Seven months after the Supreme Court struck down the IEEPA tariffs, more than 100 billion dollars has flowed back to US importers, but small businesses, government appeals and a wall of class actions leave tens of billions in limbo
WASHINGTON, September 14, 2026
The largest tax refund operation in American history is now well past its hundred billion dollar mark, and it is still nowhere near finished. US Customs and Border Protection has authorized more than 128 billion dollars in refunds of tariffs collected under the International Emergency Economic Powers Act and has disbursed more than 100 billion dollars to importers, according to the agency’s most recent public accounting. Yet as the money moves, a second story has taken shape alongside the first: a legal and administrative fight over who gets the rest, when they get it, and whether the smallest businesses that paid the unlawful duties will ever be made whole.
The refunds trace to February 20, 2026, when the Supreme Court ruled 6 to 3 in Learning Resources, Inc. v. Trump that IEEPA, the 1977 emergency powers statute, does not authorize the president to impose tariffs. The Court held that the statute’s grant of authority to regulate importation does not include the power to tax it, reasoning that the imposition of tariffs is very clearly a branch of the taxing power that Article I of the Constitution reserves to Congress. The decision invalidated both categories of IEEPA duties: the targeted fentanyl tariffs on imports from Canada, Mexico and China, and the sweeping reciprocal tariffs that had applied to dozens of countries worldwide.
The sums involved are without precedent. Importers paid roughly 166 billion dollars in IEEPA duties before interest over the tariffs’ lifespan, from the first fentanyl orders of early 2025 through the global reciprocal schedules that followed. Law firm analyses published in the days after the ruling, including client alerts from WilmerHale, Holland and Knight and Norton Rose Fulbright, estimated that the decision could unlock on the order of 175 billion dollars once statutory interest was counted, and warned that the mechanics of returning that money would become one of the defining trade law questions of the decade. So it has proved.
How the money is moving
The Court said little about remedies, leaving the mechanics of repayment to the Court of International Trade, which promptly ordered CBP to refund the duties to the importers of record that paid them. CBP asked for 45 days to build a process and delivered the Consolidated Administration and Processing of Entries system, known as CAPE, inside its Automated Commercial Environment. CAPE launched on April 20 and allowed importers to file bulk refund declarations rather than pursuing entry-by-entry claims, a design that the National Retail Federation credited with making an unprecedented task administrable. Once a declaration is accepted, CBP has said, a refund can still take 60 to 90 days to issue, and the agency reserves the right to offset amounts where it finds problems with classification, origin or suspected transshipment.
Progress since then has been substantial but uneven. A July 1 status report to the Court of International Trade, analyzed in detail by Scott Lincicome, Alfredo Carrillo Obregon and Chad Smitson of the Cato Institute, showed that as of June 29 CBP had authorized 104.29 billion dollars in refunds and paid out 71.06 billion dollars including interest. By Cato’s calculations the government at that point still owed importers roughly 100 billion dollars more, better than half of its total obligation once interest was counted. Since then the pace has quickened. CBP has rolled out Phase 2 of CAPE, covering entries flagged for reconciliation, and the authorized total has climbed past 128 billion dollars. Cato has separately estimated that the government’s delay itself is expensive, with interest on the unpaid balance accruing at a pace its analysts put at roughly 20 million dollars a day for taxpayers.
For businesses on the receiving end, the checks are consequential. Retailers, manufacturers and farmers paid the duties at the port months before goods reached shelves, absorbing the cash flow hit up front. Jonathan Gold, the National Retail Federation’s vice president for supply chain and customs policy, wrote that refunding the illegal tariffs to the businesses that paid them is pro-worker, pro-customer and pro-growth, and that retailers would deploy the recovered funds across their businesses, their workforces and their customers. The delivery giants UPS, FedEx and DHL, which paid IEEPA duties on behalf of customers as brokers, have each committed to pass refunds through on a rolling basis and have set up dedicated customer portals to do it.
The small business problem
Beneath the headline totals sits a distributional problem that the refund process has not solved. CBP’s own data show that the approved refunds, nearly 60 percent of the government’s total obligation by value, covered only about 30 percent of the import entries on which IEEPA tariffs were paid. In other words, the money has moved fastest on large, high value entries. Judge Richard Eaton of the Court of International Trade, who has overseen the refund process, has noted that most refunds have thus far gone to large importers such as Walmart and Ford, while many smaller firms have been unable to navigate the CAPE process at all. CBP has acknowledged that refunds for more than 8,000 approved declarations were held up for reasons as mundane as missing automated clearinghouse banking information.
The Cato analysts put the point bluntly: the deck is stacked against small firms that lack the resources to fight for and obtain what the government owes them. Their warning echoes months of anecdotal reporting, including a National Public Radio diary of a small business owner’s attempt to pry a refund out of the system, that portrays a process built for sophisticated filers with customs brokers and trade counsel on retainer, not for the hundreds of thousands of small importers who paid the duties in the first place. The National Retail Federation notes that small businesses make up 98 percent of American retailers and support more than 13 million jobs, which is why the distribution of the refunds, and not just their total, has become a political question.
The appeal that could strand billions
The sharpest legal flashpoint concerns entries that have been finally liquidated, meaning more than 180 days have passed since CBP made its final determination of duties owed. Those entries, covering about 11.4 billion dollars or roughly 7 percent of total IEEPA revenue, are not eligible for the first two phases of CAPE. CBP has indicated it could process them in a Phase 3, but on June 2 the Department of Justice filed a notice of appeal to the US Court of Appeals for the Federal Circuit challenging the Court of International Trade’s universal refund order, arguing that CBP cannot lawfully refund finally liquidated entries unless each importer of record first files suit at the trade court.
Importers have responded with a preemptive move toward class action litigation at the Court of International Trade designed to satisfy that requirement in one stroke, and the government is contesting that approach as well. Law firms tracking the dispute, including Jackson Walker and Sidley Austin, have advised affected clients to preserve their claims now, warning that the appeal could leave a class of importers, collectively owed tens of billions of dollars, unable to recover without individual lawsuits. Cato’s assessment is that the government’s litigation posture could allow it to keep tens of billions of dollars that it unlawfully collected from US importers through no fault of their own.
Beyond the liquidation fight, CBP’s filings suggest the agency still owes roughly 25 billion dollars in refunds for entries outside the first three phases altogether, including entries tangled in antidumping and countervailing duty proceedings, entries with active drawback claims or administrative protests, and entries filed outside the agency’s electronic portal. No timeline has been published for those categories, and practitioners regard them as the long tail that will keep customs lawyers busy into 2027 and beyond.
Class actions turn refunds into liability
While importers chase the government for refunds, a parallel wave of litigation is chasing the importers. More than 80 consumer class action lawsuits have been filed against importers and retailers across the country, advancing the theory that companies which raised prices to cover IEEPA tariffs and later recovered those tariffs from the government should disgorge the benefit to their customers. The Court of International Trade’s refund order directed money to importers of record, and the question of consumer reimbursement was never part of the ruling, as the National Retail Federation has emphasized. But plaintiffs’ lawyers are testing state consumer protection and unjust enrichment theories, and defense practices at firms including Troutman Pepper Locke have warned clients to document how tariff costs and refunds actually flowed through their pricing.
A secondary market in refund rights has grown up alongside the litigation. Sidley Austin published guidance this spring for lenders, borrowers and claims purchasers on the treatment of IEEPA refund claims as collateral and as tradable assets, and Troutman Pepper Locke has described an active market in which financially stretched importers sell their expected refunds at a discount for immediate cash. The refunds, in other words, have become a financial asset class, with everything that implies: valuation disputes, diligence requirements and the risk that the Federal Circuit appeal reprices an entire category of claims overnight.
The accounting and tax treatment of refunds has generated its own cottage industry of advisory opinions, with companies weighing whether recoveries are current income, prior period adjustments or something else, and how interest components should be booked. The NRF has described the proliferation of conflicting guidance as adding chaos and confusion to a process that was supposed to be straightforward restitution.
A refund with a rebate: the new tariffs
The refunds are also colliding with the administration’s replacement tariff architecture. Within weeks of the Supreme Court ruling, the White House imposed a temporary 10 percent global import surcharge under Section 122 of the Trade Act of 1974, a balance of payments authority that requires no investigation. The Office of the US Trade Representative simultaneously launched Section 301 investigations into structural excess capacity, covering 16 countries, and into forced labor practices, covering 60 countries. The forced labor track produced double digit tariffs in late July, at 10 percent for countries that have committed to forced labor import bans and 12.5 percent for those without, covering 99.4 percent of US import value. Administration officials have said openly that the Section 301 programs are designed to replace the invalidated IEEPA duties on a sounder legal footing.
For importers, the practical effect is circular: money refunded for the old tariffs is being consumed by the new ones. Trade compliance publications reported this month that companies are getting creative with the refund flows, using recovered duties to prepay new tariff liabilities, fund inventory front-loading ahead of announced effective dates, and finance the customs compliance infrastructure that the new regimes demand. Some finance teams describe the refunds as a one-time dividend from the courts that is being reinvested, dollar for dollar, in surviving the next phase of the trade war.
What importers should do now
Practitioners’ advice has converged on a checklist. Importers that have not filed CAPE declarations should do so immediately, and should verify that banking details in CBP’s systems are current, since missing payment information remains a leading cause of stalled disbursements. Companies with finally liquidated entries should track the Federal Circuit appeal closely and consider whether to join the pending class action effort or file protective suits of their own. Businesses facing consumer class actions should assemble contemporaneous evidence of pricing decisions. And every importer should treat the refund as working capital for a trade environment that remains, by any historical standard, extraordinarily turbulent.
Seven months on, the scoreboard is genuinely mixed. A hundred billion dollars returned is an administrative achievement without precedent in customs history, and the Supreme Court’s ruling stands as the most significant judicial check on executive trade power in generations. But the unfinished remainder, concentrated among the smallest and least resourced importers and the most procedurally tangled entries, will determine whether the episode is remembered as full restitution or as a partial one. The riddle of the refunds, who ultimately keeps the money the government should never have collected, is still being solved in courtrooms on both sides of Federal Plaza.