Tariff Refunds Are Flowing, but Uncertainty Remains for Importers
For many companies that paid tariffs under the International Emergency Economic Powers Act (IEEPA), the question is no longer whether refunds are possible.
The question is whether it’s worth the trouble: “Some importers are a little cautious about it and might choose not to seek refunds. And there are a few reasons for that,” says Jonathan Todd, J.D., MBA, co-lead of transportation and logistics law at Benesch, a national law firm based in Cleveland.
“Some are concerned about customers arguing that if companies receive refunds, they have to pass those on. Others are concerned about talk from the (Trump) administration about how those that do not seek refunds may be viewed more favorably. So, there are several things a company has to factor on whether it chooses to pursue them.”
Importers are increasingly using U.S. Customs and Border Protection’s (CBP) Customs Automated Processing Environment (CAPE) system to seek refunds of IEEPA duties paid before they were struck down by the U.S. Supreme Court in February. At least $US20 billion in refunds has already been issued.
Despite that progress, ongoing litigation and recent government filings continue to create uncertainty over whether all refunds will be available through administrative channels, or whether some importers will ultimately need to sue to recover the full amount they paid.
“The launch of the CAPE system this year was a welcome sign to many because it signaled that an administrative process would be available and may indeed work,” Todd says.
Most importers are pursuing refunds through CAPE rather than the courts, he says: “If they believe they overpaid and if the monies are available, they’re going to seek them.”
An Administrative Path Is Largely Preferred
The appeal of CAPE is straightforward. The process is less expensive, less visible and generally easier to navigate than litigation.
Companies can complete filings themselves or by using customs brokers or outside counsel. For organizations already juggling tariff compliance, sourcing changes and evolving trade policies, an administrative remedy is viewed as the best first step.
Todd says many importers are taking a wait-and-see approach before deciding whether to file lawsuits. “The advantage of CAPE is it is administrative,” he says. “It’s far less costly than a lawsuit, and it doesn't have the same public visibility as a lawsuit.”
The system is operating under a phased rollout; some Phase 1 refunds have already been processed. Phase 2, which would address reconciliation entries, launches on June 29, with Phase 3 targeted for late July.
The phase dates are largely settled. The legal questions, not so much.
While CBP continues building an administrative refund process, the federal government has simultaneously maintained that litigation may be required for certain refund claims.
“The government is both building a process to deliver everything and also saying they don't want to deliver everything,” Todd says. “They believe that importers have to file a lawsuit to get every dollar.”
Recent government filings reinforce that position, particularly regarding older IEEPA duties that are considered finally liquidated. Those entries are not currently eligible for recovery through CAPE and would likely fall into a Phase 3 process.
As a result, importers are watching two parallel developments unfold: the expansion of the administrative refund process and ongoing litigation over the government’s refund obligations. Todd expects most companies to continue pursuing the lower-cost administrative route while monitoring developments over the summer.
Time is on the side of importers: The statute of limitations for filing claims in the U.S. Court of International Trade is generally two years. For companies that paid IEEPA tariffs beginning in February 2025, that means a filing deadline of February 2027.
New Questions for Supply Chain Leaders
The refund issue extends beyond customs compliance and legal strategy. It is also creating new commercial and contractual questions throughout supply chains.
Some companies have expressed concerns about potential claims from suppliers, customers or even consumers arguing that tariff refunds should be shared. Several consumer class-action lawsuits have already been filed, asserting that companies should seek refunds and pass those savings along.
He is skeptical that such claims will ultimately succeed. “These are companies that complied with the law,” Todd says. “The IEEPA tariffs were the law. You had to pay those to get goods into the country. There was no fraud or deception.”
Still, the possibility of disputes is prompting organizations to revisit contractual language and commercial relationships.
On the B2B side, companies are increasingly discussing how future tariff costs — and potential future refunds — should be handled. Rather than treating tariff recovery as a one-time event, many organizations are building flexibility into purchase and sale agreements to address future trade-policy changes.
“Companies recognize that this is going to be our experience for the foreseeable future,” Todd said.
That means preparing for both outcomes: additional tariff costs and potential tariff refunds. There is also the backdrop of continued trade-policy changes.
The Section 122 tariffs enacted by the Trump administration after the IEEPA duties were struck down, will expire on July 24, unless extended by Congress. The Supreme Court recently declined to hear a case challenging Section 301 tariffs on Chinese imports enacted in 2018, and the White House recently proposed similar duties on 60 nations.
Meanwhile, customs enforcement is becoming more aggressive. Todd cites a recent White House executive order focused on customs enforcement and the Department of Justice’s Trade Fraud Task Force as indicators that compliance scrutiny is likely to increase.
For supply management organizations, that means balancing cost management, supplier relationships and compliance obligations. “Maintaining awareness remains the No. 2 challenge, second to understanding what the costs will be,” Todd says. “compliance will always be an issue, and enforcement is ramping up.”
The environment remains fluid, he adds, but many companies have become more adept at responding to change after navigating the tariff disruptions of 2025.
What Companies Should Do Now
For organizations that paid IEEPA tariffs but have yet to act, Todd recommends starting with data collection.
Companies should gather records — available internally and through customs brokers — showing what duties were paid and when. Once that information is confirmed, organizations can evaluate whether to pursue administrative recovery through CAPE, litigation or both.
“The No. 1 first step if someone wakes up and wants to file for refunds is to begin gathering data, begin having conversations with their customs brokers and maybe lawyers,” Todd says.
As Phases 2 and 3 approach, importers are expected to gain greater clarity on whether CBP expands the CAPE process to cover all IEEPA duties. Until then, companies remain caught between an administrative system that is producing refunds and a legal landscape that continues to evolve.