Billions in tariff refunds are coming, but who gets paid depends on a largely invisible supply-chain decision: who acted as the importer of record.
The Supreme Court struck down the International Emergency Economic Powers Act (IEEPA) tariffs in February. The U.S. Customs and Border Protection (CBP), the agency responsible for tariff refunds, is beginning to clarify eligibility requirements. Eligibility depends on how imports were structured and companies that were not the importer of record may be locked out.
The government is expected to refund up to $175 billion in tariff collections with interest.
Refunds will be processed by revisiting each import entry, removing the now illegal tariffs, and issuing repayments. Refunds apply only to the overturned IEEPA tariffs. All standard tariffs are still in effect.
The CBP estimates that it will take roughly 45 days from when an entry is added to the system and when the refund is delivered, and entries liquidated within roughly the past 80 days may still be eligible for adjustment, according to a filing with the Court of International Trade. As of March 27, the Court of International Trade also issued an order to expand the potential refund pool to include finally liquidated entries.
Still, these refunds are not automatic, and companies must file a claim to initiate the process.
“One misconception is that CBP will just send companies a refund of the IEEPA duties without a claim being submitted,” Erik D. Smithweiss, partner at Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP, said.
Refund eligibility is tied to the specific legal role: the importer of record. Many manufacturers never hold that role.
Companies that purchased goods under Delivered Duty Paid (DDP) terms, or relied on distributors that handled imports, outsourced customs handling entirely. That simplified procurement, but also transferred ownership of the import.
These companies will not be able to file claims directly unless the importer of record files a form for the manufacturer to receive the refund on their behalf.
As of March 26, over 26,600 importers of record have filed for a refund.
A manufacturer importing components through a distributor under DDP may have paid millions in embedded tariffs. Because the distributor was the importer of record, the manufacturer cannot file a claim and may never see that money.
For companies whose import entries have already been finalized by the CBP, the refund process will be even more complex. “This is an issue that may need to be litigated,” Smithweiss predicts.
Some manufacturers may need to file protective cases in the U.S. Court of International Trade as legal placeholders that preserve their eligibility before deadlines expire.
Today, companies are still responsible for paying a 10% tariff on a majority of imported products under the Trade Expansion Act. Anti-dumping and countervailing duties also remain in place, along with Section 301 tariffs on Chinese imports ranging from roughly 7.5% to 25% and Section 232 tariffs on steel and aluminum.
It’s not clear when the CBP’s refund system will be ready, but the agency has released initial details.
CBP is developing its four-step Consolidated Administration and Processing of Entries (CAPE) system. Companies will need to register in the Automated Commercial Environment (ACE), the digital portal used to process claims. The process will include claim submission, mass processing, review and liquidation or reliquidation, and refund delivery.
“The biggest issue right now is timing,” partner at Benesch Friedlander Coplan & Aronoff LLP,
Jonathan R. Todd said. “No one knows exactly what will be required and when.”
The refund process will likely reshape how companies structure import operations.
More manufacturers may move to become importers of record to retain control over duties and refunds. Disputes may also emerge between manufacturers and suppliers over who is entitled to recover past tariffs, particularly in cases where duties were embedded in pricing but controlled by distributors.
In the near term, companies must determine whether they have the legal standing and documentation to file claims, and whether past import structures prevent them from recovering funds at all.
