Intro
On February 20, 2026, the U.S. Supreme Court issued its decision in Learning Resources, Inc. v. Trump — a 6-3 ruling holding that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. For FTZ operators, the ruling didn’t end the compliance complexity. It just changed the statute you’re working under.
Here’s what you actually need to know.
What changed on February 24, 2026
The Supreme Court’s decision had immediate and significant trade implications, but several critical issues remain unresolved. Holland & Knight On the same day as the ruling, the administration issued an executive order terminating the IEEPA-based tariffs and a proclamation imposing a new 10% global tariff under Section 122 of the Trade Act of 1974. The following day, President Trump announced on Truth Social that he would increase the rate to 15%, the maximum allowed under Section 122. WilmerHale The Section 122 surcharge applies to substantially all imports and carries a statutory expiration date of July 24, 2026 — 150 days from its effective date — unless Congress votes to extend it.
What didn’t change: Section 232 and Section 301 tariffs remain unaffected.The suspension of duty-free de minimis treatment continues. And the compliance obligations for FTZ operators are still real — they’re just operating under a new authority.
The PF status requirement: what it means for your zone
This is the most operationally significant change for FTZ users.
The proclamation specifies that merchandise subject to the Section 122 tariff admitted to an FTZ on or after 12:01 a.m. EST February 24, 2026 must be admitted in Privileged Foreign (PF) status — generally fixing the applicable duty rate for later withdrawal for consumption.
In practical terms: upon entry for consumption, duties will be assessed at the rate in effect at the time of admission into the FTZ. That means the duty rate is locked in at admission, not at withdrawal. If you’re holding goods in zone and the rate changes — in either direction — the rate that applied when those goods were admitted is the rate you pay.
While FTZ operations are constrained by the privileged foreign status requirement, they retain value for manufacturing operations that can leverage inverted tariff benefits or exemption eligibility for finished products. FTZs are not a workaround for the Section 122 surcharge. But they remain a viable part of a broader tariff mitigation strategy when used correctly.
FTZ operators and zone users should confirm that admission procedures have been updated to reflect PF status requirements and that broker instructions align with CBP’s CSMS guidance issued February 23, 2026.
The refund question
Nearly 2,000 importers filed cases at the CIT challenging the IEEPA tariffs and seeking refunds. The CIT stayed all new cases pending the Court’s decision. Since the ruling, that number has grown.
The Supreme Court decision and executive order do not establish an automatic refund mechanism for IEEPA duties already paid. Jurisdiction over any recovery of those duties will return to the U.S. Court of International Trade, and refunds — if granted — are expected to proceed through litigation or formal administrative processes.
The mechanics are still being determined. Debates are expected to play out repeatedly in the coming months over who is entitled to the proceeds — the importer of record or downstream parties to whom the cost of the tariff was passed.
What you can do right now: document everything. Importers should preserve and organize records of all entries subject to IEEPA tariffs, including entry summaries, duty payment documentation, and internal allocation of tariff costs. If a refund pathway opens, the importers who are positioned to move are the ones who kept clean records.
For FTZ-specific entries, consult with your broker or compliance team on whether protests are warranted before the 180-day post-liquidation window closes on affected entries.
What FTZ operators should be doing right now
The dust from February 20 is still settling. Section 301 investigations the administration announced will likely produce additional tariff actions — ones that, unlike Section 122, are not time-limited or capped. The compliance picture will continue to evolve.
In the near term, focus on four things:
- Update your FTZ admission procedures to require PF status for all covered goods admitted on or after February 24.
- Confirm your broker instructions reflect current CBP CSMS guidance, including the correct HTS classification under 9903.03.01 and applicable exemption codes.
- Assess your exemption eligibility — the Section 122 exclusion list largely mirrors the IEEPA exemption framework, but verify against the Annexes for your specific commodity categories.
- Build your refund readiness now: identify IEEPA-affected entries, map liquidation dates, and consolidate documentation before you need it.
ShipLilly can help
The trade compliance environment isn’t stabilizing. Staying current — on CBP guidance, CIT developments, and the next round of tariff actions — is a full-time job.
ShipLilly works with FTZ operators and importers who need a compliance partner who understands how the rules actually work, not just what they say on paper. If you want to review your current FTZ procedures in light of the February 24 changes, contact us for a compliance review.
