Customs and Border Protection tells the Court of International Trade it has returned 100 billion dollars of invalidated emergency-powers duties, but the hardest 11.4 billion dollars remains frozen behind a Justice Department appeal
WASHINGTON, August 8, 2026
United States Customs and Border Protection has paid out 100 billion dollars in refunds of tariffs collected under the International Emergency Economic Powers Act, according to a filing made Tuesday with the Court of International Trade and reported Friday by Supply Chain Dive. The disclosure, made by CBP official Brandon Lord in the docket of Freestyle World, Inc. v. United States of America, marks the largest single milestone in what has become the biggest customs refund operation in American history.
The figure represents payments against 128.68 billion dollars in refund claims that CBP has accepted through the dedicated portal it launched in April. The administration’s total obligation, following the Supreme Court’s February 20 decision that the emergency powers statute does not authorize tariffs, is approximately 166 billion dollars. On that basis the agency has now cleared roughly 60 percent of the money it collected under the measures the Court struck down.
The milestone is genuine progress. It is also incomplete in ways that matter a great deal to a specific and unlucky category of importers, and the reasons for that incompleteness are now the subject of active appellate litigation.
How the refund obligation arose
The refunds trace to Learning Resources, Inc. v. Trump and the consolidated appeal in Trump v. V.O.S. Selections, Inc., decided by the Supreme Court on February 20, 2026. In a 6 to 3 ruling, the Court held that the International Emergency Economic Powers Act does not confer authority on the President to impose tariffs. The decision affirmed an en banc ruling of the Court of Appeals for the Federal Circuit from August 2025, which had in turn affirmed a Court of International Trade judgment from May 2025.
The practical effect, as summarized by multiple firms advising importers, was that the tariffs imposed under the statute were invalid from inception rather than merely invalid going forward. That distinction is what created a refund obligation rather than simply a prospective repeal. Duties lawfully assessed and collected under a valid statute are ordinarily not recoverable once entries liquidate. Duties collected under a statute that never authorized them are a different matter.
The mechanics of unwinding them, however, ran directly into the architecture of American customs administration. On March 4, the Court of International Trade ordered CBP to liquidate certain unliquidated entries without applying the invalidated duties and to reliquidate entries that were not yet final. Two days later, CBP informed the court that it was not yet able to process refunds and estimated it needed roughly 45 days to develop the necessary functionality within the Automated Commercial Environment.
The CAPE portal and its expanding perimeter
That functionality became the Consolidated Administration and Processing of Entries system, known as CAPE, operating inside the ACE Secure Data Portal. Phase 1 went live on April 20, allowing importers of record and licensed customs brokers to file refund requests directly by uploading comma-separated value files listing affected entries. ACE validates the entries, recalculates duties without the invalidated tariffs, aggregates the refund and accrued interest, and forwards payment instructions to the Treasury. Valid claims are generally paid within 60 to 90 days of acceptance of the CAPE declaration unless a compliance question requires further review.
Phase 1 carried an 80-day filing deadline, and importers who missed it for entries that had already liquidated have no route back in. That gap has persisted through every subsequent expansion.
Phase 2 launched on July 7, extending eligibility to certain reconciliation-flagged entries, meaning shipments where final duty calculations were still pending. A related capability went live June 29 permitting CAPE to accept entries awaiting reconciliation of final tariff calculations. Lord confirmed in Tuesday’s filing that 2.2 million submissions have been filed since that feature opened, a volume that gives some sense of the administrative scale involved.
What CBP has still not delivered is the capability to process finally liquidated entries. The agency had indicated the functionality might launch by the end of July. That deadline passed without action. The category is not trivial: Supply Chain Dive reports it covers roughly 11.4 billion dollars, or about 6.9 percent of the total invalidated tariff collections.
The Justice Department appeal
The obstacle appears to be legal rather than technical. The Department of Justice filed an appeal in June contesting a Court of International Trade order that had directed CBP to include all entries in the refund process, including those that had finally liquidated. The government’s position, as characterized by Supply Chain Dive, is that the court lacks jurisdiction to order CBP to refund finally liquidated entries.
The argument turns on the doctrine of finality in customs law. Liquidation is the point at which CBP fixes the final amount of duties owed on an entry, and once liquidation becomes final it is ordinarily conclusive on both the importer and the government absent a timely protest. The government contends that this finality survives even a determination that the underlying tariff authority was invalid, and that the exclusive route for challenging a liquidated entry is the protest procedure under the customs statutes, filed within 180 days of liquidation.
The importer-side position is that a tariff imposed without statutory authority cannot be insulated from correction by an administrative timing rule, particularly where the invalidity was established by the Supreme Court after most of the relevant liquidations had already occurred.
Practitioners have been unambiguous about what importers should do while that question remains open. Advisories from customs brokers and trade counsel have urged importers to file protective protests within 180 days of liquidation regardless of whether they believe CAPE will eventually cover their entries. OIA Global, in guidance to clients, warned that failing to file a protest within 180 days of the liquidation date could jeopardize the ability to recover any paid duties, and recommended importers confirm their Automated Clearing House refund accounts are properly configured with CBP so that payments are not delayed once approved.
What companies are doing with the money
The refunds are large enough to be visible in corporate financial reporting, and the range of uses is instructive about how tariff costs were absorbed in the first place.
Amazon reported last week that it had received 600 million dollars in reimbursements, according to Supply Chain Dive. Amazon and Costco have both indicated they will pass some portion of refunds to customers. Walmart has tied expected refunds to its pricing strategy amid broader cost pressure. BJ’s Wholesale Club has used refund proceeds to cut prices. E.l.f. Beauty expects 585 million dollars in refunds and has said the money will fund price reductions. O’Reilly Automotive and its suppliers are sharing the benefit of refunds between them, an arrangement that reflects how tariff costs had been split along that supply chain in the first place.
The most economically revealing development is the emergence of a secondary market. Retailers seeking immediate liquidity have sold the economic rights to their pending refund claims at a discount, with buyers taking on the timing and legal risk. According to Retail Dive and Supply Chain Dive reporting on that market, claims traded at 30 to 40 cents on the dollar before the Supreme Court ruled, implying a 60 to 70 percent discount, and moved to around 60 cents on the dollar after the decision and the establishment of the CAPE process.
Two named transactions illustrate the terms. American Eagle Outfitters applied for roughly 190 million dollars in refunds and anticipates a net cash benefit of about 140 million dollars. The Children’s Place sold an aggregate 38.2 million dollars of refund claims to Alnus Investors for a total purchase price of approximately 25.7 million dollars, a discount of just over 32 percent.
That pricing is a market judgment on the risk that remains. A claim trading at 60 cents on the dollar in a process where valid claims are paid within 90 days is not primarily a discount for time value. It is a discount for the possibility that the claim is in a category the government will successfully fence off.
The economics of a 166 billion dollar reversal
The refund programme is, in aggregate, one of the largest fiscal transfers to the private sector in recent American history, and its macroeconomic footprint is not negligible. One hundred billion dollars returned to importers in roughly three and a half months represents a meaningful injection of working capital into sectors, principally retail, consumer goods, automotive parts and industrial distribution, that had been absorbing tariff costs through some combination of margin compression, price increases and inventory rationing since 2025.
The pass-through pattern is worth noting for what it says about the original incidence of the duties. Companies choosing to cut prices with refund proceeds, as BJ’s, E.l.f. and others have done, are implicitly acknowledging that the tariffs had been passed to consumers. Companies retaining the cash are implicitly acknowledging that they had absorbed the cost. Companies selling claims at a discount are signalling that liquidity constraints outweigh the value of the full claim, which tends to indicate the tariffs had done real balance sheet damage.
There is a countervailing fiscal effect that has received little attention. The refunds include accrued interest, and the government is returning revenue it has already spent. The reversal therefore widens the deficit by more than the collected amount, and it does so in a period when the administration has been replacing invalidated tariff revenue with new duties imposed under different authorities.
The replacement tariffs and their own legal exposure
That replacement effort is the reason this story is not simply a retrospective accounting exercise. Following the February decision, the administration imposed a 10 percent near-global tariff under Section 122 of the Trade Act of 1974, a statute that permits temporary import surcharges to address balance of payments deficits and that carries a statutory time limit. Those tariffs expired on July 24.
To fill the gap, the United States Trade Representative on July 23 imposed Section 301 duties of 10 to 12.5 percent on 60 economies, based on findings that each had failed to adopt and effectively enforce prohibitions on the importation of goods produced with forced labor. Partners that committed to adopt and enforce such prohibitions received the 10 percent rate; those that had not received 12.5 percent. For jurisdictions with most-favored-nation rates, including the European Union, Japan and South Korea, the new duty is assessed net of the MFN rate. The affected economies account for 99.4 percent of United States imports.
Both replacement measures are now in litigation. Multiple suits have been filed in the Court of International Trade against the expired Section 122 tariffs, and on August 3 a coalition of 25 states filed suit against the Section 301 forced labor duties. That action, co-led by the attorneys general of Arizona, California and Oregon, alleges that the duties exceed the administration’s statutory authority and violate the Administrative Procedure Act. The states argue that USTR completed 60 country investigations in roughly two and a half months, bypassed the country-specific consultations the statute requires, and set rates without explaining how they would reduce forced labor practices. Their filing contends that the tariffs are not genuinely aimed at forced labor but are an attempt to recreate duties already held unlawful.
The European Union has publicly rejected the forced labor findings while noting that the rate structure is consistent with the bilateral framework agreed at Turnberry. Brazil, facing 12.5 percent under the forced labor action on top of a separate 25 percent Section 301 duty on most of its goods, called the decision arbitrary and unjustified and has initiated WTO consultations.
Implications for importers
For importers, three practical conclusions follow from Friday’s filing.
The first is procedural. If an entry has finally liquidated and the 80-day Phase 1 window has closed, CAPE currently offers no route to recovery, and the only preserved avenue is a protest filed within 180 days of liquidation. Importers who have not audited their entry files against liquidation dates should treat that as urgent. The 11.4 billion dollars sitting behind the Justice Department appeal will not be released quickly, and when it is released the government is likely to insist that only protested entries qualify.
The second is operational. Importers should verify that ACH refund enrolment with CBP is current. Refunds approved against an unconfigured or stale account create avoidable delay, and in a programme processing millions of submissions there is no realistic expectation of individualised follow-up.
The third is strategic, and it concerns the tariffs now in force rather than those already refunded. The IEEPA episode establishes that a tariff can be collected for well over a year and then reversed in full, with interest. That is a precedent importers can plan around. Companies paying Section 301 forced labor duties or Section 122 residuals should be documenting those payments with the same discipline they now wish they had applied in 2025: entry-level records of duty paid by authority, liquidation date tracking, and protest calendars. The 25-state lawsuit may fail. It may also succeed, and the importers who recover fastest will be the ones whose records were built for that possibility from the start.
There is a fourth point, less a recommendation than an observation. The administration’s post-February pivot to Section 232 and Section 301 reflects a deliberate move onto legal ground that has already been tested. Section 232 has survived repeated constitutional challenge over six decades. Section 301, whatever the procedural objections raised by the states, is a statute Congress wrote specifically to authorize retaliatory tariffs. Importers hoping that the IEEPA outcome portends a general judicial unwinding of American tariff policy should read the pivot carefully. The refund cheques arriving now are for a measure the government has already abandoned. The duties it is defending are the ones built to last.
The administrative achievement, fairly stated
It is worth pausing on the operational side of this, because criticism of the pace has been constant and the underlying accomplishment is real.
CBP was ordered in early March to unwind duties on entries spanning more than a year of import activity across effectively every importer of record in the country. The agency had no existing mechanism for a refund of this type at this scale. Ordinary refund routes in customs administration, principally protest and post summary correction, are designed for individual entries handled case by case, not for a systematic reversal touching hundreds of millions of lines.
The agency built CAPE and opened it 47 days after telling the court it needed roughly 45. It has since accepted 128.68 billion dollars in claims and paid 100 billion dollars of them. The 2.2 million submissions filed since June 29 against the reconciliation feature alone give a sense of throughput. Whatever the merits of the underlying tariffs, the refund machinery has functioned better than the March filings suggested it would.
The limitation is not primarily technical. It is that the agency is refusing to build a capability for a category of entries whose legal status the Justice Department is actively contesting, which from an administrative standpoint is a defensible sequencing decision even though it leaves 11.4 billion dollars stranded and thousands of importers without recourse.
CBP has separately tightened the surrounding post-entry framework. Effective August 5, the agency updated its post summary correction procedures, revising eligibility rules for when a correction may be filed, changing how corrections interact with protests and liquidations, expanding validation and automation inside the Automated Commercial Environment, and introducing new processing logic intended to reduce conflicting post-entry filings. For importers running parallel refund and correction workstreams, those changes are consequential and were published with limited fanfare.
What the secondary market is really pricing
The discount at which refund claims trade is the most honest available estimate of legal risk in this dispute, and it deserves a closer reading than the headline number invites.
A claim that is unambiguously within CAPE Phase 1 or Phase 2 scope, filed on time, against an unliquidated or reconciliation-flagged entry, carries very little residual risk. Payment arrives within 60 to 90 days. A rational buyer of that claim discounts only for time value and administrative friction, which at prevailing rates would imply pricing in the low to mid nineties on the dollar.
Claims trading at 60 cents are therefore not the clean ones. The discount is consistent with a portfolio containing a meaningful proportion of finally liquidated entries, entries where the Phase 1 deadline was missed, entries with compliance flags likely to trigger CBP review, or entries where the importer of record documentation is imperfect. The Children’s Place transaction, at roughly 68 cents on the dollar, and American Eagle’s expectation of 140 million dollars net against 190 million dollars applied for, at roughly 74 percent, sit at the cleaner end of that range.
For chief financial officers, that pricing has a practical use. If a bank or specialty investor will buy a claim portfolio at 60 cents, that is an external mark on the recoverability of the same asset sitting on the balance sheet. Companies carrying refund receivables at full face value while comparable claims trade at a third off should expect auditor attention.
The macroeconomic footprint
One hundred billion dollars returned over roughly fifteen weeks is a large number in any framing. Set against annual United States goods imports, it represents something close to two percent of the value of a typical year’s inbound trade being handed back to the firms that paid it.
The distributional consequence is concentrated. Tariff incidence during the emergency-powers period fell heaviest on high-import-intensity, low-margin sectors: general merchandise retail, apparel, footwear, consumer electronics accessories, automotive aftermarket parts, furniture and housewares. Those are precisely the sectors now reporting material refunds, and several of them entered 2026 with strained balance sheets after two years of absorbing duties they could only partially pass through.
The visible uses of the money confirm that reading. E.l.f. Beauty’s 585 million dollars is very large relative to the company’s size, and its decision to direct the funds to price reductions is a statement that the tariffs had been sitting in consumer prices. BJ’s Wholesale Club made the same choice. Amazon and Costco are passing some portion to customers. Walmart has folded the expected refunds into pricing strategy without committing to a pass-through. O’Reilly Automotive is splitting the benefit with suppliers, which reveals that the original tariff cost had itself been split.
The firms selling claims at a discount tell the opposite story. Choosing to accept 60 or 68 cents on a claim that would pay in full within a year is a liquidity decision, and it indicates that the tariff period did balance sheet damage severe enough that immediate cash outweighed a third of the recovery. That is not a sign of a system that absorbed the duties comfortably.
There is a fiscal counterpart that has attracted less commentary. The refunds carry accrued interest, so the government is returning more than it collected, and it is doing so from revenue already spent. The reversal therefore widens the deficit by more than the 166 billion dollar principal, at a moment when the administration is simultaneously standing up replacement duties whose own legal durability is contested.