Insights

Title candidates (3 options)

1. The Tariff Halted by the Supreme Court, and the Section 122 Trump Pulled Out — Refund and Response Strategies for Korean Companies

2. IEEPA Ruled Unconstitutional 6–3 — Cash Flow and Supply-Chain Redesign Points After the Tariff Ruling

3. Can Tariffs Be Refunded? A Practical Q&A After the US Supreme Court Ruling

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The US tariff regime has been fundamentally shaken by a single Supreme Court ruling. According to Samjong Focus published by KPMG Customs & Tax Service, on February 20, 2026, the US Supreme Court ruled 6–3 that tariffs imposed under IEEPA (the International Emergency Economic Powers Act) are unconstitutional. The three grounds for illegality were: the constitutional principle of separation of powers — tariff authority rests with Congress and cannot be substituted by the President's emergency powers; the scope-limitation principle — IEEPA authority is limited to asset freezes and transaction restrictions and does not grant standalone taxing power; and the absence of historical practice — in 50 years of IEEPA, there is no precedent of imposing tariffs on its basis.

Trump administration's Section 122 response. Immediately after the ruling, the Trump administration invoked Section 122 of the Trade Act to impose a 10% temporary surcharge on all imports worldwide for 150 days starting February 24, 2026. Section 122 — never previously used — allows tariffs up to 15%, with congressional approval required beyond 150 days. The administration is also reviewing raising the rate to 15% and transitioning to a parallel regime with Sections 301 and 232 of the Trade Act.

Refund strategy and priorities for Korean companies. The most urgent task for Korean companies is the refund strategy. Refund claims can be made via PSC (Post-Summary Correction) for unliquidated entries, and via the Protest procedure within 180 days from liquidation date for liquidated entries. Entries beyond 180 days require exceptional relief — special congressional refund legislation or a nationwide court refund order are the key variables. Until CBP issues formal guidance, existing duty-payment practice continues. Actual refunds are realistically a medium-to-long-term issue, potentially taking months to years.

What this means for M&A. This ruling is an opportunity to reassess the full supply-chain strategy of tariff-engineered businesses. First, the cash inflow from tariff refunds can become liquidity to restart M&A deals, likely catalyzing transactions for companies that postponed investment decisions under tariff burdens. Second, because Section 122 is only a 150-day temporary measure, demand for origin-structure optimization and cross-border M&A aimed at supply-chain repositioning is likely to expand over the medium-to-long term in anticipation of a new tariff regime built on Sections 301 and 232. Third, as FTA strategies are re-evaluated, the strategic value of companies with embedded origin qualifications will be highlighted, and acquisition premiums for them will form.

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Full report: KPMG Customs & Tax Service, Samjong Focus (February 2026)

Contact: Samjong KPMG M&A Center