The US Supreme Court recently issued a 6-3 ruling striking down certain tariffs originally imposed under the International Emergency Economic Powers Act of 1977 (IEEPA). The court determined that IEEPA, which allows the president to regulate economic transactions during a national emergency, did not grant President Donald Trump’s administration the power to impose these specific levies. Following this decision, the federal government halted collection of IEEPA-related duties on February 24, 2026. The diagnostics industry has now entered a murky period regarding potential refunds.
For laboratory professionals, this ruling represents a significant shift in the financial landscape of laboratory procurement. In a report by our sister publication, The Dark Report, which included an interview with Christopher Duncan, a former senior attorney for US Customs and Border Protection (CBP), experts explained that while manufacturers have the potential to recoup costs, labs are even less clear about when or how they might see relief.
The process of reclaiming these funds is neither automatic nor simple. Duncan, now tariff and customs of counsel at law firm Squire Patton Boggs, told The Dark Report that importers must be vigilant. “No one is going to get an automatic refund. They have to go out and proactively apply and take the appropriate steps,” Duncan stated.
The CBP is currently developing the necessary pathways to refund approximately $166 billion in collected tariffs, plus interest. This is being handled through a module within the Automated Commercial Environment (ACE) called the Consolidated Administration and Processing of Entries (CAPE), which will process refunds in four stages:
- Claim submissions
- Recalculation of duties without IEEPA tariffs
- Liquidation or reliquidation review
- Electronic refund issuance
CBP projects the system should be ready to accept claims as soon as April 2026, though a specific estimate for when refund payments would be delivered has not been provided.
The regulatory lock-in of diagnostic supplies
The diagnostics sector was hit particularly hard by these tariffs due to the operational necessity of globally integrated supply chains. According to a 2026 position paper from bioMérieux, manufacturing a single diagnostic device can involve assembling over 1,000 individual components—including reagents, optical sensors, semiconductors, and specialty plastics—sourced from a wide network of international suppliers.
Unlike other industries that might pivot to domestic suppliers to avoid taxes, the in vitro diagnostics (IVD) industry is constrained by stringent regulatory requirements. Changing even a minor material or a change in supplier often requires new validation and regulatory approval. In the US, this generally means filing a supplemental premarket submission or a new premarket approval with the Food and Drug Administration, a process that can take multiple years. This environment forced manufacturers to pay the tariffs—which ranged from 10 percent up to 50 percent—and pass those costs along to laboratories as part of their pricing strategy.
Leveraging refund transparency in vendor negotiations
To be clear, labs are not in direct line for refunds simply because they are clients of IVD firms. According to reporting by The Dark Report, those discussions will boil down to customer relationships. However, diagnostic kit firms do have the potential to recoup tariff costs if they are vigilant about the steps they need to take.
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For example, the CEO of Abbott Laboratories—the world's fourth largest IVD manufacturer—previously indicated the company expected to pay nearly $200 million in tariff payments in 2025 alone. Duncan noted that when he calculates refunds for clients, the totals are almost always significantly larger than expected, especially when factoring in seven percent interest. Now that these costs are being recovered, lab managers have an opportunity to discuss recompense with their vendors.
Timing is critical. There is a 180-day window to file an official protest once an entry liquidates—the point when duties are finalized—after which the right to a refund is waived. For early China tariffs that began liquidating in late 2025, those windows will likely close in May 2026.
Lab managers should consider the following actions:
- Review 2025 and 2026 invoices for tariff fees that were passed along as part of a pricing strategy
- Inquire with IVD sellers regarding what recompense will work its way down to the testing labs
- Audit current vendor contracts to identify where the levy burden may have been forced onto the laboratory
By staying informed on the progress of the CBP, laboratory leaders can ensure they are part of the discussion as these illegal tariff costs are recouped by the industry.
For full details on the diagnostic industry's response to these rulings, see the original reporting in The Dark Report.
This article was created with the assistance of Generative AI and has undergone editorial review before publishing.
