Tax Insights: US Court of International Trade order affects IEEPA tariff refunds ─ What businesses need to know

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Issue 2026-11

In brief

What happened? 

On March 4, 2026, the US Court of International Trade (CIT) issued an order directing the US Customs and Border Protection (CBP) agency to liquidate and, where applicable, reliquidate entries without applying any tariffs that had been imposed under the US International Emergency Economic Powers Act (IEEPA). The order follows the US Supreme Court’s February 20, 2026 decision in Learning Resources, Inc. v. Trump, which concluded that IEEPA does not authorize the President to impose tariffs.¹

Subsequently, CBP outlined its efforts to comply with the order. CBP intends to develop new functionality within its Automated Commercial Environment (ACE) platform to support an importer‑based process for addressing IEEPA tariff refunds, which would be implemented in phases.

Why is it relevant?

While the US Supreme Court invalidated IEEPA as a tariff authority, it did not prescribe how previously collected IEEPA tariffs should be addressed. The CIT’s order provides direction to CBP so that they can start creating a process to refund these tariffs. Although the US Administration is expected to appeal the order, it is not yet known whether it will do so.

Actions to consider

Businesses affected by IEEPA tariffs should take proactive steps by analyzing their import records and engaging with their brokers to gather the necessary documentation, regardless of who was the Importer of Record (IOR). They need to consider the broader impacts of IEEPA refunds on tax, transfer pricing, financial statements and contracts, and adopt a coordinated approach across departments.

In detail

US Court of International Trade decision

In Atmus Filtration, Inc. v. United States, the CIT directed CBP to:

• liquidate any unliquidated entries subject to IEEPA tariffs without applying those tariffs, and
• reliquidate entries that have liquidated but are not yet final, also without applying IEEPA tariffs

The CIT stated that importers of record whose entries were subject to IEEPA tariffs are all entitled to benefit from the US Supreme Court’s ruling. The CIT also discussed its jurisdiction and intention to uniformly administer these import‑related disputes.

The CIT order is expected to be appealed by the US Administration. Also, after CBP outlined its proposed automated refund approach, the CIT paused the requirement in its order for immediate refunds of IEEPA tariffs.

How CBP plans to process IEEPA tariff refunds

In a declaration filed on March 12, 2026, CBP outlined the development of a new ACE capability known as the Consolidated Administration and Processing of Entries (CAPE) to support an importer/broker submission and processing model for IEEPA refund requests.

CBP described CAPE as consisting of four integrated components:

• Claim portal (approx. 70% complete) – for submitting and validating refund requests   
• Mass processing (approx. 40% complete) – for removing IEEPA-specific HTS numbers and recalculating tariffs as if IEEPA tariffs had never been declared
• Review and liquidation/reliquidation (approx. 80% complete)
• Refund (approx. 60% complete) – includes consolidation and electronic payments to a designated account

Once the IOR files a claim identifying the entries that were subject to IEEPA tariffs, CAPE is expected to support CBP’s processing of those claims by recalculating and liquidating or reliquidating those entries and issuing a refund electronically.

CBP also indicated that the CAPE would be implemented in phases, with certain categories of entries potentially requiring additional handling.

What businesses need to consider

Businesses with historical exposure to IEEPA tariffs should:

• determine which of their entries may be affected (e.g. unliquidated versus liquidated but not yet final), as described in the CIT order
• ascertain whether they have access to the ACE portal to make refund requests and are successfully enrolled in CBP’s Automated Clearinghouse (ACH) program, as CBP only issues eligible refunds electronically using ACH
• assess potential refund eligibility for IEEPA tariffs paid, including when a customs broker or courier acted as the IOR, noting that refunds are issued to the IOR
• establish a monitoring framework to provide visibility of when to expect refunds (and what that amount will be)
• contemplate how CBP’s evolving, system‑driven approach (CAPE/ACE functionality) might influence administrative timing and processing
• consider potential cross‑functional impacts, including cash flow, financial reporting and tax or transfer pricing considerations, as the refund process develops

Businesses should also stay informed by monitoring ongoing developments, including any updated guidance from CBP.

The takeaway

The CIT’s March 4, 2026 order directs CBP to liquidate and, where applicable, reliquidate certain entries without applying IEEPA tariffs, providing judicial direction on the treatment of affected entries following the US Supreme Court’s decision that IEEPA does not authorize tariffs.

CBP has described a phased approach to administering IEEPA tariff refunds that introduces new functionality within ACE (i.e. CAPE). Ongoing legal and administrative developments, such as the anticipated appeal of the order and the CIT’s decision to pause immediate refund requirements in response to CBP’s proposed approach, are expected.

Companies that begin assessing relevant data and governance considerations now may be better positioned to respond as the CAPE process is implemented, and additional guidance becomes available.

We can support your company in evaluating IEEPA tariff refund considerations across different import models and organizational structures. Our support includes:

• evaluating potential refund beneficiary considerations based on economic burden and transaction structure
• supporting coordination with brokers, couriers and other intermediaries to obtain and review available entry data
• estimating potential IEEPA tariff exposure across entities, import models and service providers
• aligning customs considerations with broader tax, transfer pricing, finance and legal perspectives