It’s Refund Season: Phase One of the Tariff Refunds Has Begun
May 21, 2026
It’s that time of year again—refund season. More specifically, it is tariff refund season, as Phase One distributions related to duties under the International Emergency Economic Powers Act (IEEPA) begin to flow back to importers. Following the Supreme Court’s landmark ruling striking down the Trump administration’s use of the IEEPA to unilaterally impose import tariffs, eligible importers are moving to recover paid or deposited duties.1 Trade data indicates approximately $164.7 billion of IEEPA duties were imposed prior to the ruling.2
Before checking the mailbox, it is important to note that refunds are payable only to the importer of record.3 Impacted importers must submit refund claims through an administrative process—via electronic entries through CBP’s CAPE* module in the Automated Commercial Environment (ACE), timely Form 19 protests or other remedies—each subject to eligibility, validation and liquidation requirements.4 At a high level, this Phase One rollout aims to function as a streamlined system (CAPE) to consolidate the submission and processing of refund claims on certain entries, such as claims on entries that are unliquidated and/or within approximately 80 days of liquidation.5 The CBP notes that the more complex cases will be addressed in subsequent phases.
To better understand the progression of the IEEPA tariff recovery efforts, it may be helpful to review the trade timeline that led to this point. Beginning in February 2025, the Trump administration issued executive orders imposing emergency tariffs under IEEPA on imports from China, Mexico and Canada.6 On April 2, 2025, “Liberation Day,’’ baseline universal tariffs were introduced, shortly followed by higher country-specific reciprocal tariffs on over 57 countries.7 Tariff activity accelerated throughout 2025, with over 50 modifications to the U.S. tariff code.8 IEEPA import duties continued to accumulate, the scale of which is highlighted in today’s Chart of the Week. That was the case until Feb. 20, 2026, in a six-to-three decision, the Supreme Court ruled the executive branch cannot pass sweeping tariffs without explicit congressional approval.9 Note that this ruling applies narrowly to IEEPA as other tariffs are in place.
So where does that leave the refunds? On March 4, the U.S. Court of International Trade issued a broad refund mandate for all IEEPA duties, prompting CBP to rapidly deploy the automated CAPE system and framework to manage the anticipated volume of refunds. According to court disclosures, CBP reports that over 330,000 importers paid or deposited IEEPA duties across more than 53 million distinct entries, establishing a historical baseline pool of roughly $166 billion.10
Early processing has been underway, with tens of thousands of claims validated and an initial Phase One payout of approximately $35.5 billion, with payments beginning to reach early filers in mid-May.11
Key Takeaway
Moving forward, it will be interesting to watch how fast CBP clears the queue of potential claims and whether importers can successfully navigate the validation process in a timely manner. Given the scale and speed of this multi-billion-dollar payout, it will also be important to assess whether these refunds provide meaningful relief to affected industries, influence company-level financials or have a broader impact on economic activity.
*U.S. Customs and Border Protection’s (CBP) Consolidated Administration and Processing of Entries (CAPE)
Sources:
1,2Penn Wharton Budget Model – Supreme Court Tariff Ruling: IEEPA Revenue and Potential Refunds; 2/20/26
3,4Baker Tilly – IEEPA FAQ: Tariff refund rules, eligibility and filing steps; 4/8/26
5U.S. Customs and Border Protection – International Emergency Economic Powers Act (IEEPA) Duty Refunds; 5/20/26
6White and Case – President Trump Imposes 25% Tariffs on Canada and Mexico, and 10% Tariffs on China; 2/2/25
7Michigan Journal of Economics – “Liberation Day”: Impacts on Global Trade a Year Later; 5/11/26
8Cato at Liberty Blog – The US Tariff System Has Gotten Even More Complex—and the Supreme Court Won't Fix It; 1/9/26
9Thomson Reuters – Supreme Court tariff ruling in Learning Resources, Inc. v. Trump: What corporate tax and trade teams need to know; 2/20/26
10White & Williams – IEEPA Tariff Refunds: CBP Launches CAPE Process; 4/27/26
11Flexport – The Supreme Court’s IEEPA Tariff Ruling: Next Steps, Potential Refunds, and Guidance for Businesses; 5/12/26
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