On February 20, 2026, in Learning Resources, Inc. v. Trump, the United States Supreme Court invalidated the “Liberation Day” and fentanyl-related tariffs enacted by President Trump under the authority provided by the International Emergency Economic Powers Act (IEEPA), which had traditionally been used to freeze assets and impose economic sanctions. While the administration argued the tariffs were a vital response to “unusual and extraordinary” threats facing the country, including the influx of illegal drugs and persistent trade deficits, the Court ruled that IEEPA does not authorize the president to impose tariffs. Tariffs, the Court held, operate on domestic importers to raise revenue and are thus a form of taxation reserved for Congress.
Shortly after the Supreme Court’s decision in Learning Resources, the Court of Appeals for the Federal Circuit declined to stay the refund process and allowed the Court of International Trade to begin establishing formal refund procedures for all importers of record who paid duties implemented under IEEPA.
In total, approximately $166 billion in IEEPA tariffs were collected. As of June 29, 2026, approximately $104 billion in refunds have been accepted for processing in the Consolidated Administration and Processing of Entries (CAPE) system, which was established by United States Customs and Border Protection (CBP). Of that total, approximately $71 billion in refunds have been sent to the United States Department of Treasury for disbursement.
IEEPA Tariff Refund Process and Liquidation
On March 5, 2026, the Court of International Trade ordered CBP to begin the refund process immediately. A little over a month later, CAPE was established by CBP, and it began processing eligible refund requests. The Court of International Trade’s ordering of refunds has resulted in CBP rolling out the refund process in three phases, with each phase largely dependent on the liquidation status of the entry for which a refund was sought.
Liquidation of duties is the formal process of computing duties, fees, and taxes owed on an entry. When goods are first imported, CBP collects estimated duties, fees, and taxes with amounts dependent on factors that include the declared classification, value, country of origin, and applicable tariff rate—this occurs pre-liquidation. During liquidation, the total may fluctuate or it may stay the same. Liquidation starts the clock on the importer of record’s right to challenge any duty assessed. The liquidation process averages 314 days from entry to liquidation; however, liquidation may be completed sooner in actuality. Once an entry has been liquidated, the importer of record has 180 days to file a protest with CBP and challenge the duty calculation. Once the 180-day period expires, the liquidation becomes final.
Additionally, there is a two-year statute of limitations to bring an action before the Court of International Trade for refund claims. However, there is uncertainty as to when that period begins to run, specifically, whether the clock starts from the date of the Supreme Court’s decision in Learning Resources, the date the duties were paid, or the date of liquidation.
IEEPA Tariff Refund Phase Rollout
Phase I of the CBP’s refund process was rolled out on April 20, 2026, and included unliquidated or recently liquidated entries, which generally involve those within the period in which CBP could reliquidate or otherwise correct the entry (up to 80 days after the liquidation date). Notably, Phase I did not include entries that had become finally liquidated long before the refund process began. CBP estimated that Phase I has now addressed over 60 percent of all refund-eligible entries, leaving more difficult claims for subsequent phases.
Phase II, which began on June 29, 2026, covers entries that the filer originally marked for reconciliation, as long as the final reconciliation entry has not yet been filed. Entries flagged for reconciliation are entries that were knowingly filed with the best available, albeit incomplete, information. These might include, for example, an entry of goods whose value is unknown, or an entry where duties were paid at the time of entry, then it is later determined the goods for which the duties were paid are eligible for relief from tariffs under a free trade agreement. A final reconciliation entry is then filed when the completed information becomes available. These entries flagged for reconciliation must also be filed in CAPE. However, entries flagged for reconciliation for which a final reconciliation entry has already been filed may not be entered into the system. As of June 30, 2026, approximately 1.6 million entries flagged for reconciliation have been successfully filed in CAPE.
Combined, Phases I and II are expected to address approximately $130 billion of the approximately $166 billion in IEEPA tariffs collected.
Phase III of the refund process has not yet been scheduled; however, it is expected to address the more legally complex category of finally liquidated entries—those for which liquidation has become final and the protest period has expired. Importantly, at a June 9 hearing before the Court of International Trade, CBP indicated that only those importers of record who have filed protective actions to recover refunds before the Court of International Trade will have their refunds processed.
Additional Eligibility Requirements for Tariff Refund Claims
There are several technical requirements across the IEEPA tariff refund process that must be satisfied for an entry to qualify as eligible for a refund. Foremost, only the importer of record or an authorized customs broker with an established Automated Commercial Environment (ACE) account may file, and all filings must have an active ACH US bank account that is explicitly set up for refunds. Once filed, the entry will be updated to a new version in CAPE, a refund will be calculated (if applicable), and the tariff line will be removed.
Outstanding Issues
While CBP has actively issued refunds throughout the Phase I process, it remains to be seen whether all “eligible” refunds will continue to be issued. For example, in early June 2026, the Department of Justice filed an emergency appeal seeking to avoid future refunds by arguing that the Court of International Trade lacks the requisite jurisdiction to issue a universal order for all liquidated entries. Instead, they argue, it only possesses jurisdiction to issue refunds for those affected parties that have filed lawsuits.
Additional Tariffs
The IEEPA tariffs are not the only tariffs enacted by the Trump administration, nor are they the only tariffs ruled illegal. In addition to the IEEPA tariffs, President Trump enacted tariffs under § 122 of the Trade Act of 1974, which apply universally and are set to expire July 24, 2026; under § 232 of the Trade Expansion Act of 1962, targeting steel, automobiles, semiconductors, and other products; and under § 301 of the Trade Act of 1974, which take aim at countries engaging in unfair trade practices. On May 7, 2026, the Court of International Trade invalidated the § 122 tariffs and permanently enjoined the government from further collecting such tariffs. However, the permanent injunction granted by the court extends only to the specific parties engaged in the litigation.
Barclay Damon will continue to provide updates on this and all tariff-related litigation in the US Court of Appeals for the Federal Circuit and Court of International Trade as well as the litigation’s impact on the tariff refund process.