Learning Resources, Inc. v. Trump (Tariffs; (I))

No. 24-1287
Title:	Learning Resources, Inc., et al., Petitioners v. Donald J. Trump, President of the United States, et al.
Docketed:	June 17, 2025
Linked with:	25A327
Lower Ct:	United States Court of Appeals for the District of Columbia Circuit
Case Numbers:	(25-5202)
Questions Presented

The Congressional Budget Office baseline assumes tariff revenue that the Supreme Court may be about to invalidate. The CBO integrated these tariffs into projections showing reduced primary deficits of approximately 2.5 trillion dollars over a decade. Refund liability estimates range from 108 to 133.5 billion dollars based on December 2025 CBP collection data, with some analyses suggesting total exposure approaching 200 billion dollars across all affected jurisdictions. The Court of International Trade ruled in December that it can order refunds even after liquidation. Over 600 complaints covering more than 1,000 companies are stayed pending the Supreme Court decision. If the ruling is adverse, Treasury faces a double shock: loss of projected future revenue and immediate outflow for past collections. The February refunding announcement must communicate borrowing needs into a market where dealer balance sheets are already strained and the marginal buyer has shifted from price-insensitive foreign central banks to price-sensitive leveraged hedge funds. If the Court rules broadly against tariff authority, fiscal projections must be revised upward at the precise moment Treasury needs market confidence in those projections.

Prediction markets assign 68 to 79 percent probability that the administration loses the IEEPA tariff cases. The Federal Circuit ruled 7-4 in August 2025 that IEEPA’s “regulate importation” language does not authorize sweeping tariffs. The statute permits regulation, the court found, but does not explicitly grant the power to impose duties, which is an Article I power strictly reserved for Congress. The major questions doctrine played prominently in the reasoning: Congress must speak clearly if it wishes to assign decisions of vast economic and political significance to the executive branch. Congress did not speak clearly.

Oral arguments in November 2025 revealed skepticism from justices across the ideological spectrum. Chief Justice Roberts emphasized that imposing tariffs and taxes has always been the core power of Congress. Justice Gorsuch expressed concern about the nondelegation doctrine, the principle that Congress cannot hand over its core taxation powers to the President without clear intelligible principle. Justice Kagan noted the statute lacks the specific word “tariffs,” contrasting it with other trade acts that use the term explicitly. Justice Barrett flagged the danger of allowing IEEPA to bypass established trade statutes, essentially rendering Congressional trade authority moot. The justices’ questions do not dictate the ruling, but they suggest the administration faces an uphill battle.

If the Court rules broadly, the transmission to Treasury markets operates through multiple channels. First, tariff revenue projections embedded in fiscal forecasts must be revised. The February 4 refunding announcement occurs 26 days after the ruling. Treasury officials must communicate borrowing needs into a market processing constitutional uncertainty about the revenue base funding that borrowing. The communication challenge is delicate: acknowledge the ruling’s fiscal implications without projecting panic, maintain market confidence while revising assumptions downward. Second, refund liabilities create immediate fiscal pressure. The amounts are substantial, with estimates ranging from 108 to 133.5 billion dollars based on December collection data, representing immediate cash requirements that affect Treasury’s general account management. Third, alternative tariff authorities exist but require time. Section 232 requires Commerce Department investigation. Section 301 requires USTR investigation. Section 122 is limited to balance of payments emergencies and capped at 150 days. The administration cannot seamlessly substitute authorities. There will be a gap between IEEPA invalidation and alternative implementation, and markets will price the uncertainty during that gap.

 Even if it invalidates IEEPA tariffs, the Court may limit remedy to prospective application, citing disruption from retroactive relief under the Hammons precedent. The constitutional confrontation is containable. The response is that remedy uncertainty is itself volatility-inducing. The lower courts framed the authority question sharply. Whether broad or narrow, the ruling creates a gap in executive trade authority that markets must price. The transmission to fiscal assumptions and auction demand operates even with narrow ruling, just with smaller magnitude.

How Treasury Market Plumbing Became the Single Point of Failure for the Post-1945 Order, and What Happens When Three Constraints Bind Simultaneously in February 2026

Shanaka Anslem Perera