Legal systems’ stabilising role in times of flux

The recent US Supreme Court decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA) represents an important constitutional clarification at a time of significant global economic change, writes Alan Murphy, partner and head of law, EY Law Ireland.

In its ruling, the court affirmed that the authority to impose tariffs lies with Congress under article one of the US Constitution.  

Core democratic principles

In doing so, it reinforced the core democratic principle of separation of powers between the legislative and executive branches.  

Viewed through a legal lens, this is a noteworthy moment.

For all the attention on the commercial and political implications, the judgment is first and foremost a constitutional one, reaffirming the proper allocation of powers within the US system.

That, in turn, provides a measure of clarity in an environment where questions of authority, delegation and executive reach have become increasingly relevant across many jurisdictions. 

What's changed, and what hasn't 

The ruling applies specifically to tariffs imposed under IEEPA, including certain global and country specific duties.

It does not affect other tariff regimes such as those introduced under sections 232 and 301, which remain in place. 

Nor did the Supreme Court address the practical question of refunds for tariffs already paid, an issue that lower courts and administrative processes will need to resolve in due course. 

In parallel, the US administration has already made use of alternative statutory mechanisms, including section 122 of the Trade Act, to introduce a 10% tariff for a 150-day period. 

How these alternative mechanisms are implemented to work alongside with or independent to other trade instruments remains to be clarified in law.

In simple fact, the actual rate at which the section 122 measures have been implemented has already created further uncertainty (initially announced at 15% but imposed by the Customs Border Protection agency at 10%). 

Tariff policy, therefore, remains dynamic.

What the judgment does offer is greater clarity on the boundary between legislative and executive authority, rather than a definitive settlement of US trade policy overall. 

Ireland is a small, open economy deeply connected to global trade flows.

Our businesses, particularly in sectors such as pharmaceuticals, food and beverage, and advanced manufacturing, are attentive to developments in major export markets.

Disruption

It is important to note, however, that this ruling does not in itself create immediate disruption for Irish industry – it applies to a subset of tariffs and does not clarify the next steps on refunds. 

Where it does matter is in shaping the broader environment in which Irish businesses operate and acting as a continuing reminder to companies that they need to be adaptable and flexible in order to navigate the uncertainty that these trade policy changes are bringing to their business decisions on an unfortunately regular basis. 

For in-house legal teams, this environment demands something different to what was required a decade ago.

Increasingly, they must help their organisations adapt to scenarios where regulatory, economic, and geopolitical conditions shift rapidly. 

Many EY Law clients have already begun redesigning elements of their contracting frameworks to reflect this reality.

Essential tools

Change of law provisions, tariff risk clauses, supply-chain contingencies, and pricing adjustment mechanisms are no longer niche, they are becoming essential tools. 

We are also seeing increased focus on contractual termination mechanisms, with many clients now seeking to include or strengthen termination clauses that account for geopolitical uncertainty and rapidly changing external conditions.  

Ireland’s strategic strengths – openness, strong regulatory alignment, deep talent pools and trusted institutions – continue to serve us well. 

This ruling does not change that.

What it reinforces is the need for businesses to build flexibility into their operations, while continuing to diversify markets and strengthen resilience against future policy shifts. 

With uncertainty now a permanent feature of the operating environment, legal teams have a critical role in building organisational resilience and supporting decision‑making amid complex, shifting conditions. 

Useful historical comparison 

The constitutional dimension of the ruling may remind some practitioners of Britain’s judicial decisions during the Brexit process, when courts were called upon to clarify the limits of executive authority.

While the contexts differ, the parallel is useful in demonstrating how constitutional questions can sit at the centre of major economic developments, and how legal systems play a stabilising role during periods of uncertainty. 

Implications for legal teams 

Legal teams are increasingly working alongside tax, commercial and supply chain colleagues to help businesses navigate these complexities.

From a tax perspective, the ruling raises questions around tariff refund eligibility, timing and documentation, and knock-in impacts of how a customs duty refund may impact corporate tax reporting and planning, areas where early preparation can help businesses respond effectively once administrative processes become clearer. 

Multidisciplinary approach

Recent geopolitical events reinforce the need for that multidisciplinary approach.

The weekend’s developments in the Middle East have added another layer of volatility to an already unsettled global landscape, underlining how quickly external shocks can reshape trade flows, energy markets and operational risk.

As set out in EY’s 2026 Geostrategic Outlook, Irish businesses are now operating in a NAVI world:

• Non‑linear,
• Accelerated,
• Volatile, and
• Interconnected, where supply-chain exposure can shift overnight.

Policy shifts

Geopolitics will continue to influence markets throughout 2026 and beyond.

For legal teams, the task is not to predict individual policy shifts, but to help build organisational structures capable of adapting to them.