On February 20, 2026, the Supreme Court struck down every tariff imposed under the International Emergency Economic Powers Act — a 6-3 ruling that invalidated more than $170 billion in duties collected since April 2025 [1][2]. By that evening, the administration had already pivoted, invoking Section 122 of the Trade Act of 1974 to slap a 10% global tariff on imports while it regrouped [3]. Six weeks later, on April 2, it restructured Section 232 tariffs on steel, aluminum, and copper with a new tiered system topping out at 50% [4]. And three days ago, a federal court heard oral arguments on whether the Section 122 tariff is legal either [5].
If you’re a manufacturer trying to figure out what you actually owe, what you might get back, and what your real costs are — welcome to the most chaotic trade environment in a century. We’ve spent 23 years implementing SAP Business One for manufacturers, and we’ve never seen anything like this. Your ERP matters now more than ever.
Frequently Asked Questions
Q: The Supreme Court struck down IEEPA tariffs. Does that mean I’m getting a refund on duties I already paid?
Yes — potentially. The Court of International Trade ordered refunds to all importers, not just the companies that filed suit [6]. CBP is building a new system called CAPE inside ACE to process 53 million affected entries. But you have to file for it, and interest is accruing at roughly $650 million per month across all importers [7]. If you imported anything subject to IEEPA tariffs between April 2025 and February 2026, you need to act now to preserve your refund rights. See the section below on the refund process.
Q: Are Section 232 tariffs (steel, aluminum, copper) going away too?
No. Section 232 tariffs are authorized under entirely different legislation and were not touched by the Supreme Court ruling [1]. In fact, the administration doubled down on April 2, 2026, restructuring Section 232 with a tiered system: 50% on primary metal articles, 25% on derivative goods, and 15% on certain industrial equipment through 2027 [4]. The effective tariff rate on steel and aluminum sits at 41.1% as of early 2026 [8]. These aren’t going anywhere.
Q: What about the new 10% global tariff under Section 122?
It’s already being challenged. Twenty-three states led by New York sued to block it, and the Court of International Trade heard oral arguments on April 10 [5][9]. Section 122 limits tariffs to 15% maximum for 150 days without congressional approval. The legal basis — “large and serious balance-of-payments deficits” — is shaky, given that the government previously argued trade deficits are “conceptually distinct from balance-of-payments deficits” [10]. This tariff could be struck down within months. Your ERP needs to be ready for either outcome.
Q: Can my ERP actually handle all of this, or do I need a separate trade compliance system?
Most mid-market ERPs — SAP Business One included — have native landed cost tracking, customs group management, and flexible pricing structures built in. The problem isn’t capability; it’s configuration. The vast majority of manufacturers we work with have never turned these features on. You don’t need a new system. You need to properly configure the one you have — and right now, you need it configured to track which legal authority each tariff falls under, because that determines whether those costs are permanent, temporary, or refundable.
Q: What’s the single biggest mistake manufacturers are making right now?
Treating all tariffs as one bucket. IEEPA tariffs are refundable. Section 232 tariffs are not. Section 122 tariffs may be struck down in weeks. If your ERP doesn’t distinguish between these authorities, you can’t calculate your true cost of goods, you can’t model scenarios, and you can’t file accurate refund claims. Every manufacturer I talk to who’s still managing tariffs in a spreadsheet is either leaving money on the table or setting themselves up for a compliance nightmare — or both.
The Legal Earthquake: What Actually Happened
Let me lay out the timeline, because it matters for everything that follows.
February 20, 2026: The Supreme Court rules 6-3 in Learning Resources v. Trump that the International Emergency Economic Powers Act does not authorize tariffs [1]. Chief Justice Roberts is joined by Gorsuch, Barrett, and three Democratic appointees. Kavanaugh dissents, warning that processing refunds will be “a mess” [2]. He wasn’t wrong.
In one ruling, the legal basis for the reciprocal tariffs that defined U.S. trade policy since Liberation Day — April 2, 2025 — is gone. More than $170 billion in IEEPA tariffs collected over that period are now potentially refundable [6].
The same day, the administration invokes Section 122 of the Trade Act of 1974, imposing a 10% global tariff on imports, with threats to raise it to 15% [3]. Section 122 was designed for temporary balance-of-payments emergencies. It caps tariffs at 15% and expires after 150 days without congressional approval. The administration’s use of it is immediately controversial.
March 4, 2026: Court of International Trade Judge Richard Eaton orders CBP to refund IEEPA tariffs to all importers — not just the plaintiffs who brought the case [6]. CBP responds that it “cannot comply” with the timeline and begins building a new processing system [11].
April 2, 2026: The administration restructures Section 232 tariffs on steel, aluminum, and copper. New tiered rates: 50% on primary metal articles, 25% on derivative goods, 15% on certain industrial and electrical grid equipment through 2027 [4]. Tariffs now apply to the full customs value of imported products, not just the metal content. The same day, pharma tariffs of up to 100% are announced [12]. Manufacturing drawback is limited to USMCA countries [13].
April 10, 2026: The Court of International Trade hears arguments on the legality of the Section 122 tariff. Twenty-three states, led by New York, are challenging it [5][9].
That’s where we stand today. Three different tariff authorities. One struck down and refundable. One active but possibly illegal. One expanded and firmly in place. And your ERP needs to track all three.
The $170 Billion Refund Opportunity You Can’t Afford to Ignore
This is the part most manufacturers haven’t fully processed yet. The Supreme Court ruling didn’t just change future tariff policy — it retroactively invalidated duties that have already been collected. If you imported goods subject to IEEPA tariffs between April 2025 and February 2026, you may be owed a significant refund.
Here’s what you need to know:
The scope is massive. CBP estimates 53 million customs entries are affected. Of those, 20.1 million are still unliquidated — meaning the government hasn’t finalized them yet, which simplifies the refund process for those entries [11]. Interest is accruing on the full amount at roughly $650 million per month across all importers [7]. Every week you wait costs money.
You have to file. The CIT ruling extends refund eligibility to all importers, but you still need to submit a claim. CBP is building a new system called CAPE (Claims for IEEPA Tariff Refunds) inside the Automated Commercial Environment (ACE) portal [11]. You’ll need to submit entry data in CSV format and enroll in ACH for electronic refund payments. CBP is processing in phases — simple, clean entries first, with more complex cases involving antidumping/countervailing duties coming later.
Major companies are already filing. FedEx, Costco, L’Oreal, Dyson, and Nissan are among the companies that have moved to preserve their refund rights [6]. If you’re a mid-market manufacturer who imported tariffed goods over the past year, you should be doing the same.
Your ERP data is the foundation of your claim. This is where it gets practical. To file a refund claim, you need to produce a detailed history of every import entry subject to IEEPA tariffs: entry numbers, HTS classifications, duty amounts paid, dates, and supporting documentation. If that data is scattered across spreadsheets, emails, and paper files, assembling a claim is going to be painful and slow. If it’s in your ERP — with landed cost documents tied to Goods Receipt POs and A/P invoices — you can pull it in hours.
Here’s the uncomfortable question: can you produce, right now, a complete list of every IEEPA tariff payment you’ve made since April 2025, with supporting documentation? If the answer is no, that’s your first priority.
The Legal Authority Shell Game: Why Your ERP Needs to Know the Difference
Here’s the core problem that most tariff discussions miss: not all tariffs are created equal anymore. They come from different legal authorities, they have different legal statuses, and they have fundamentally different implications for your costs.
IEEPA tariffs (reciprocal tariffs, April 2025 – February 2026): Struck down. Refundable. If you’re still carrying these as permanent costs in your ERP, your cost of goods sold is wrong and your margins look worse than they actually are.
Section 122 tariffs (10% global, imposed February 20, 2026): Active but legally challenged. Limited to 15% maximum, 150 days without congressional action. Could be struck down by the CIT any day. If you’re modeling these as permanent, you may be making sourcing decisions based on costs that evaporate in months.
Section 232 tariffs (steel, aluminum, copper, derivatives): Fully in effect. Not challenged by the Supreme Court ruling. Recently expanded and restructured [4]:
- 50% on primary metal articles (steel, aluminum, copper)
- 25% on derivative goods containing these metals
- 15% on certain industrial and electrical grid equipment (through 2027)
- Applied to full customs value, not just metal content
- Manufacturing drawback limited to USMCA countries [13]
Why this matters for your ERP: If your system tracks “tariff cost” as a single line item, you can’t distinguish between a duty payment you’re getting refunded, a duty payment that might disappear in three months, and a duty payment that’s permanent. That means your landed costs are unreliable, your scenario modeling is useless, and your refund claims are harder to assemble.
The fix is structural. Your ERP needs to tag every tariff-related cost with the legal authority behind it. In SAP Business One, this means using customs groups, user-defined fields, or separate landed cost allocation categories to distinguish IEEPA, Section 122, and Section 232 duties. It’s not complicated. But almost nobody was doing it before February 20, because nobody had to.
Now you do.
5 Things to Fix in Your ERP Right Now
Everything above is context. Here’s the operational playbook. These five fixes aren’t aspirational — they’re things you can configure in SAP Business One (and most mid-market ERPs) this quarter. Given what’s happening in trade law, I’d argue you can’t afford not to.
1. Fix Your Landed Costs — And Separate Them by Tariff Authority
The problem: Most manufacturers track purchase price, maybe freight, and call it a day. When tariffs were 2-3%, that was a rounding error. When they’re 25-50%, it’s the difference between a profitable job and a money-losing one. But the new wrinkle is this: some of those tariff costs are refundable, some are temporary, and some are permanent. Lumping them together gives you a cost number that’s wrong in three different ways.
What to do:
- Configure landed cost documents tied to every Goods Receipt PO for imported items. Allocate customs, broker, freight, and insurance costs across line items by quantity, weight, value, or volume.
- Create separate landed cost categories for each tariff authority. IEEPA duties (refundable), Section 122 duties (temporary/challenged), and Section 232 duties (permanent). This is the single most important structural change you can make right now.
- Set up the “Projected Customs” field on your items so expected duties flow into item costs before the actual duty invoice arrives. Your real-time inventory valuation and job costing will reflect reality.
- Create customs groups by HTS classification and tariff authority. When rates change — and they will — you update one group, not 500 item records.
- Back-tag your IEEPA duty payments so you can identify refund-eligible amounts. If you’ve been booking all tariff costs to a single GL account, create sub-accounts or use a dimension/project code to separate them retroactively.
With the effective tariff rate on steel and aluminum at 41.1% [8] and derivative goods facing 25% on their full customs value [4], even a small error in landed cost is a five-figure mistake on a single shipment. And if you don’t separate IEEPA costs, you’re leaving refund money on the table.
2. Accelerate Multi-Sourcing — The Legal Uncertainty Makes It Non-Negotiable
The problem: For twenty years, the playbook was consolidate volume with the cheapest supplier, usually overseas. That worked when trade was stable. In an environment where tariff rates change based on court rulings, presidential proclamations, and 150-day statutory clocks, single-sourcing is a bet you can’t control.
Consider: if Section 122 is struck down, your 10% global tariff exposure disappears overnight. If it’s upheld and Congress extends it, it could go to 15%. If Section 232 rates get challenged next (unlikely, but nothing is impossible in this environment), your steel costs swing by 25-50%. You need suppliers — and your ERP needs supplier data — on both sides of every scenario.
What to do:
- Build out alternate vendor records for every imported item with tariff exposure. Include domestic alternatives, nearshore options (Mexico, Canada for USMCA-qualifying goods), and secondary international sources.
- Maintain vendor-specific pricing with tariff-adjusted landed costs for each supplier. An overseas supplier at a lower unit cost with 50% Section 232 duty versus a domestic supplier at a higher unit cost with zero tariff exposure — your ERP should be able to compare these in real time.
- Use MRP to factor in lead time differences. A domestic supplier with two-week lead time and zero tariff risk may beat an overseas supplier with eight-week lead time and legal uncertainty, even at a higher unit cost.
- Track USMCA qualification status for nearshore suppliers. Nearly 85% of imports from Canada and Mexico are now claiming USMCA exemptions [8]. If you’re not evaluating USMCA-qualifying alternatives, you’re overpaying.
KPMG’s 2026 survey found that 26% of companies are formally executing reshoring plans, up from 10% six months ago [14]. But 60% of executives say full reshoring takes one to three years. In the meantime, multi-sourcing is your hedge against a legal landscape that changes month to month.
3. Get Real-Time Margin Visibility — Including Potential Refunds
The problem: A manufacturer quotes a job in January, wins it in March, starts production in April. By May, the tariff rate on a key input has changed, the supplier raised prices, and actual cost is 12% higher than quoted. Nobody finds out until month-end close.
That’s bad enough in a normal environment. In this one, it’s compounded by the fact that some of your tariff costs might come back as refunds. If you’re carrying IEEPA duties as permanent costs, your margins look worse than they are. If you’re not accounting for Section 122 duties that might be struck down, your forward-looking margin projections are unreliable.
What to do:
- Implement real-time cost roll-ups that include current tariff-adjusted material costs. Your bill of materials should reflect the latest landed costs, not historical averages from six months ago.
- Set up margin alerts at the order level. When actual costs on an open production order exceed quoted cost by a defined threshold — say 5% — someone needs to know now, not when the job closes.
- Update standard costs monthly, not annually. The old practice of annual standard costing is dead. Monthly is the minimum in this environment. Some of our clients are doing weekly updates on high-volume imported components.
- Build a tariff impact dashboard showing: current duty rates by commodity and authority, year-over-year cost changes by item, margin erosion by product line, exposure by country of origin, and potential refund amounts. SAP B1’s query tools and Crystal Reports can deliver this without third-party software.
- Model refund scenarios into your financial projections. If you have $2 million in potential IEEPA refunds pending, that’s material to your P&L. Your CFO should be able to see that number alongside current margin data.
The NAM Q4 2025 survey found that 80.3% of manufacturers have paid tariffs on their inputs, with a third paying more than $1 million and 10% paying more than $100 million [15]. Meanwhile, 36.4% are delaying or canceling capital investments [16]. Real-time visibility isn’t a nice-to-have — it’s how you decide which investments to make and which to defer.
4. Build Scenario Models That Include Legal Outcomes
The problem: On April 2, 2026, the administration announced restructured Section 232 tariffs and pharma tariffs up to 100% on the same day [4][12]. Six weeks earlier, the Supreme Court wiped out an entire tariff regime overnight. If your scenario modeling only covers “rates go up” and “rates go down,” you’re missing the most important variable: legal authority.
Companies that bet on the IEEPA tariffs being permanent lost that bet. Companies betting on Section 122 being permanent may lose that bet too. The question isn’t just “what if rates change?” It’s “what if the legal basis for this tariff disappears?”
What to do:
- Build tariff rate tables as configurable parameters, not hard-coded values. In SAP Business One, use user-defined fields on items and vendors to store current rates by authority. When a rate changes — or a court strikes it down — you update the table, not every item and BOM individually.
- Model four scenarios, not two:
- Baseline: Current rates hold across all authorities
- Section 122 struck down: 10% global tariff disappears; Section 232 remains
- Section 122 extended/increased: Congress approves; rate goes to 15%
- Escalation: New tariffs added (pharma at 100%, additional Section 232 expansions)
- Run scenario-based margin analysis by product line. Some products absorb increases because of high base margins. Others go underwater. Know which is which before the next ruling, not after.
- Build a tariff change response playbook: who updates the system, what gets updated, how pricing is reviewed, who gets notified. The companies that respond in days instead of weeks planned the response in advance.
Forty-eight percent of organizations are now actively modeling tariff mitigation strategies [17]. The difference between the ones that are reacting and the ones that are leading is whether their models account for legal outcomes — not just rate changes.
5. Lock Down Compliance and Documentation — It’s Your Refund Ticket
The problem: When tariffs were low and enforcement relaxed, sloppy documentation was a minor risk. Now, with duties at 25-50%, the financial incentive for proper classification has skyrocketed. But here’s the new dimension: your documentation isn’t just about avoiding audits anymore. It’s the foundation of your refund claims.
To get IEEPA refunds through the CAPE system, you need clean entry data: entry numbers, HTS codes, duty amounts, dates, and supporting commercial documentation [11]. If your records are incomplete, your refund claim is incomplete. Given that interest is accruing at $650 million per month across all importers [7], delays cost real money.
What to do:
- Centralize HTS classifications in your ERP. Every imported item should carry its HTS code, applicable duty rate, tariff authority, and country of origin. Use customs groups and user-defined fields at the item level.
- Maintain an unbroken documentation chain for every import. Goods Receipt PO → Landed Cost Document → A/P Invoice should create a complete audit trail from the supplier’s commercial invoice to your general ledger. SAP B1 supports this natively.
- Review classifications against the April 2026 Section 232 changes. The shift to full-customs-value tariffs on derivative products means items previously classified one way may now fall into a different duty tier. If you haven’t reviewed classifications in the last 90 days, you’re overdue.
- Prepare your IEEPA refund documentation now. Pull every import entry from April 2025 through February 2026 that was subject to IEEPA tariffs. Compile entry numbers, HTS classifications, duty amounts, and commercial invoices. Get this into the CSV format CBP will require. Enroll in ACH for electronic refunds. Don’t wait for the CAPE portal to go live — have your data ready.
- Set up a compliance calendar. Track refund filing deadlines, Section 122 expiration (150-day clock), exemption windows, and new tariff effective dates. The 15% transitional rate for industrial equipment is only through December 2027 [4]. Missing a deadline in this environment is unforgivable.
- Prepare for CBP audits. Higher tariffs mean higher collections and higher scrutiny. Can you produce, from your ERP, a complete import history with HTS classifications, duty payments by authority, and origin documentation for any item Customs asks about? If the answer is no, that’s an urgent fix.
The Bottom Line
The tariff environment didn’t just get harder — it got legally unstable. The Supreme Court invalidated one tariff regime. The replacement is being challenged in court right now. Section 232 got expanded and restructured. Pharma tariffs up to 100% are incoming [12]. And somewhere in this chaos, there’s $170 billion in refunds that manufacturers are entitled to but haven’t claimed yet [6].
The numbers tell the story: 89,000 manufacturing jobs lost since Liberation Day [18]. Eighty percent of manufacturers paying tariffs on inputs [15]. Construction spending on manufacturing facilities down from $230.9 billion to $196.2 billion [19]. Fifty-five percent of business leaders planning to raise prices another 10-15% in the next six months [14].
Here’s what hasn’t changed: if your ERP doesn’t reflect the actual, tariff-adjusted cost of doing business — broken down by legal authority, with refund-eligible amounts identified, with scenario models for the next court ruling — then every decision you make on pricing, sourcing, quoting, and capital allocation is based on bad data.
The five fixes I’ve outlined aren’t exotic. Landed cost tracking, multi-source vendor management, real-time costing, scenario modeling, and compliance documentation already exist in SAP Business One and most mid-market ERP systems. What’s new is the urgency — and the need to structure these capabilities around a legal landscape that’s shifting under your feet.
If you need help getting these pieces working — for your specific materials, your specific supply chain, your specific tariff and refund exposure — that’s what we do. We’ve been implementing SAP Business One for manufacturers for over 23 years, and right now, getting the ERP right is the difference between navigating this mess and getting buried by it.
References
[1] Tax Foundation, “Tariff Tracker: 2026 Trump Tariffs & Trade War by the Numbers.” https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/
[2] SCOTUSblog, “The Remaining Questions After the Supreme Court’s Tariffs Ruling,” March 2026. https://www.scotusblog.com/2026/03/the-remaining-questions-after-the-supreme-courts-tariffs-ruling/
[3] NBC News, “Trump tariffs lawsuit: Federal court hears case on IEEPA, Section 122 trade act.” https://www.nbcnews.com/politics/trump-administration/trump-tariffs-lawsuit-federal-court-ieepa-section-122-trade-act-rcna273697
[4] White House Fact Sheet, “President Donald J. Trump Strengthens Tariffs on Steel, Aluminum, and Copper Imports,” April 2, 2026. https://www.whitehouse.gov/fact-sheets/2026/04/fact-sheet-president-donald-j-trump-strengthens-tariffs-on-steel-aluminum-and-copper-imports/
[5] Reuters, “U.S. trade court weighs legality of Trump 10% global tariff,” April 10, 2026. https://www.reuters.com/legal/government/us-trade-court-weighs-legality-trump-10-global-tariff-2026-04-10/
[6] Norton Rose Fulbright, “Potential Refunds: US Supreme Court Overturns IEEPA Tariffs.” https://www.nortonrosefulbright.com/en/knowledge/publications/20f2de87/potential-refunds-us-supreme-court-overturns-ieepa-tariffs
[7] New York Times, reporting on interest accrual on IEEPA tariff refunds, as cited by PwC: https://www.pwc.com/us/en/services/tax/library/pwc-sc-decision-on-ieepa-tariffs-reshapes-trade-auth-and-introduces-potential-refund-op.html
[8] Penn Wharton Budget Model, “Effective Tariff Rates and Revenues (Updated March 16, 2026).” https://budgetmodel.wharton.upenn.edu/p/2026-03-16-effective-tariff-rates-and-revenues-updated-march-16-2026/
[9] PBS NewsHour, “Federal court hears new case against Trump’s latest global tariffs.” https://www.pbs.org/newshour/economy/federal-court-hears-new-case-against-trumps-latest-global-tariffs
[10] Bonadio Group, “IEEPA Tariffs Struck Down: What Recent Court Rulings Mean for Manufacturers & Distributors.” https://www.bonadio.com/article/ieepa-tariffs-struck-down-what-recent-court-rulings-mean-manufacturers-distributors/
[11] EY, “Five Actions After the Supreme Court Tariff Ruling.” https://www.ey.com/en_us/insights/tax/five-actions-after-the-supreme-court-tariff-ruling
[12] White House Fact Sheet, “President Donald J. Trump Bolsters National Security and Strengthens U.S. Supply Chains by Imposing Tariffs on Patented Pharmaceutical Products,” April 2, 2026. https://www.whitehouse.gov/fact-sheets/2026/04/fact-sheet-president-donald-j-trump-bolsters-national-security-and-strengthens-u-s-supply-chains-by-imposing-tariffs-on-patented-pharmaceutical-products/
[13] Perkins Coie, “Restructured and Additional Section 232 Tariffs on Aluminum, Steel, and Copper,” April 2026. https://perkinscoie.com/insights/update/restructured-and-additional-section-232-tariffs-aluminum-steel-and-copper
[14] KPMG, “KPMG 2026 Tariff Survey: A Year into Tariffs, U.S. Businesses Navigate Declining Margins,” March 30, 2026. https://kpmg.com/us/en/media/news/kpmg-2026-tariff-survey.html
[15] National Association of Manufacturers, “Q4 2025 Manufacturers’ Outlook Survey,” December 17, 2025. https://nam.org/2025-fourth-quarter-manufacturers-outlook-survey/
[16] National Association of Manufacturers / Manufacturing CPA analysis of NAM survey data, August 2025. https://macpas.com/tariffs-and-the-manufacturing-industry-navigating-a-shifting-landscape/
[17] Supply Chain Dive, “Firms Plan to Boost Supply-Chain Agility as Tariff Turmoil Persists,” March 2026. https://www.supplychaindive.com/news/us-firms-plan-to-boost-supply-chain-agility-efforts-tariffs-trump/814694/
[18] Bureau of Labor Statistics data, as reported by Tax Foundation, “Liberation Day Was One Year Ago: Did the President’s Tariff Promises Happen?” April 2, 2026. https://taxfoundation.org/blog/liberation-day-trump-tariffs/
[19] Invezz, “One Year On, Did Trump’s Liberation Day Tariffs Make America Wealthier?” April 4, 2026. https://invezz.com/news/2026/04/04/one-year-on-did-trumps-liberation-day-tariffs-make-america-wealthier/
[20] Thomson Reuters, “Impact of Tariffs on Tax and Trade in 2025,” October 29, 2025. https://tax.thomsonreuters.com/blog/impact-of-tariffs-on-tax-and-trade/
[21] Global Trade Magazine, “Tariffs, Reshoring, and What It Means for Recruiting in 2026 and Beyond,” March 2026. https://www.globaltrademag.com/tariffs-reshoring-and-what-it-means-for-recruiting-in-2026-and-beyond/