UPSC Prelims Practice Questions — Firms scramble for tariff refunds as U.S. prepares to launch claim process

Q1. The International Emergency Economic Powers Act (IEEPA), invoked to impose the 'reciprocal' tariffs later invalidated by the U.S. Supreme Court in 2026, was enacted in which year — as one of the reforms of the Trading with the Enemy Act?

• A. 1977
• B. 1917
• C. 1962
• D. 2001

Q2. With reference to the International Emergency Economic Powers Act (IEEPA), consider the following statements: 1. It permits the President to act only after declaring a national emergency arising from an unusual and extraordinary threat to national security, foreign policy or the economy. 2. It descends from reforms of the Trading with the Enemy Act of 1917. 3. It expressly lists 'tariffs' among the economic measures the President is authorised to impose. 4. It empowers the President to regulate or prohibit importation and other economic transactions with foreign countries. Which of the statements given above is/are NOT correct?

1. It permits the President to act only after declaring a national emergency arising from an unusual and extraordinary threat to national security, foreign policy or the economy.
2. It descends from reforms of the Trading with the Enemy Act of 1917.
3. It expressly lists 'tariffs' among the economic measures the President is authorised to impose.
4. It empowers the President to regulate or prohibit importation and other economic transactions with foreign countries.

• A. 1 and 4
• B. 2 only
• C. 1, 2 and 4
• D. 3 only

Q3. The February 2026 U.S. Supreme Court majority struck down the IEEPA tariffs by invoking the 'major questions doctrine.' In U.S. administrative law this doctrine holds that:

• A. An agency or the President may exercise powers of vast economic or political significance only if Congress has clearly and explicitly authorized it
• B. Courts must defer to any reasonable agency interpretation of an ambiguous statute it administers
• C. Courts will not decide questions that are constitutionally committed to the political branches
• D. Congress may delegate legislative power provided an 'intelligible principle' guides the delegate

Q4. With reference to the U.S. Supreme Court decision of February 2026 on the IEEPA tariffs, consider the following statements: 1. The lead case was Learning Resources, Inc. v. Trump, heard in consolidation with Trump v. V.O.S. Selections, Inc. 2. The majority opinion was authored by Chief Justice John G. Roberts. 3. The Court held that IEEPA's power to 'regulate…importation' clearly authorised the President to set tariffs. 4. Among the original plaintiffs challenging the tariffs were 12 U.S. states. Which of the above are correctly identified?

1. The lead case was Learning Resources, Inc. v. Trump, heard in consolidation with Trump v. V.O.S. Selections, Inc.
2. The majority opinion was authored by Chief Justice John G. Roberts.
3. The Court held that IEEPA's power to 'regulate…importation' clearly authorised the President to set tariffs.
4. Among the original plaintiffs challenging the tariffs were 12 U.S. states.

• A. 1, 2 and 4
• B. 1 and 3 only
• C. 2, 3 and 4
• D. 1 and 2 only

Q5. With reference to CAPE, the U.S. Customs and Border Protection (CBP) tariff-refund system launched in 2026, consider the following statements: 1. CAPE stands for Consolidated Administration and Processing of Entries. 2. It is an electronic refund-claim system built within CBP's existing Automated Commercial Environment (ACE). 3. Its Phase 1, launched in April 2026, covered claims for roughly $90 billion of tariffs. 4. It was developed and is operated by the U.S. Department of the Treasury rather than by CBP. Which of the statements given above is/are NOT correct?

1. CAPE stands for Consolidated Administration and Processing of Entries.
2. It is an electronic refund-claim system built within CBP's existing Automated Commercial Environment (ACE).
3. Its Phase 1, launched in April 2026, covered claims for roughly $90 billion of tariffs.
4. It was developed and is operated by the U.S. Department of the Treasury rather than by CBP.

• A. 1 and 3
• B. 2 only
• C. 3 and 4
• D. 4 only

Q6. In the context of the 2026 U.S. tariff-refund process, CAPE is best described as:

• A. An electronic, consolidated system through which importers file and process claims for refunds of the invalidated tariffs
• B. A new global 10% import surcharge introduced to replace the struck-down tariffs
• C. A special federal court created solely to adjudicate tariff-refund disputes
• D. A U.S. Treasury bond programme floated to finance the refunds

Q7. With reference to U.S. Customs and Border Protection (CBP) and its institutional setting, consider the following statements: 1. CBP administers and collects duties on imported goods and functions under the Department of Homeland Security. 2. The Department of Homeland Security was established before the September 11, 2001 terrorist attacks. 3. Both CBP and U.S. Immigration and Customs Enforcement (ICE) trace part of their functions to the former U.S. Customs Service. Which of the statements given above is/are correct?

1. CBP administers and collects duties on imported goods and functions under the Department of Homeland Security.
2. The Department of Homeland Security was established before the September 11, 2001 terrorist attacks.
3. Both CBP and U.S. Immigration and Customs Enforcement (ICE) trace part of their functions to the former U.S. Customs Service.

• A. 1 only
• B. 1 and 2 only
• C. 1 and 3 only
• D. 1, 2 and 3

Q8. The Department of Homeland Security, the parent department of U.S. Customs and Border Protection, was established by which one of the following pieces of legislation?

• A. The Homeland Security Act of 2002
• B. The USA PATRIOT Act of 2001
• C. The Trade Act of 1974
• D. The Trading with the Enemy Act of 1917

Q9. With reference to the U.S. Court of International Trade (CIT) and the 2026 tariff-refund litigation, consider the following statements: 1. The CIT has jurisdiction to hear suits challenging tariffs brought by businesses as well as by states. 2. The CIT ruled that the administration had overstepped its authority by invoking emergency powers to impose sweeping tariffs. 3. In June 2026 the U.S. Department of Justice appealed the CIT's refund order, disputing its universal scope. 4. The CIT is a chamber of the U.S. Supreme Court and its decisions can never be appealed. Which of the statements given above is/are NOT correct?

1. The CIT has jurisdiction to hear suits challenging tariffs brought by businesses as well as by states.
2. The CIT ruled that the administration had overstepped its authority by invoking emergency powers to impose sweeping tariffs.
3. In June 2026 the U.S. Department of Justice appealed the CIT's refund order, disputing its universal scope.
4. The CIT is a chamber of the U.S. Supreme Court and its decisions can never be appealed.

• A. 1 and 2
• B. 2 only
• C. 3 only
• D. 4 only

Q10. On 'Liberation Day' (April 2, 2025), on top of a universal 10% baseline, which one of the following faced the highest country-specific reciprocal tariff rate announced by the U.S. administration?

• A. China
• B. India
• C. South Korea
• D. European Union

Q11. In U.S. constitutional law, the principle that Congress may not transfer its legislative power to another branch unless it lays down an 'intelligible principle' to guide the delegate is known as:

• A. The nondelegation doctrine
• B. The major questions doctrine
• C. The political question doctrine
• D. The doctrine of pith and substance

Q12. In 2025 the U.S. imposed a '25% reciprocal tariff' on Indian goods. In this context, a 'reciprocal tariff' is best understood as:

• A. A tariff the U.S. sets purportedly to mirror or offset the trade barriers a partner country imposes on U.S. goods
• B. A tariff that two countries mutually agree to remove on each other's goods under a trade pact
• C. A tariff whose proceeds are automatically refunded to the exporting country's importers
• D. A concessional tariff granted to developing countries under WTO special and differential treatment