, first-sale challenges, transshipment enforcement. TTB friction looks like attrition — staff cuts, shutdown effects, queue lengthening. The aggregate effect on small specialty importers, particularly imported spirits and wine, is similar regardless of mechanism: longer time-to-shelf, higher compliance cost, more capital tied up in pending entries. There is no documented evidence of TTB enforcement intensification during the window comparable to CBP’s audit and valuation posture.
5. The Cantor Fitzgerald tariff refund market
Fitzgerald tariff refund market The factual record on Fitzgerald and the Lutnick family is unusually well- documented for an unresolved matter. Howard Lutnick was confirmed as the 41st Secretary of Commerce on February 18, 2025 by a 51–45 party-line vote and resigned from Fitzgerald upon confirmation. Lutnick, 27, became Chairman of Fitzgerald, L.P. effective February 2025; his brother Kyle became Executive Vice Chairman; the operating investment bank Fitzgerald & Co. is run by Co-CEOs Pascal Bandelier, Sage Kelly, and Christian Wall. Per Howard Lutnick’s Office of Government Ethics filing, he transferred his ownership stake to trusts for his adult children — controlled by Brandon — effective approximately May 16, 2025, agreeing to forgo all economic benefits in, BGC, and Newmark.
The originating reporting is, July 21, 2025, “Trump’s Commerce Secretary Loves Tariffs. His Former Investment Bank Is Taking Bets Against Them.” viewed an internal letter offering to purchase importers’ rights to potential IEEPA tariff refunds at 20–30 cents on the dollar, with a stated representative quotation: “for a company that paid $10 million, they could expect to receive $2-$3 million in a trade. We have the capacity to trade up to several hundred million of these presently and can likely upsize that in the future to meet potential demand.”
The letter also asserted that had “already put a trade through representing about ~$10 million of IEEPA Rights.” has denied executing any trades, repeatedly and consistently. Spokesperson Erica Chase told: “Cantor is not in the business of positioning any risk or taking views in litigation claims including tariffs.” She told: “We have not facilitated or executed any trades in that market… What is being reported about our business is absolutely false.” Post-SCOTUS, a spokesperson told and: “Cantor Fitzgerald has never executed any transactions or taken any position on tariffs refund claims. In July 2025, certain salespeople explored brokering tariff trades, but never executed any transactions.” A February 2026 report stated the firm “had considered the product but decided against it.”
This contradiction is unresolved on the public record. says it reviewed documents asserting a trade was put through; says no trade was executed. No independent secondary source has confirmed executions; conversely, no documentary or testimonial source has surfaced refuting the marketing letter viewed.
Other firms unambiguously made the market. reported on October 24, 2025 that Jefferies Financial Group and Oppenheimer & Co. were brokers and market-makers; trade sizes ranged from $2 million to $20 million, with several over $100 million. Seaport Global (Wes Harrell, head of trading) and Alba Wheels Up International (founder Salvatore J. Stile II, a customs brokerage) were active; reported Alba brokered an $18 million claim sale. Hedge funds and distressed-debt specialists were the typical buyers. Pricing rose from 16–28 cents on the dollar before SCOTUS cert (granted September 9, 2025) to 40–50 cents post-cert, to 55–75 cents by early April 2026 after CBP’s CAPE refund portal launched.
The Wyden–Warren probe of August 13, 2025 was a joint letter from Senators Ron Wyden (Ranking Member, Senate Finance) and Elizabeth Warren (Ranking Member, Senate Banking) to Brandon Lutnick. United States Senate Committee onItFinance quoted Wired‘s reporting, cited Executive Order 14289 (the April 29, 2025 tariff-stacking clarification), United States Senate Committee onand asked detailed questions about the number of Tariff Refund Agreements drafted and finalized, counterparties, and any communications between and Executive Branch officials including Secretary Lutnick about tariffs, refunds, or IEEPA.
(Ranking Member, House Judiciary) followed in late February 2026, demanding documents by 5:00 p.m. March 9, 2026, and asking whether “the Lutnick family’s cornering of the market in this doomed endeavor [was] a mere coincidence or something more orchestrated.”
Professor Timothy Meyer of School, co-director of Duke’s Center for International and Comparative Law and a leading scholarly voice on the IEEPA tariff question, told: “The fact that it’s Fitzgerald, that raises some questions. It’s quite interesting that the commerce secretary’s firm is the one that is betting the tariffs will be struck down. That strikes me as very interesting — and quite telling about what those with connections to the administration think about the merits of the tariffs.” Meyer had publicly argued from early 2025 that IEEPA “just does not contain the kind of clear authorization from Congress that you would expect to see” — anticipating the Major Questions Doctrine argument the Federal Circuit and SCOTUS would adopt.
On the specific question of whether had non-public information about administration assessments of IEEPA legal vulnerability: no leaked OLC memo, internal Treasury or Commerce analysis, or congressional testimony has surfaced demonstrating it. Public legal vulnerability was, however, extensive: multiple suits filed early 2025; CIT three-judge panel ruled against the tariffs May 28, 2025 (one week before Wired‘s reporting of the pitch went to press); Federal Circuit administrative stay May 29, 2025; ordered en banc hearing June 10, 2025; en banc 7–4 ruling against the government August 29, 2025. Cantor’s pitch was timed to a legal vulnerability already visible to any sophisticated tariff lawyer. The conflict-of- interest question is therefore less about insider knowledge of merits and more about whether the Commerce Secretary’s family firm should have been the conduit for a market positioned against the administration’s own legal position. That structural question is what Wyden, Warren, Raskin, and Meyer have raised.
6. The IEEPA litigation arc
The litigation moved with unusual speed for a constitutional case of this magnitude. V.O.S. Selections,. — a small New York wine and spirits importer founded by Victor Owen Schwartz — filed in the Court of International Trade as Case No. 1:25-cv-00066 on April 14, 2025, represented by (joined by Michael McConnell, Neal Katyal, and Professor Ilya Somin). Co-plaintiffs included Plastic Services and Products LLC (Genova Pipe), MicroKits LLC, FishUSA., and Terry Precision Cycling LLC.
Twelve states led by Oregon AG Dan Rayfield filed a parallel suit (CIT 1:25-cv-00077) on April 23. Learning Resources,. and Hand2mind filed in D.D.C. on April 22, 2025.
The three-judge CIT panel (Katzmann, Reif, Restani) ruled unanimously on May 28, 2025 — V.O.S. Selections,. v. United States, 772 F. Supp. 3d 1350 (Ct. Int’l Trade 2025) — granting summary judgment for plaintiffs and issuing a permanent universal injunction. The court held that CIT had exclusive jurisdiction under 28 U.S.C. § 1581(i) because the executive orders modified the HTSUS, that the trafficking tariffs exceeded IEEPA authority for lack of rational connection between unbounded tariffs and the declared emergencies, and that the reciprocal tariffs were precluded by Section 122 of the Trade Act of 1974 as the exclusive balance-of- payments authority. Judge Rudolph Contreras issued a narrower preliminary injunction in Learning Resources on May 29.
The Federal Circuit en banc (11 judges) heard argument July 31, 2025 and ruled 7–4 on August 29, 2025 — V.O.S. Selections,. v. Trump, 149 F.4th 1312 (Fed. Cir. 2025) Supreme Court of the United States— per curiam, joined by Judges Lourie, Dyk, Reyna, Hughes, Stoll, Cunningham, and Stark; dissent by Judge Taranto joined by Chief Judge Moore and Judges Prost and Chen. The majority applied the Major Questions Doctrine: IEEPA’s authority to “regulate … importation” does not authorize tariffs “unbounded in scope, amount, and duration.” The CIT’s universal injunction was vacated in light of Trump v. CASA,., 145 S. Ct. 2540 (2025), and remanded for narrower equitable relief.
The Supreme Court granted cert September 9, 2025, consolidated with Learning Resources, heard argument November 5, 2025 (Solicitor General D. John Sauer for the government; Neal Katyal, Pratik Shah, and Benjamin Gutman for challengers), and ruled 6–3 on February 20, 2026 — Learning Resources,. v. Trump, 607 U.S. ___ (2026), Nos. 24-1287 & 25-250.
The legal theory that prevailed was ordinary statutory interpretation, not Major Questions Doctrine. Chief Justice Roberts wrote for a six-justice majority (Sotomayor, Kagan, Gorsuch, Barrett, Jackson joining the core holding) that IEEPA does not authorize tariffs. The reasoning: “regulate” does not ordinarily mean “tax”; IEEPA uses neither “tariff,” “duty,” nor “tax”;
Congress delegates tariff authority explicitly and with limits in Sections 232, 301, and 122; no president had read IEEPA as a tariff authority in 48 years; and interpreting “regulate” to include tax would render IEEPA partly unconstitutional under the Export Clause. Only a three-justice plurality (Roberts, Gorsuch, Barrett) added the Major Questions Doctrine as a separate ground. Kagan, joined by Sotomayor and Jackson, concurred in the judgment but rejected the MQD framing. Thomas dissented separately on broad delegation grounds; Justice Kavanaugh, joined by Thomas and Alito, dissented statutory question and on MQD applicability in foreign affairs and national security. The Court did not reach standing, the reviewability of the emergency declaration, or nondelegation.
The judgment in V.O.S. Selections affirmed the Federal Circuit; in Learning Resources the Court vacated the D.D.C. judgment with instructions to dismiss for lack of jurisdiction (CIT exclusive). All IEEPA tariffs — trafficking, reciprocal, Brazil, India — were unlawful ab initio. The Court did not order refunds; that question remained for remand and for the CIT to develop, which it did rapidly through the Atmus Filtration,. v. United States orders of March 4, 20, and 27, 2026 directing CBP to liquidate and reliquidate entries without IEEPA duties, and to extend the order to finally liquidated entries.
7. The pivot: substituting authorities while slow-walking refunds
The administration’s response was prepared and immediate. Treasury Secretary Bessent’s Economic Club of Dallas address on February 20, 2026, titled “Economic Security First,” opened with: “I did not change a single word in my speech via post the ruling.” He continued: “Six justices simply ruled that IEEPA authorities cannot be used to raise even $1 of revenue. This administration will invoke alternative legal authorities to replace the IEEPA tariffs. Treasury’s estimates show that the use of Section 122 authority, combined with potentially enhanced Section 232 and Section 301 tariffs will result in virtually unchanged tariff revenue in 2026.” with Ray Washburne on refunds: “I have a feeling the American people won’t see it.” On Fox News the same day: “If there is a payout, it’s just going to be the ultimate corporate welfare.” To Kristen Welker on NBC after the State of the Union: “I’m not going to get out ahead of the court… I think all these corporations should come out and tell everyone how they are going to get the money back to the consumers if they, in fact, passed those costs along.” He specifically named FedEx CEO Raj Subramaniam after FedEx filed for refunds February 24, 2026.
The legal pivot proceeded on four authorities. Trump invoked Section 122 of the Trade Act of 1974 by proclamation February 20, 2026, imposing a 10% universal surcharge effective February 24, 2026 for 150 days, raised to the 15% statutory cap on February 21. Exemptions cover USMCA- qualifying Canada/Mexico goods, goods already subject to Section 232 tariffs, critical minerals, pharmaceuticals, certain electronics, and country-specific deal exemptions. Section 232 (Trade Expansion Act of 1962, 19 U.S.C. § 1862) tariffs on steel, aluminum, copper, autos, semiconductors, trucks, and timber were maintained, with pharmaceuticals tariffs scheduled effective July 31 and September 29, 2026 and pending investigations on critical minerals, drones, medical equipment, wind turbines, robotics, and polysilicon. Section 301 (Trade Act of 1974) China IP tariffs from 2018 remained, with new investigations launched March 11, 2026 (excess capacity, 16 economies: China, EU, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, India) and March 12, 2026 (forced labor, 60 economies). USTR Greer publicly stated he intends to conclude these with proposed remedies before the Section 122 tariffs expire July 24, 2026. Section 338 (Tariff Act of 1930) — which would authorize up to 50% tariffs or embargoes against discriminatory countries with minimal procedural requirements — has not been invoked as of this writing, though it is held in reserve. Greer’s official statement framed Section 232 and 301 as having “withstood more than 4,000 lawsuits since the first Trump term.”
Twenty-four state attorneys general filed a CIT challenge to the Section 122 surcharge on March 5, 2026. Norton Rose Fulbright’s May 2026 update references a CIT three-judge panel decision declaring the Section 122 universal 10% tariffs unlawful; the date and full text of that decision were not independently verified within research scope and should be confirmed before reliance.
On refunds, the administration’s posture is the analytical fulcrum of this brief. The January 8, 2026 stipulation committed to refunding IEEPA tariffs for similarly situated plaintiffs upon final unappealable order. After SCOTUS, CBP filed a sworn declaration by Brandon Lord (Executive Director, Trade Programs Directorate) on March 5–6, 2026 stating immediate compliance was “impossible” — existing technology insufficient, $166 billion collected across 53 million entries from 330,000+ importers — and that “Personnel would be redirected from responsibilities that serve to mitigate imminent threats to national security.” Judge Eaton suspended his order March 6 to permit CAPE development. CAPE Phase 1 launched April 20, 2026; by April 28, 2026, CBP reported 75,300 declarations covering 11.2 million entries filed, but only 1.74 million (about 3%) had cleared all validations, with a roughly 15% rejection rate. Refunds are expected within 60–90 days following acceptance. Phase 2, covering antidumping/countervailing entries and suspended/extended liquidation entries, has no scheduled date. Phase 1 excludes reconciliation entries (type 09), drawback entries (type 47),
USMCA duty deferral (type 08), TIB entries (type 23), and manually filed entries.
The administration’s narrow legal position — articulated by and analysts — is that refunds should be available “only to parties that have filed lawsuits at the CIT,” forcing roughly 2,500 importers to file individual protective suits to preserve rights. This is the architecture of slow-walking: the technical limitation citation is genuine, but the legal-position narrowness and the public framing as “corporate welfare” amplify the technical friction into a strategic stance. Bessent’s projection of $130–134 billion in refund exposure (against Penn Wharton’s $175–179 billion and CBP’s filed $166 billion) suggests Treasury intends to dispute a material portion of claims. Penn Wharton modeled cumulative IEEPA collections at approximately $164.7 billion through January 2026. The Tariff Refund Act of 2026 (S. 3905) would mandate 180- day refunds with interest; its prospects in the current Congress are uncertain.
8. Intentionality and convergence
This is the question the brief is constructed to address: were FISP, CBP enforcement intensification, TTB friction, refund slow-walking, and the family-positioned refund market a coordinated design, or independent currents that happened to align?
The evidence does not support a single-conspiracy reading. The structural antecedents are real and predate the administration. The Centers of Excellence and Expertise were finalized November 6, 2023 under Biden. ACE modernization completed February 22, 2025 U.S. Customs and Border Protectionafter years of work begun under Biden and Trump I. FDA’s 2024 reorganization into the OII predated FISP by ten months. PREDICT has been in nationwide use since 2012.
The Federal Alcohol Administration Act has structured importer permitting since 1935. FSMA originated in 2011. IEEPA was enacted in 1977. None of this is novel infrastructure.
The evidence does support intentional ratification and acceleration. Five sequencing observations are difficult to attribute entirely to bureaucratic momentum:
First, FISP launched five days before the report on Cantor’s refund pitch and one month before the Federal Circuit en banc oral argument. The administration was building post-tariff import friction infrastructure at the exact moment its tariff regime entered its most vulnerable legal phase.
Second, the One Big Beautiful Bill Act’s July 2027 statutory phase-out of de minimis preserves the friction even if every tariff authority falls. The Section 321 closure operates on a different statutory plane than IEEPA, Section 232, Section 301, or Section 122; its survival depends on no court ruling.
Third, the FSMA 204 deferral is internally consistent with the FISP build-out: it concentrated FDA implementation capacity on the centralized entry-review system that operates immediately rather than on the traceability rule that would have operated retroactively across the supply chain. The administration chose where to put friction.
Fourth, CBP’s resource reallocation away from UFLPA toward IEEPA implementation during April–August 2025 documented in the DeLauro– Krishnamoorthi letter is a clear administrative choice. When the IEEPA window closed, those resources became available for the post-IEEPA enforcement intensification (audits, CF-29s, first-sale challenges, transshipment cases) that are now the substrate of the post-tariff friction regime.
Fifth, Bessent’s “corporate welfare” framing was deployed within hours of the SCOTUS ruling, on the same day as a previously scheduled speech he had explicitly not revised post-ruling — suggesting the framing had been prepared in anticipation. The refund-narrowness legal position was filed before the technical CAPE limitations were operationally tested; the operational limitations then provided cover for the legal position.
On the question specifically, the appropriate analytic statement is structural rather than causal. No documented evidence demonstrates used non-public administration information. The legal vulnerability of IEEPA tariffs was visible to any competent trade lawyer by Q2 2025; multiple plaintiffs had filed; the CIT had ruled by May 28, 2025. The marketing of refund claims at 20–30 cents on the dollar is consistent with a sophisticated reading of pure public information. What is structurally remarkable — and what Wyden, Warren, Raskin, and Meyer have raised — is that the family-controlled firm of the Commerce Secretary, who publicly championed the tariff regime and reportedly fought Bessent’s and NEC Chair Kevin Hassett’s efforts to limit it, was simultaneously the conduit for a market betting against that regime’s legal survival. That structural conflict does not require coordination to be politically and ethically significant; it requires only the absence of effective separation. Whether actually executed trades, as says documents indicated and denies, matters for the magnitude of the conflict but not for its existence.
The cleanest analytic frame: structural convergence with intentional ratification. Independent bureaucratic logics produced infrastructure that aligned with administration interests; the administration recognized the alignment, accelerated the elements it controlled, and deployed public framing that ratified the alignment as policy. This is neither conspiracy nor coincidence. It is the ordinary operation of an executive branch that has identified what de facto policy it wants to preserve and has the institutional reach to preserve it through alternative means when the original de jure vehicle fails.
9. Who bears the cost
The political economy of the friction regime is empirically legible. The five plaintiff categories in V.O.S. Selections are representative: a small wine importer, a plastic pipe maker, an electronic kit maker, a fishing tackle company, and a precision cycling apparel firm. Documented bankruptcies and freezes in 2025 cluster heavily in specialty importing: Oracles Craft Brands (Florida, Italian/Greek/Portuguese wines) filed Chapter 11 May 12, 2025; multiple craft distilleries filed in 2025 including Westward Whiskey, Boston Harbor Distillery, Devils River, JJ Pfister, Lee Spirits, Garrard County, with A.M. Scott Distillery filing December 22, 2025; Jenny & François Selections froze shipments at the 200% threat (“Two hundred percent would have put me out of business” — Jenny Lefcourt).
The aggregate damage is quantifiable in several dimensions. The U.S. Wine Trade Alliance documented that every $1 sent to the EU for wine generates roughly $4.52 in U.S. business revenue (importers, distributors, retailers, restaurants).
NBER pass-through analysis of the 2019 European wine tariff found foreign producers absorbed only about 20% of tariff cost; the remaining 80% passed through, with import prices adjusting within three months and retail prices over twelve months. DISCUS reported U.S. spirits exports to Canada fell 85% in Q2 2025, to the EU 12%, to the UK 29%, to Japan 23%. France’s FEVS projected an €800 million decline in wine exports; the Italian projection was €6+ billion per year and 15,000+ jobs. USWTA reported in January 2026 that “since early 2025, major US distributors and importers have collectively laid off many thousands of American workers.”
The structural distribution is consistent with the political economy thesis the originating brief flags. Costs concentrate on small importers without compliance infrastructure, specialty importers (wine, spirits, art, collectibles, specialty foods) whose margins depend on differentiation rather than scale, European-routed goods (because Section 122, 232, and 301 reach where IEEPA reached), individual collectors lacking customs broker relationships, and craft producers dependent on imported inputs. Benefits accrue to domestic substitutes, large established importers with internal compliance teams who can absorb CF-29 cycles and first-sale documentation requests, and — in the refund context — financial intermediaries (Cantor, Jefferies, Oppenheimer, Seaport, distressed-debt funds) who can buy claims at a discount from importers who cannot wait for CAPE Phase 2.
In Proudhonian terms, the friction regime operates as a tax on possession (the small importer holding inventory) imposed by institutional property (the centralized regulatory apparatus). The de minimis closure is the clearest expression: it eliminates the historical legal accommodation by which small-scale movement of goods escaped the friction designed for industrial trade. The de facto effect is that goods movement at scale below the institutional threshold becomes either impossible or available only through intermediaries who themselves operate at scale. The compliance infrastructure is the property; the importer’s claim on the goods is the possession; the friction is the rent the latter pays to the former for continued operation.
10. Conclusion: the de jure / de facto gap
The central institutional finding of this brief is that the United States in 2026 has substantially preserved the practical effects of the 2025 IEEPA tariff regime without its legal authority. Tariff revenue, by Treasury’s own projection, will be “virtually unchanged” in 2026. Import friction, measured by audit pace, CF-29 issuance, first-sale challenges, transshipment enforcement, FDA entry-review centralization, de minimis closure, and TTB queue lengthening, is at or above the IEEPA-era peak. Refund payment, despite a court order and a stipulation, is slow-walked through technical capacity constraints layered onto a narrow legal interpretation and a public framing that treats refundees as undeserving.
The administration’s public position — that the rule of law is being respected, refunds are being implemented, and replacement authorities are legitimate — is not falsified by any of these findings. What the findings document is a gap between de jure and de facto outcome that is wider than ordinary administrative latitude can explain on its own. That gap was closed, in part, by infrastructure built or accelerated during 2025; in part by statutes Congress chose not to amend (Section 122, 232, 301, FAA Act, FSMA, the OBBBA de minimis phase-out); and in part by public framing that treated the SCOTUS ruling as a technicality to be routed around rather than a constitutional limit to be respected.
On the question of family enrichment: the public record demonstrates a structural conflict, not a documented coordination. The Commerce Secretary’s family firm marketed a financial product positioned against the legal survival of the administration’s own tariff regime, at terms (20–30 cents on the dollar) consistent with sophisticated reading of public legal vulnerability that was already extensive. Whether trades were executed remains contested. Whether the conflict was disclosed, mitigated, or otherwise managed through OGE-compliant separation is partly answered by Howard Lutnick’s May 2025 trust transfer and partly an open question that the Wyden–Warren and Raskin probes have not yet definitively resolved. The other firms in the market — Jefferies, Oppenheimer, Seaport — make clear that the trade idea was not unique to, but the political identity of the broker was unique to.
For an institutional analyst, the lesson is that the durable variable in modern American tariff policy is not the headline tariff rate but the regulatory infrastructure that surrounds it. A tariff regime that loses its statutory base falls in a year; a regulatory infrastructure built around it persists across administrations and legal regimes. The 2025–2026 episode is a case study in how an administration that lost the headline policy preserved the policy’s effect by ensuring that the bureaucratic substrate was already in place to operate without it.
11. Watch items
The following warrant continued monitoring through the second half of 2026 and into 2027:
Refund completion and CAPE Phase 2 timing. Phase 1 covered approximately 3% of claimed entries through validation by late April 2026; Phase 2 has no scheduled date and excludes the most legally complex entry types. Watch for the volume of actually paid refunds (distinct from accepted CAPE declarations), the disposition of the roughly 2,500 protective CIT suits, and any further Eaton orders. The administration’s appeal posture through early June 2026 deadlines may extend friction further.
Section 122 litigation. The 24-state CIT challenge filed March 5, 2026 may have already produced an adverse three-judge panel ruling per Norton Rose Fulbright’s May 2026 update; this requires verification. Section 122 tariffs are statutorily limited to 150 days absent congressional extension, expiring July 24, 2026 — meaning the administration’s fallback authority itself has a hard expiry that may trigger either a Section 301 cascade or a Section 338 invocation, the latter untested in modern litigation.
Section 301 investigations on excess capacity and forced labor. The March 11– 12, 2026 USTR initiations covering up to 60 economies represent a substantial scope expansion. Hearings on April 28 and May 5–8, 2026 will shape remedy proposals; Greer’s stated intention to conclude before Section 122 expiry on July 24 makes the late-June and July 2026 window critical.
Cantor, Jefferies, Oppenheimer disclosure. The Wyden–Warren probe has not publicly produced a response; the Raskin probe demanded documents by March 9, 2026 with no public production confirmed. Bloomberg’s October 2025 reporting identified the firms but did not resolve whether any internal compliance reviews or SEC disclosures followed. Watch for SEC filings, Senate Finance or House Judiciary hearings, and any movement in the New York Department of Financial Services or state attorney-general inquiries.
FSMA 204 implementation through July 2028. The deferred deadline does not eliminate the rule; it concentrates loaded friction at a single 2028 detonation point that will fall on the same import classes most exposed to the 2025–2026 enforcement intensification.
TTB staffing recovery and FY2026 budget. Whether the 13% staff reduction is restored, and whether the shutdown backlog is fully cleared, will determine ongoing alcohol import friction at a structural level. The myTTB migration from Permits Online (vendor support ended December 2025) is a hidden execution risk.
OBBBA implementation and de minimis phase-out. Full phase-out by July 2027 is the most durable element of the friction infrastructure and the least dependent on any tariff authority surviving litigation. Watch for any administrative carve-outs and for litigation under the Administrative Procedure Act over CBP rulemaking implementing the phase-out.
Inspector General reports and GAO reviews. No HHS-OIG, Treasury-OIG, or GAO report has yet examined the FISP-FSMA-CBP-TTB convergence as a single phenomenon. GAO last evaluated PREDICT in 2016 (GAO-16-399). A GAO request from House Oversight or Senate Finance minority would be the most likely vehicle to produce an authoritative institutional account.
Congressional restoration efforts. The Tariff Refund Act of 2026 (S. 3905) mandating 180-day refunds with interest, the Last Sale Valuation Act introduced by Senators Whitehouse and Cassidy in February 2025, and any successor legislation following the November 2026 election are the legislative variables that could either close or further entrench the friction infrastructure.
The unverified Buffalo port hours claim. If FDA does in fact reduce hours at any secondary port of entry during 2026 — particularly Northern Border ports through which European-routed and small-volume specialty goods often clear — that would represent a concrete and observable test of the central thesis. The May 2026 announcement specifically referenced in the originating thesis is not currently substantiated in any public source surveyed; primary documentation should be sought before reliance.