IEEPA Tariff Refunds Are Far from Ideal—and Could Get Farther

With Monday’s launch of the Trump administration’s new tariff refund system, the process of returning more than $166 billion in illegally collected “emergency” import taxes has entered a new stage. Unfortunately, the system’s design is less than ideal and risks leaving thousands of American companies with much less than they’re legally owed. This blog post summarizes the refund system just unveiled by the US Customs and Border Protection—called the Consolidated Administration and Processing of Entries (CAPE)—and explains the good, the bad, and what we still don’t know.

The bottom line: Intentionally or not, the federal government will likely keep tens of billions of dollars it should have returned to importers months ago—and that it promised US courts it would return if they invalidated the tariffs at issue.

Background 

As we discussed in March, the Supreme Court decision in Learning Resources, Inc. v. Trump struck down the tariffs the administration imposed under the International Emergency Economic Powers Act (IEEPA) but left the issue of refunds unresolved. Thousands of US importers thus filed suit in the US Court of International Trade (CIT) to get their money back. In one of those proceedings, the judge assigned to all refund claims ordered US Customs and Border Protection (CBP) to issue tariff refunds “immediately.” The agency responded that the limitations of its online import processing system (i.e., ACE) prevented it from issuing quick refunds, so the judge gave CBP a short amount of time to come up with a refund plan and demanded the agency keep the Court updated on its implementation. That plan involved a new online platform, CAPE, to process refund requests, and the system was officially launched on Monday.

Here’s what we know right now.

The Good 

Most obviously, it’s a good sign that CBP has developed a system to consolidate and process IEEPA tariff refunds. Yes, it took a Supreme Court ruling and subsequent CIT order to spur CBP into action, but it’s still positive that the agency didn’t drag its heels or refuse outright to implement the CIT order. Given that refunds are a problem of the federal government’s own creation, establishing CAPE in a timely manner is the least they could do—and, thanks to the Court, they did it. Good. 

It’s also encouraging that US importers who logged into CAPE this week do not seem to have had significant issues accessing and using the CAPE system. Of course, the system was only deployed on Monday, so it’s too early to rule out future technical issues (some companies have reported errors in their submissions due to heavy site traffic, while others have raised some technical limitations that will require more work on their and CBP’s end). We’ll have to wait several weeks before confirming that the system has been relatively seamless. But for now, CAPE has been deployed on time and is accessible to eligible importers. Compared to other government website debacles, CAPE should be considered a win, but this is admittedly a low bar to clear.

The Bad 

Unfortunately, the CAPE system remains far from an ideal system in which all IEEPA duties are immediately and automatically refunded to all importers that paid them. 

First, many importers who paid IEEPA tariffs and many imported goods (“entries”) subjected to IEEPA tariffs are not currently eligible for refunds via CAPE (or any other system). 

• Ineligible importers. As of today, the vast majority of importers that paid IEEPA duties are unable to receive refunds because they don’t meet CAPE’s eligibility criteria. Most notably, only importers with accounts in CBP’s Automated Clearinghouse (ACH)—the electronic payment system through which CBP will deliver refunds—can use CAPE. In an April 14 court filing, CBP said that only 56,497 of the more than 330,000 importers (i.e., 17 percent) have met the ACH requirement. CBP added that eligible importers accounted for 82 percent of all entries subject to IEEPA duties ($127 billion total), indicating that most of the nonregistrants are small businesses that imported low volumes of goods last year (but are still owed refunds!). 

• Ineligible entries. CAPE also doesn’t currently accept many entries on which illegal IEEPA tariffs were paid, even when requested by eligible importers. For example, CBP has not provided a timeline for importers whose entries cannot be processed by “Phase 1” of CAPE or when they will be able to use the system. This includes (1) entries that have been “liquidated” (i.e., assessed a final duty amount and officially closed) for more than 80 days; (2) entries suspended on antidumping or countervailing duty (AD/CVD) orders; and (3) certain other special cases. In a March 31 court filing, CBP estimated that Phase 1 of CAPE would be capable of processing 63 percent of entries subject to IEEPA tariffs—meaning that 37 percent of IEEPA-tariffed entries are currently ineligible for expedited processing. And every day that passes could mean more entries that exceed the 80-day deadline. For entries subject to AD/​CVDs—approximately 166,000, for which importers have paid $2.9 billion in tariffs—CBP claims that the current process requires manual processing, and any resulting refund would include only the principal, meaning more delays and uncertainty for firms (and no interest). 

Second, importers that successfully use CAPE will not get their money back immediately. CBP’s estimated refund timeline for unliquidated entries is 60 to 90 days, while the refund timeline for liquidated entries is unclear. (CBP’s guidance indicates that these entries would be reliquidated within one business day but did not indicate when importers could expect to get their refunds thereafter.) While these timelines are, based on CBP’s filings before the CIT, faster than they would have been without the CAPE system, they are not as fast as they could have been if CBP had (1) prepared for refunds last May (when the CIT first ruled against IEEPA tariffs); (2) voluntarily begun the refund process in February after the Supreme Court made its ruling; and/​or (3) allowed importers with unliquidated entries to simply file a “post-summary correction” eliminating the IEEPA tariff line item (and thus their liability).

The Worrying Unknowns 

Beyond simply culling the list of importers and entries eligible for CAPE, there are two other potential hurdles that will further reduce the IEEPA tariff refund payout. 

First, it’s unclear if all eligible firms will proactively apply for refunds via CAPE, and there are several reasons to think they won’t. News reports show, for example, that many firms are choosing to forgo refunds because it would cost more (in lawyer and broker fees) to apply for them than they’re owed. Other firms have indicated they’re worried that CAPE applications might be a red flag for heightened CBP scrutiny of their paperwork, while others still have avoided publicly seeking refunds out of concern for political blowback or customer lawsuits. With some lawsuits already filed and President Trump openly saying he’ll “remember” firms that don’t request refunds, such concerns are hardly unwarranted. Regardless, any firms that do drop their refund claims will be the direct result of the Trump administration’s choice to place the refund and paperwork burdens on importers instead of where it belongs—on the government.

Second, we don’t yet know how intensely CBP will scrutinize importers’ applications in order to reduce refund amounts owed or reject applications outright. The agency has made clear, for example, that full refunds will not be given in many cases because CBP will consider other Trump tariffs (e.g., Section 232) that would have applied if IEEPA tariffs had never existed. Due to the complex mechanics of tariff-stacking, IEEPA tariffs displaced or exempted other tariffs; now, however, those other tariffs will be applied. CBP has also promised that a strict multistage review process awaits the accepted applications, requiring rigorous compliance and offering quick rejections for any applications that don’t meet the standards (even one incorrect entry). Heavy CBP scrutiny could also lead to recalculated (higher) duty amounts owed, penalties for past paperwork errors, or even customs audits. Given the well-documented chaos of the 2025 tariff schedule, administrative errors are surely higher with IEEPA entries than ones from previous years. Overall, US importers who submit applications expecting full refunds might eventually discover they’re getting much less—and maybe also getting a call from a government auditor.