More than $121 billion in claims and roughly $100 billion paid out, yet the small importers who absorbed the cost of the invalidated IEEPA tariffs say the money is landing everywhere except with them. A refund program built for importers of record is now colliding with class actions, congressional bills and the midterm campaign.
WASHINGTON, Aug. 13, 2026
The largest customs refund operation in the history of the United States passed a symbolic milestone this month, and within days it produced a political fight that the Trump administration did not plan for.
U.S. Customs and Border Protection has now returned roughly $100 billion of the duties collected under the reciprocal tariff program that the Supreme Court invalidated in February, according to court filings cited by CNBC and UPI in reporting published Aug. 5. That figure represents about 60 percent of the estimated $166 billion that customs officials say importers paid under the International Emergency Economic Powers Act before the justices ruled the levies unlawful. Reporting by CPA Practice Advisor on Aug. 10 put total claims filed by importers at $121.75 billion.
The numbers are extraordinary. They are also, according to a growing chorus of small business owners, trade lawyers and members of Congress, being distributed in a way that tracks the paperwork of importing rather than the economics of it.
That distinction has moved from a technical footnote to the center of the story over the past 48 hours. On Aug. 10, U.S. News published an analysis arguing that the refund fight is now heading into the midterm elections. On Aug. 12, The City Reporter in New York documented small businesses across the five boroughs that have seen none of the money despite paying visibly higher landed costs through 2025 and early 2026. The same day, Nuance Matters, a trade newsletter written by Patrick O’Hearn, framed the refunds as a rare piece of good news undercut by a structural flaw, noting that “only the ‘importer of record’ can request a refund, which is causing problems for small businesses that do not directly import products but rather rely on other intermediaries.”
For importers, customs brokers and the trade compliance departments of mid-sized American companies, the practical question is no longer whether refunds are coming. It is who is legally entitled to them, what happens to the roughly $45 billion still outstanding, and whether Congress will intervene before the fiscal year closes.
HOW THE REFUND POOL WAS CREATED
The refunds trace back to February, when the Supreme Court held that the administration’s global reciprocal tariffs had been imposed through an overly expansive reading of the International Emergency Economic Powers Act of 1977. The statute, enacted to give presidents tools to respond to unusual and extraordinary foreign threats, had never before been used to set across-the-board ad valorem duties on ordinary commercial imports from nearly every trading partner.
The decision did not simply switch off the tariffs going forward. It required unwinding entries that had already been liquidated or were in the process of liquidation, an administrative task without a modern precedent at CBP.
According to filings in the U.S. Court of International Trade summarized by Newsweek on Aug. 3, more than 330,000 importers paid the invalidated duties across in excess of 53 million shipments. CBP built a dedicated processing channel, the Consolidated Administration and Processing of Entries tool, to handle the volume. The system, known inside the trade bar as CAPE, launched on April 20, 2026.
The scale of individual recoveries became clear during the second quarter earnings season. Apple disclosed refunds estimated at up to $2.2 billion, which the company credited with helping it post what it described as its strongest June quarter ever. Amazon confirmed approximately $600 million in refunds during the quarter. Ford said it expects about $1.3 billion. General Motors put its figure at roughly $500 million. Nike has said it anticipates close to $1 billion this year from what it called the expected recovery of the IEEPA tariffs. Nintendo recouped about $300 million, according to Supply Chain Dive reporting on Aug. 11.
Those disclosures did two things at once. They demonstrated that the refund machinery works at scale for sophisticated filers. And they made the distributional question impossible to ignore.
THE IMPORTER OF RECORD PROBLEM
Under U.S. customs law, the importer of record is the party legally responsible for the entry, for the accuracy of the declared value and classification, and for payment of duties. That party is the one CBP can refund. It is not necessarily the party that bore the economic burden.
In practice, three patterns dominate.
In the first, a large retailer or brand acts as its own importer of record, pays the duty directly, and either absorbs the cost or passes it into shelf prices. Here the refund flows to the entity that wrote the check, though not necessarily to the customer who paid the higher price.
In the second, a foreign supplier or a logistics provider serves as importer of record on a delivered duty paid basis. The U.S. buyer never appears on the entry. The buyer paid the tariff economically, embedded in the invoice, but has no standing with CBP. Recovery depends entirely on a contractual claim against the intermediary.
In the third, a freight forwarder or customs broker acts as importer of record for a group of small shippers. The refund arrives in the forwarder’s account. Whether and when it reaches the underlying shippers is a matter of commercial goodwill and contract language that, in many cases, was never drafted with a mass refund event in mind.
The second and third patterns are common among small and mid-sized American businesses, which frequently lack the bond capacity, compliance staff and appetite for liability that being importer of record requires. The result is a refund program whose eligibility rules are precisely inverted from the political narrative around it.
“We’re left behind,” is how CPA Practice Advisor headlined its Aug. 10 report on small businesses that do not expect to see the money. The City Reporter, writing on Aug. 12, found that almost none of the $121.75 billion claimed nationally had reached the restaurants and shops that New Yorkers actually patronize.
Trade counsel interviewed by Newsweek were blunt about the arithmetic of what will never come back. “I would anticipate that 10 to 15 percent of the duties collected will not be refunded,” said Joseph Spraragen, an international trade attorney and partner at GDLSK LLP. He pointed to ongoing litigation over finally liquidated entries and to importers who are owed money but have neither filed suit at the Court of International Trade nor submitted administrative claims through the CAPE portal.
Kathleen Claussen, a professor at Georgetown Law and a leading scholar of international trade law, told the same publication that full repayment of the $166 billion was “reasonably unlikely but possible.” Her reasoning was structural rather than political. Not every importer applied. There was no automatic disbursement mechanism. And a meaningful number of firms that paid the duties simply no longer exist, having failed during the tariff period.
CONSUMERS ENTER THE LITIGATION
The refund story has now generated a second layer of litigation, this one aimed at companies rather than the government.
Class action complaints have been filed against retailers and carriers on a theory that trade lawyers have started calling double recovery. The argument is straightforward. If a company itemized a tariff surcharge on a customer invoice, collected that surcharge, and has now received the duty back from CBP, it has been made whole twice.
The strength of these claims varies enormously with the facts. Companies that treated tariffs as an undifferentiated cost of goods sold, folded into a general price increase, present a difficult tracing problem for plaintiffs. Companies that broke out a line item are considerably more exposed.
“Most companies made tariffs a ‘cost of doing business,’ but there were some who took the step of delineating that a portion of the cost of a good was due to tariffs,” Steve Wyett, chief investment strategist at BOK Financial, told Newsweek in April. “In those cases, if consumers still have their receipts, they might have a claim against a company which gets a refund.”
Claussen was more cautious, noting that consumer claims will in many cases be precluded by the legal and mathematical difficulty of establishing whether and to what extent a cost was distributed downstream, and whether the increase can be traced directly to the tariff rather than to freight, currency, input costs or ordinary pricing decisions.
Corporate responses have split along visible lines. Amazon has committed to proactive refunds in a narrow category. Chief Financial Officer Brian Olsavsky said the company had absorbed the duties in most cases but had identified a “limited set of circumstances” where import surcharges were passed to customers. “When we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them,” he said, adding that recovered amounts would also be invested in lower prices.
Costco has signaled a similar posture. “As we’ve done in the past when legal challenges have recovered charges passed on in some form to our members, our commitment will be to find the best way to return this value to our members,” Chief Executive Ron Vachris said on an earnings call in March. FedEx, UPS and Walmart have made comparable statements about passing value back in some form.
Others have declined. Nintendo argued last month that consumers agreed to tariff related price increases at the point of purchase and are therefore not entitled to a share of the rebate. Apple has said it will direct its refund toward domestic investment projects without committing to consumer rebates.
WASHINGTON RESPONDS
Congressional attention has intensified as the refund totals have grown.
Representatives Rosa DeLauro and Frank Mrvan have introduced the Tariff Relief for Consumers Act, which would require any corporation receiving more than $5 million in refunds to pass the money back to consumers for purchases of household essentials. In April, a group of House Democrats sent letters to the chief executives of Walmart, Home Depot, Target, Best Buy, FedEx, Amazon, Lowe’s, Costco, UPS and DHL demanding that they pass refunds to customers rather than, in the language of the letters, pad their bottom line.
Illinois lawmakers have separately pressed for consumer paybacks as the $100 billion threshold was crossed, according to trade coverage published this month.
The politics are unusually favorable for those pushing the issue. Polling from the Pew Research Center in April found tariffs to be broadly unpopular with the American public. A refund program that has returned billions to Apple, Amazon and Ford while delivering nothing to a family owned importer in Queens is a straightforward campaign message, and the U.S. News analysis published Aug. 10 argued explicitly that the fight is now being absorbed into midterm strategy.
Treasury Secretary Scott Bessent has publicly cautioned that consumers should not expect the refunds to reach them, a position consistent with the legal architecture but politically awkward.
INTEREST, LIQUIDATION AND THE QUIET ARITHMETIC
Two technical features of the refund program deserve more attention than they have received, because both materially change the amounts at stake.
The first is interest. The Court of International Trade ordered repayment of the collected duties plus interest, and on sums held for periods ranging from twelve to twenty months, that component is not trivial. For a mid-sized importer that paid $4 million in reciprocal duties across 2025, the interest alone can approach the cost of a full time compliance hire. Yet the interest calculation is applied at the entry level, which means importers who filed consolidated claims without entry level detail may find the accrual understated. Trade counsel have begun advising clients to reconcile CBP’s interest computation against their own entry summaries rather than accepting the disbursement figure at face value.
The second is liquidation. Entries that had finally liquidated before the Supreme Court ruling occupy contested legal ground. CBP’s general position is that finality attaches, and litigation on that question is continuing at the Court of International Trade. This is a significant part of what Spraragen described as the tranche that will never come back. Importers whose 2025 entries liquidated on the ordinary 314 day cycle and who did not file a protest within the statutory window are, in many cases, out of luck regardless of the merits.
Together, interest and liquidation explain much of the distance between the $166 billion headline figure and what will actually be disbursed. They also explain why the refund program has produced such uneven outcomes among firms of similar size. A company with a customs broker who protested aggressively in 2025 is being paid. A company whose broker did nothing is not.
WHAT IT MEANS FOR IMPORTERS AND EXPORTERS
For trade practitioners, the refund episode carries several concrete lessons that will outlast the current news cycle.
The first concerns contracts. Incoterms allocate the duty obligation, but very few commercial agreements written before 2025 addressed what happens if a duty is later refunded. Firms buying on a delivered duty paid basis should assume that, absent express language, the refund belongs to the party on the entry. Purchase agreements, distribution agreements and freight contracts drafted from here forward should include an explicit duty recovery clause specifying who owns any refund, interest or drawback arising from a subsequent judicial or administrative invalidation.
The second concerns the importer of record decision itself. Many small importers cede that role for convenience and to avoid liability. The refund program has demonstrated that the role also carries a call option on any future recovery. That option has now been valued at approximately $166 billion in a single event. Companies with meaningful import volumes should revisit the calculus, weighing bond costs and compliance obligations against the loss of standing to claim.
The third concerns documentation. Firms that itemized tariff surcharges on customer invoices now face litigation risk. Firms that did not itemize face difficulty proving pass through when seeking recovery from an upstream party. There is no costless position, but there is a defensible one, which is contemporaneous internal documentation of how duty costs were treated in pricing decisions. Companies that can show their work are in a materially better position in both directions.
The fourth concerns timing. Spraragen’s estimate that 10 to 15 percent of collected duties will go unrefunded is largely a function of inaction rather than adjudication. Importers who have not filed through CAPE, or who have filed but not supplied banking details, are sitting on claims that will lapse. Reporting cited in early August indicated roughly $1.6 billion remained unprocessed simply because importers had not submitted payment information, with a further $29 billion under review.
Exporters are not spectators here either. Foreign suppliers who acted as importer of record on delivered duty paid terms are receiving refunds on goods whose economic burden fell on American buyers. Those buyers have contractual claims in many cases, and a number are being pursued quietly rather than through litigation. Suppliers seeking to preserve customer relationships in a still volatile tariff environment would be well advised to address the question before it is raised for them.
THE BROADER FISCAL PICTURE
The refunds also interact with a tariff program that has been rebuilt since February. After the Supreme Court decision, the administration imposed temporary duties under Section 122 of the Trade Act of 1974, which carry a 150 day statutory limit. Those expired on July 24, the same day new Section 301 tariffs of 10 percent and 12.5 percent took effect against 60 trading partners on forced labor grounds.
That means importers are, in many cases, receiving refunds for one set of duties while paying a new set on the same goods. The cash flow effect is meaningfully different from the headline. A firm receiving a refund of duties paid in mid 2025 while absorbing a 12.5 percent Section 301 rate today is not being made whole in any economic sense. It is being reimbursed for a past cost while carrying a present one.
The Section 301 program is itself under challenge. A coalition of 25 states filed suit in the Court of International Trade on Aug. 3, arguing that the forced labor rationale is a pretext for reinstating the invalidated tariffs. Two businesses, spice importer Burlap and Barrel and watch retailer Collective Horology, filed the first challenge on July 24. If those suits succeed, the United States could face a second refund event of comparable magnitude, and the same importer of record problem would arise again.
That prospect is precisely why trade counsel are urging clients to fix their contracts now rather than after the fact.
WHAT TO WATCH
Three markers will determine how this story develops through the autumn.
The first is the pace of disbursement on the remaining balance. If CBP clears the roughly $45 billion gap between claims filed and money paid before the fiscal year ends, the administration will have a defensible administrative record. If the outstanding amount stalls near current levels, congressional hearings become considerably more likely.
The second is the first substantive ruling in the consumer class actions. A decision on a motion to dismiss in any of the leading cases will indicate whether the double recovery theory has legs or whether tracing problems dispose of it early.
The third is the fate of the Tariff Relief for Consumers Act and similar proposals. Passage is unlikely in the current Congress, but the bill functions as a marker, and its treatment in committee will signal how far the refund issue travels into the campaign.
For now, the ledger reads as follows. Roughly $166 billion collected. Roughly $121.75 billion claimed. Roughly $100 billion returned. And a widening gap between the parties named on the customs entries and the parties who actually paid.