Court of International Trade Endorses Customs’ Proposed Process for Tariff Refunds

Importers’ prospects for obtaining refunds on improperly collected tariffs are becoming clearer. Following the Supreme Court’s decision in Learning Resources Inc. v. Trump, which invalidated President Trump’s tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) (see link), a major unresolved question was the timing and mechanism for refunds of tariffs paid over the course of the past year. The Court’s opinion did not resolve this question, leaving it for the Court of International Trade (“CIT”) to resolve on remand. Last week, that process began to come into focus with a series of rulings in related cases before the CIT.

While the Government’s litigation positions may change, the upshot for importers is that U.S. Customs and Border Protection (“CBP”) has outlined a process it plans to develop in the next 45 days that will enable importers to obtain refunds for IEEPA duties. Importers will submit a declaration through CBP’s Automated Commercial Environment (“ACE”) that identifies a list of entries for which the importer paid IEEPA duties, which would then facilitate refunds on those entries using a new technical functionality that CBP intends to develop within ACE.

Overview

In litigation occurring in the CIT while the Supreme Court was still reviewing Learning Resources Inc., the CIT concluded that the United States would be judicially estopped from contesting the availability of refunds in the event that the Supreme Court affirmed the lower courts and found that the President lacked the authority to impose tariffs under IEEPA. The Government had previously represented to the CIT that such refunds would be available, including interest.

In a related case before the CIT after the mandate was issued from the Supreme Court’s decision, the CIT requested more information from the Government about how it intended to comply with the Supreme Court’s decision and how it intended to process refunds. In response, the Government submitted a Declaration in which it proposed a path forward on issuing refunds by creating a new functionality in ACE that would allow importers to submit a list of all the entries for which they paid IEEPA duties, which would then allow the Government to verify the submission and issue refunds.

Specifically, the Government suggested that this new process—which it said could launch in ACE within 45 days—would consist of the following steps:

• The importer files a declaration in ACE that includes a list of entries on which IEEPA duties were paid.
• ACE runs a series of validations on each entry within the declaration and automatically re-calculates the duty owed without the IEEPA tariffs (with applicable interest).
• CBP verifies the declaration and processes refunds as soon as practicable.
• ACE automatically finalizes (liquidates or reliquidates) the entries.
• ACE automatically aggregates the refunds with interest by importer and liquidation date.
• CBP certifies the refunds.
• The Department of the Treasury issues IEEPA refunds electronically.

The CIT subsequently issued an order which seems to endorse the CBP proposal and which asked CBP to update the court on its progress by March 12. While this situation is still evolving, the CIT’s apparent acceptance of the CBP proposal suggests that, in the short term at least and barring any further action by the courts, that process will go forward.

Implications

• As CBP is implementing the new process, importers who paid IEEPA tariffs may find it worthwhile to conduct a self-assessment of their eligibility for a refund. The tariffs were in effect for more than a year (February 4, 2025 to February 24, 2026). Depending on the country of origin, some of the duty rates were quite high. Thus, while refunds are limited to IEEPA duties (and will not apply to duties under other trade authorities, such as Section 301), the refunds could be significant. As CBP stated in its submission to the CIT, as of March 4, 2026, the total amount of IEEPA duties and estimated duty deposits collected pursuant to IEEPA is approximately $166 billion.
• In terms of whether litigation is warranted, it remains to be seen whether importers that currently have pending refund lawsuits before the CIT will be in a better position to obtain refunds through this new process than those that have not pursued litigation. The announced process would seem to apply to all importers with access to ACE, but importers should continue to monitor these developments as this process is implemented.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Greta L. Nightingale, an O’Melveny partner licensed to practice law in the District of Columbia; David J. Ribner, an O’Melveny partner licensed to practice law in the District of Columbia and New York; and Alexander N. Ely, an O’Melveny counsel licensed to practice law in the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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