Tax Insight

US Court of International Trade issues order related to IEEPA duty refunds

Insight
2 minute read
March 06, 2026

What happened?

On March 4, 2026, the US Court of International Trade (CIT) issued an order that appears to direct US Customs and Border Protection (CBP) to issue refunds of tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The order directs CBP to:

Liquidate any unliquidated entries subject to IEEPA duties without applying those duties; and
Reliquidate entries that have liquidated but are not yet final, removing the IEEPA duties.

The CIT order follows the US Supreme Court’s February 20, 2026 decision concluding that IEEPA does not authorize the imposition of tariffs (see PwC’s February 25 Tax Insight for more details). The CIT further stated that importers whose entries were subject to IEEPA duties are entitled to the benefit of the Supreme Court’s ruling.

While the order suggests that refunds may be processed through an automated mechanism, it is also expected to be subject to appeal. 

Note: In a March 6, 2026 declaration filed with the CIT, CBP stated its proposal to develop new Automated Customs Environment (ACE) functionality to implement an automated, importer-based refund process for IEEPA duties (including interest), which it expects to be ready within approximately 45 days; the court subsequently paused the order requiring immediate refunds.

Why is it relevant?

While the Supreme Court invalidated IEEPA as a tariff authority, it did not prescribe how previously collected IEEPA duties should be addressed. The CIT’s order appears to provide direction to CBP regarding unliquidated entries and liquidated entries that are not yet final.

The scope of relief for finally liquidated entries, administrative timing, and potential further judicial developments remain important considerations. Companies may have cash flow, financial reporting, and tax implications as the refund process develops.

Actions to consider

Impacted companies should consider taking proactive steps now to analyze their data and develop a coordinated refund strategy addressing both direct and indirect recovery opportunities. Considerations include:

Customs: Leverage US Customs Automated Customs Environment (ACE) data to quantify 2025–2026 tariffs paid, segment liquidated vs. unliquidated entries, and develop a data model capturing supplier, Harmonized Tariff Schedule classification, related-party status, and payment information to assess eligibility and timing.
Finance / Accounting: Evaluate the gross vs. net refund impact, including whether tariffs were shared with suppliers or passed through to customers. Assess financial reporting implications, including inventory and fixed asset capitalization and the appropriate timing for receivable recognition.
Tax / Transfer pricing: Analyze where the economic benefit of any refund should reside under existing transfer pricing policies, potential cost of goods sold and true-up adjustments, related- vs. third-party distinctions, and potential effective tax rate implications across tax years.

PwC will continue to closely monitor developments and publish additional Tax Insights as information becomes available.