More than 120 billion dollars in unlawful tariff collections are working their way back to American importers, but an appeals court fight and a wall of filing deadlines could decide who actually gets paid
WASHINGTON, August 4, 2026. Nearly six months after the Supreme Court declared the administration’s emergency tariffs unlawful, the largest duty refund operation in American history has entered its most consequential stretch. US Customs and Border Protection has accepted more than 121 billion dollars in refund claims into its new processing system and moved more than 86 billion dollars of that total to the Treasury for disbursement, according to figures the agency reported in mid-July. Yet as August opens, the question of who is legally entitled to that money remains before a federal appeals court, a class of importers faces rolling filing deadlines that can extinguish their claims, and an entire category of entries still has no refund mechanism at all.
For importers, this week carries real stakes. Entries that liquidated in early February, when the refund saga began, are approaching the 180-day protest deadline that trade lawyers describe as the single most important date in the process. Miss it, and an importer’s path to recovering duties on those entries may close permanently, regardless of how the litigation ends.
How Washington Came to Owe Importers 121 Billion Dollars
The story begins with the tariffs President Trump imposed across 2025 under the International Emergency Economic Powers Act: the so-called reciprocal tariffs on most of the world, the fentanyl-related duties on China, Canada, and Mexico, and country-specific measures against Brazil, India, and others. On February 20, 2026, the Supreme Court ruled 6 to 3 in Learning Resources v. Trump, in an opinion by Chief Justice Roberts, that IEEPA contains no textual authority to impose tariffs at all. The decision affirmed the Federal Circuit’s August 2025 ruling and remanded the case to the Court of International Trade to sort out remedies.
The White House moved the same day, issuing an executive order ending collection of the IEEPA-based duties while leaving Section 232 sectoral tariffs, Section 301 tariffs, and the de minimis suspension untouched. Within days the administration had invoked Section 122 of the Trade Act to impose a temporary 10 percent global surcharge, since replaced by Section 301 forced labor tariffs on 60 economies. The tariff wall, in other words, never came down. But the money already collected under IEEPA, an amount the government’s own filings now put well north of 100 billion dollars, became a legal liability the moment the Court ruled.
The Court of International Trade wasted little time defining that liability broadly. On March 4, the court ordered CBP to liquidate pending entries without IEEPA duties and to reliquidate entries not yet final. On March 30, Judge Richard Eaton went further, issuing an amended order directing that all entries subject to IEEPA duties, including fully liquidated ones, must be reliquidated without those duties. “It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties,” Eaton wrote, in a line that has anchored every importer brief filed since.
The Machinery: CAPE and Its Limits
CBP’s answer to the logistical nightmare of unwinding tens of millions of entries is a purpose-built system called CAPE, the Consolidated Administration and Processing of Entries, which went live in the agency’s ACE portal on April 20. Phase 1 allowed importers to file refund declarations, in batches of up to 9,999 entries per submission, for unliquidated entries and entries within 80 days of liquidation. The first refund wave was certified and sent to Treasury on May 5, with payments flowing the following week. Within the program’s first six weeks, CBP had processed refund claims on nearly 8.5 million entries.
Phase 2, which CBP confirmed in late June and formally launched at the start of July, expanded eligibility to entries flagged for reconciliation, specifically entry types 01, 02, and 06 where the corresponding reconciliation entry had not yet been filed. Once CBP accepts those flagged entries on a CAPE declaration, the agency strips the IEEPA duties before the importer files its reconciliation. Trade advisors at OIA Global and the customs bar have urged importers with previously excluded reconciliation entries to review their records, since additional refunds may now be available.
The numbers have grown quickly. In early June, CBP told the court that about 85 billion dollars in refunds had been accepted and about 20.6 billion dollars sent to Treasury. By July 13, according to figures reported by Sourcing Journal, roughly 121.75 billion dollars in potential and certified refunds had been accepted into CAPE processing, and approximately 86.3 billion dollars, including duties and interest, had been transmitted to Treasury for disbursement.
The machinery has friction points. Thousands of approved refunds have stalled because importers’ ACH refund account information is missing from CBP’s systems, a mundane administrative gap that is quietly delaying real money. And one hole remains structural: there is still no mechanism for entries that liquidated more than 80 days before filing and are considered final. For those entries, the protest process and the outcome of the pending appeal are everything.
Liquidation, Explained
The battle lines in the litigation trace directly to a piece of customs mechanics that most businesses never think about: liquidation. When goods enter the United States, the importer deposits estimated duties, but the entry remains legally open, often for months, while CBP finalizes classification, valuation, and duty calculation. Liquidation is the moment the government’s assessment becomes final. After liquidation, an importer has 180 days to protest; after that window closes, the assessment is generally conclusive against everyone, importer and government alike.
Finality is the hinge on which the government’s whole appellate argument swings. For unliquidated entries, nobody disputes that CBP can simply recalculate without the unlawful duties; that is what CAPE Phase 1 and Phase 2 do. The fight is over the enormous population of entries that liquidated with IEEPA duties baked in and passed beyond the protest window before their owners acted. Judge Eaton’s March 30 order swept those entries in, directing reliquidation of everything. The government contends that liquidated, unprotested entries are final as a matter of statute, and that the CIT cannot conjure a universal remedy that Congress never provided.
There is precedent on both sides of the question, and the trade bar has been trading citations all summer. Importers point to the principle that the government cannot keep money it collected without legal authority, and to cases where courts fashioned broad restitution for unlawful exactions. The government leans on the customs statute’s strict finality scheme, which courts have historically treated as jurisdictional, and on separation-of-powers concerns about a single trade court ordering nine-figure disbursements to parties not before it. Veterans of the Harbor Maintenance Tax litigation of the 1990s, the closest historical analogue, recall that unwinding an unconstitutional levy on exporters took years of follow-on litigation and produced a refund regime considerably narrower than the initial rulings promised.
The Appeal That Hangs Over Everything
On June 2, the administration told the Court of International Trade that it would appeal the refund order to the US Court of Appeals for the Federal Circuit, and the Justice Department filed its notices of appeal the following day. The government’s argument is narrow but consequential: it contends the CIT lacked authority to order across-the-board refunds to all importers, including those who never filed suit, and that CBP cannot lawfully recalculate finally liquidated entries without importer-specific court orders. On the government’s theory, only importers who sued, or who preserved their claims through timely protests, are entitled to their money back.
At a hearing on June 9, Justice Department lawyers pressed the point that the CIT erred in ordering refunds to non-plaintiffs, while Judge Eaton had earlier demanded that CBP’s commissioner personally confirm whether the government intended to return all unlawfully collected duties. CBP, for its part, has told the court it intends to keep processing refunds in a phased approach for businesses that filed legal complaints, while asserting it lacks both the technical ability and the legal authority to recalculate liquidated entries en masse without individual orders.
The Federal Circuit’s answer will determine the fate of billions of dollars held by importers who never went to court. It is worth noting that the same appeals court has already shaped this saga twice, ruling against the IEEPA tariffs in August 2025 and, separately, upholding the replacement Section 122 surcharge in June of this year. Briefing has continued through the summer, and the trade bar expects argument in the fall, with a decision that could arrive around the one-year anniversary of the Supreme Court ruling it implements.
The uncertainty has spawned a secondary industry. Refund claim buyers have emerged to purchase importers’ pending claims at a discount, offering cash now in exchange for the litigation risk. Retail analysts report class action activity as well, with customers of large importers arguing that companies that passed tariff costs through in 2025 prices should pass refunds through too, a theory that Sourcing Journal reports has retailers’ counsel watching the refund flows closely.
Winners, Losers, and the Cash Flow in Between
The refund flows are already large enough to register in corporate earnings. Retailers and consumer goods companies that imported heavily during the IEEPA period have begun disclosing expected recoveries in securities filings, and several large importers booked material one-time gains in second quarter results as CAPE payments landed. Equity analysts covering the retail sector now routinely ask about refund pipelines on earnings calls, and the gap between companies that papered their claims early and those that did not is showing up in real dollars.
The distributional pattern favors scale. Large importers had the customs counsel, the entry data systems, and the balance sheets to file suits and protests within weeks of the Supreme Court ruling. Small and mid-size importers, who often rely entirely on their customs brokers and may not track liquidation dates at all, are systematically more exposed to the deadline wall and more likely to hold finally liquidated entries with no preserved claim. Brokers and trade associations have mounted outreach campaigns through the summer, but practitioners estimate that a meaningful share of eligible refunds belonging to smaller companies will simply never be claimed.
Interest sweetens the recoveries for those who do collect. Refunds carry statutory interest from the date of deposit, calculated at rates that have been historically elevated through the relevant period. On duties paid in early 2025 and refunded in mid-2026, interest can add several percent to the recovery, real money at the scale of these flows and a growing line item in the government’s total exposure.
Then there is the question of who, ultimately, should see the money. The class action bar has noticed that many importers raised consumer prices in 2025 while attributing the increases to tariffs, and suits are testing theories that refunded duties unjustly enrich companies that already passed the cost through. Sourcing Journal reports that plaintiffs’ lawyers have begun organizing customer claims against large importers even as those importers await their CAPE disbursements. Most defense counsel consider the theories a stretch under existing consumer protection law, but the litigation adds one more contingency to a refund process already thick with them, and it has made some retailers cautious about how prominently they tout recoveries to investors.
The Deadline Wall
While the appeal proceeds, the customs bar has converged on a single piece of advice: protect yourself with protests. Under the customs statute, an importer generally has 180 days from liquidation to file a protest challenging the duties assessed. Because the government’s appeal specifically targets refunds for importers who did not sue, a timely protest may be the difference between a legally preserved claim and a discretionary one if the Federal Circuit narrows the CIT’s order.
The arithmetic of the deadline is unforgiving. Entries that liquidated with IEEPA duties in late January and early February, in the final weeks before the Supreme Court ruling, are hitting their 180-day protest deadlines now, in early August. Every week that passes closes the window on another tranche of entries. Advisors including OIA Global recommend that importers file protests on all Phase 2 and finally liquidated entries before the 180-day limit expires, warning that failing to do so could jeopardize any ability to recover the duties, and that it remains unclear whether the government will continue honoring Phase 1 claims from companies that never filed suit if the appeal goes its way.
The practical checklist circulating among trade compliance teams this week is short but urgent. Confirm ACH refund account setup with CBP so approved refunds are not stranded. Pull liquidation reports and calendar the 180-day protest deadline for every IEEPA-affected entry. File CAPE declarations for all eligible unliquidated and reconciliation-flagged entries. File protests, in batches where possible, on everything else. And document the tariff costs embedded in 2025 pricing, both for potential recovery and against the possibility of downstream claims.
Three Ways the Federal Circuit Could Rule
Appellate handicappers sketch three broad outcomes. The first affirms the CIT in full: universal reliquidation, refunds to all importers of record regardless of whether they sued or protested. That outcome maximizes restitution and administrative simplicity, since CBP would process every entry the same way, but it requires the Federal Circuit to hold that the customs finality statute yields when the underlying exaction was wholly unauthorized, the most aggressive of the available holdings.
The second reverses in part, limiting mandatory refunds to plaintiffs and importers with timely protests while leaving the government discretion to pay others. This is the outcome the deadline wall anticipates, and it is why the customs bar has been so insistent about protests: under a partial reversal, a two-dollar filing made this week could be worth the entirety of an importer’s claim next year. In this scenario, the tens of billions of dollars already disbursed through CAPE would almost certainly stay where they landed, since clawing back paid refunds is practically and politically implausible, but unpaid claims from non-litigants would move to the back of a much longer line.
The third possibility is a remand with instructions, sending the case back to the CIT to construct a more tailored remedial process, potentially including a claims administration procedure resembling a bankruptcy or class settlement. Some observers see hints that the Federal Circuit may prefer this middle path, which would trade speed for durability and push final resolution well into 2027. Each additional year matters: claims age, records scatter, companies dissolve or change hands, and the practical gap between legal entitlement and actual recovery widens.
However the panel rules, few expect it to have the last word. The losing side will seek Supreme Court review, and the justices, having created this remedial problem with their February merits ruling, may feel some obligation to finish the job. A second trip to the high court would put final certainty somewhere in late 2027, nearly three years after the first unlawful dollar was collected.
What the Fight Is Really About
Beneath the procedural weeds, the refund battle is testing a foundational question: when the government collects money under a law the Supreme Court later says never authorized the collection, does everyone get their money back, or only those who fought? The CIT’s answer was everyone. The administration’s answer is narrower, shaped by both fiscal exposure and institutional caution about courts ordering the Treasury to disgorge more than 100 billion dollars.
The fiscal stakes cut in both directions. The refunds, plus statutory interest, represent a real drain at a moment when tariff revenue has become a meaningful line in federal receipts, and when the administration has rebuilt the tariff wall under new authorities partly to keep that revenue flowing. For importers, the refunds are not a windfall but restitution, money paid under protest across eighteen months of whipsawing trade policy, often financed at high interest rates and passed incompletely into prices.
For the broader trading community, the episode has become a masterclass in legal self-defense. The companies best positioned today are those that filed suits or protests early, kept meticulous entry records, and set up their refund plumbing before the rush. The lesson is being absorbed in real time, because the new tariff programs that replaced IEEPA, from the Section 122 surcharge to the forced labor Section 301 duties to the Section 338 measures taking effect this month, are already drawing legal challenges of their own. Importers who lived through the IEEPA unwinding are treating every duty payment as potentially refundable, and papering their files accordingly.
There is also an institutional stake that will outlast this administration and the next. The credibility of the customs system rests on a simple bargain: importers pay what the law requires, promptly and without litigation, because they trust that unlawful collections will be returned. If the ultimate lesson of the IEEPA episode is that only the litigious get made whole, that bargain frays, and every future duty dispute begins with a lawsuit rather than a deposit. Judges on the CIT have alluded to exactly this concern in open court, and it may prove the quiet force that pushes the appellate courts toward a broader remedy than the government wants.
The Federal Circuit will have the next word, likely this fall. Until then, the refund operation grinds on, the deadlines keep arriving, and 121 billion dollars sits in varying states of limbo between the Treasury and the importers who paid it. For the importers watching their protest calendars this week, the advice from every corner of the trade bar is identical: assume nothing, file everything, and let the courts sort out the rest.