Seven months after the Supreme Court struck down the IEEPA tariffs, more than $128 billion in refund claims are moving through Customs, a Wall Street market in refund rights is booming, and a Federal Circuit appeal could still upend it all
By the US Trade Desk, Peacock Tariff Consulting
WASHINGTON, September 11, 2026
The largest tariff refund operation in American history is now running at full throttle, and it is reshaping corporate balance sheets, customs compliance departments, and even a corner of Wall Street. Seven months after the Supreme Court ruled that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, US Customs and Border Protection is processing refund claims on a scale the agency has never attempted, with more than $128 billion in potential and certified refunds accepted for processing by midsummer and payments flowing to importers’ bank accounts through the agency’s new electronic machinery.
The refunds trace to the Court’s February 20 decision, a 6 to 3 ruling delivered by Chief Justice John Roberts in Learning Resources v. Trump. The majority held that although IEEPA permits the president to regulate importation during a declared national emergency, that language does not clearly authorize the imposition of tariffs, because the Constitution assigns the power to lay duties to Congress and measures of such vast economic and political significance require clear congressional authorization. With that, the sweeping country-based duties that had anchored the administration’s trade program were invalid, and every dollar collected under them became a potential government liability.
The scale of that liability is extraordinary. The Penn Wharton Budget Model projected that reversing the IEEPA tariffs could generate up to $175 billion in refunds, a sum that dwarfs any previous customs remediation and that has turned the mechanics of repayment into a story of its own.
CAPE: The Machinery of a $100-Billion-Plus Payout
CBP’s answer to the operational challenge is a new system called the Consolidated Administration and Processing of Entries, or CAPE, built inside the Automated Commercial Environment portal that importers and brokers already use. Rather than forcing companies to file entry-by-entry protests or manual refund requests, CAPE centralizes the process: importers submit declarations identifying their affected entries, CBP validates the claims against its own records, and approved refunds are transmitted to Treasury for electronic payment through the Automated Clearing House network.
The rollout has proceeded in phases. Phase 1 opened on April 20 and covered the most straightforward category of claims. Phase 2 opened on June 29, adding entries flagged for reconciliation where no reconciliation entry had yet been filed. Phase 3, which CBP told the Court of International Trade in June was on track for late July, addresses the hardest category: entries that have already been finally liquidated, a pool estimated at roughly $11.4 billion whose eligibility the government continues to contest on appeal.
The volume statistics tell the story of an agency improvising at scale. By July 31, importers had submitted more than 75,000 CAPE declarations, and CBP indicated that approximately $128.68 billion in potential and certified refunds had been accepted for processing. The agency has said valid refunds are generally issued within 60 to 90 days of a declaration’s acceptance, absent compliance concerns requiring further review, and ACH payments began issuing as early as May 12.
But the pipeline is not frictionless. CBP has acknowledged that significant numbers of claims have been delayed, diverted, or rejected over reporting discrepancies, ACH enrollment defects, and data mismatches between declarations and entry records. The agency has pushed importers toward a suite of new ACE reports, including the ES-022 entry summary report linking declarations to payments, the REV-603 trade refund report tracking claims through statuses such as Sent to Treasury and Funds Diverted, and the REV-613 report cataloguing refunds bounced for bad banking information. Customs practitioners at Troutman Pepper Locke have warned that companies failing to actively monitor these reports, maintain accurate ACH enrollment, and promptly chase rejected claims may wait months longer than necessary for money they are owed.
Wall Street Discovers the Tariff Refund
Where billions of dollars sit in administrative limbo, finance follows. A secondary market in IEEPA refund rights has developed with remarkable speed, as importers seeking immediate liquidity sell or borrow against claims that may take months or years to pay in full.
Public reporting suggests the market covers up to roughly $100 billion in potential refund claims. Hedge funds and private credit funds are reported to be buying interests in claims from importers, with pricing that migrated from about 20 cents on the dollar before the Supreme Court decision to a range of 50 to 90 cents afterward, a repricing that itself measures how the ruling transformed speculative litigation exposure into near-money. Other reported structures include term loans secured by refund claims, featuring payment-in-kind interest, loan-to-value ratios around 50 percent, and minimum loan sizes near $10 million backed by claims roughly twice that size. Some individual trades reportedly involve claims from the tens of millions to more than $100 million.
The legal plumbing of these transactions is anything but simple. Deals implicate the federal Assignment of Claims Act, which restricts transfers of claims against the government; Uniform Commercial Code perfection and priority questions; bankruptcy treatment of after-acquired property; and the practical reality that CBP and Treasury systems pay the importer of record, whatever private arrangements sit behind it. Counsel active in the market emphasize that a purchased refund right is only as good as the structure that connects the buyer to the government’s payment, and that Treasury offsets for unrelated government claims can shrink recoveries in ways purchasers do not always model.
The Appeal That Shadows Everything
Hanging over both the refund pipeline and the market that trades on it is continuing litigation. The Court of International Trade ordered refunds of IEEPA-related tariffs on a nationwide basis, extending relief to all affected importers rather than only the litigants, and the government appealed to the US Court of Appeals for the Federal Circuit, challenging in particular the CIT’s authority to mandate universal refunds and the eligibility of finally liquidated entries, the roughly $11.4 billion Phase 3 pool.
The appeal matters for three reasons. First, an adverse ruling could slow or suspend portions of the payout, particularly for liquidated entries where the government argues that finality doctrines cut off repayment. Second, the outcome will set precedent for the parallel fight over Section 122: after the Supreme Court struck down the IEEPA duties in February, the administration immediately imposed a temporary 10 percent global import surcharge under Section 122 of the Trade Act of 1974, and on May 7 the CIT ruled that measure unlawful too, holding that an ordinary trade deficit is not the statutory balance of payments deficit the provision requires. Refund claims from the Section 122 interlude now sit behind the IEEPA claims in the queue, and their fate will track the appellate law made in the IEEPA cases. Third, market participants pricing refund rights must discount for appellate risk, and every docket development moves the private market’s clearing prices.
A Patchwork Tariff Landscape, and a Fiscal Paradox
The refund saga is unfolding inside a tariff system that has become, in the description of practitioners, a patchwork of active measures, invalidated programs, and replacement authorities. The Section 232 national security tariffs on steel, aluminum, copper, semiconductors, pharmaceuticals, lumber, and other sectors survived the IEEPA ruling untouched, as did the Section 301 actions against China, the 25 percent Brazil action, and the forced-labor tariffs of 10 or 12.5 percent imposed on 60 economies in July. New authorities keep arriving: the administration’s first-ever use of Section 338 of the Tariff Act of 1930 against Canada in August demonstrated that the executive’s tariff toolkit remains deep even after the courts closed its broadest compartment.
The result is a fiscal paradox: even as CBP repays tens of billions in invalidated IEEPA duties, gross tariff collections remain historically high. The Tax Foundation, updating its tracker on September 10, estimated that the administration’s tariffs will increase direct customs duty collections by $151.5 billion in 2026 and by roughly $2 trillion over the coming decade, even as it estimated that retaliatory tariffs imposed by China and Canada will reduce long-run US GDP by 0.1 percent and cut hours worked by the equivalent of 131,000 full-time jobs. American importers, in other words, are simultaneously receiving the largest refunds in customs history and paying some of the highest duty bills in modern times, often on the same products under different statutes.
What Importers Should Be Doing Now
For companies with IEEPA-era duty payments, the practitioner consensus has hardened into a checklist. Confirm ACE portal access and user permissions. Validate ACH refund enrollment down to the account level, since banking mismatches are the leading cause of diverted payments. Schedule recurring ACE refund reports rather than pulling them manually. Reconcile every CAPE declaration against entry summaries and payment records, separating principal from interest. Preserve the full documentary chain, from entry summaries to broker communications, against the audits that will inevitably follow a disbursement program of this size. And coordinate refund administration with ongoing tariff strategy, because exposure under surviving and successor authorities, from Section 232 to Section 301 to whatever replaces Section 122, continues to accrue while the old duties come back.
Companies considering monetizing their claims face a further layer of diligence. The question is not whether a refund right can be sold, but whether the sale will be recognized where it counts, at the intersection of the Assignment of Claims Act, the UCC, existing credit agreements, and CBP’s payment systems. Sellers should price the convenience of immediate cash against discounts that still run well below face value for complicated claims, and buyers should assume that appellate developments can move recoveries in either direction.
How a Refund Becomes a Balance Sheet Event
The accounting and treasury dimensions of the refund program have become a discipline of their own. For public companies, the timing and recognition of refund receivables has drawn auditor attention all year: a claim accepted in CAPE with a certified amount presents differently than a declaration still in validation, and the distinction between potential and certified refunds within CBP’s $128.68 billion figure matters enormously to how much any individual company can book and when. Finance teams that treated the February ruling as a one-time gain have learned that the money arrives in tranches, net of offsets, with interest calculated separately, and that quarter-end cutoffs rarely align with Treasury’s disbursement rhythms.
The interest component is not trivial. Refunds carry statutory interest from the date of deposit, and for duties paid at the height of the IEEPA program in 2025, the accrued interest on large claims runs into millions of dollars. The ES-022 report’s separation of principal and interest exists precisely because reconciling the two against internal accruals has proven to be one of the most error-prone steps in the process.
Then there is the question of who, within a supply chain, actually owns the money. Many import programs run through customs brokers, agents, or nonresident importer arrangements, and many purchase contracts during the tariff era included clauses allocating duty costs between buyers and sellers. Where a foreign supplier funded the duties through delivered-duty-paid terms, or where a customer reimbursed tariffs through surcharges, the legal importer of record receiving the refund may face contractual claims from counterparties who bore the economic cost. Disputes over these allocations are already surfacing in commercial arbitration, and practitioners expect a wave of them as larger refunds land.
Small Importers, Big Frictions
The refund program’s burdens do not fall evenly. Large importers with dedicated trade departments, national brokers, and outside counsel have moved through CAPE efficiently, and it is their claims that dominate the certified dollar totals. Small and mid-sized importers, the family-owned distributors, e-commerce sellers, and regional manufacturers who paid IEEPA duties on the same terms, face a different experience. Many learned of the refund process weeks after it opened, discovered that their ACE portal accounts had lapsed or never existed because a broker handled everything, and found that reconstructing entry-level duty data from broker statements is slow, tedious work.
Trade associations have responded with webinars, template declarations, and pressure on CBP to simplify enrollment, and the National Retail Federation has publicly tracked the process to keep member expectations grounded. Customs brokers report that refund assistance has become a significant service line, with fee structures ranging from flat rates to contingency percentages that consumer-protection-minded observers are watching closely. The gap between sophisticated and unsophisticated claimants is also the opening the secondary market has exploited most aggressively: the steepest discounts on refund rights have been paid to sellers who valued certainty and simplicity over maximum recovery, which is to say the smallest claimants with the least leverage.
There is also a compliance undertow. CBP has warned that CAPE declarations are subject to verification, and that inflated or duplicative claims expose filers to penalties under the customs fraud statutes. A refund program of this scale will inevitably generate its share of enforcement cases, and practitioners are advising clients to document the basis for every claimed entry with the assumption that a percentage of declarations will be audited years from now.
The View from Washington
Politically, the refund program occupies awkward ground. The administration has complied with the refund orders while appealing their broadest elements, and it has pointedly noted that the overall tariff program continues to generate historic revenue through the surviving authorities. Congressional reaction has split on predictable lines, with some members pressing CBP to accelerate payments to small importers who lack the advisers to navigate CAPE, and others demanding scrutiny of the hedge funds profiting from discounted claim purchases.
Within the trade bar, the episode has prompted a larger reflection about institutional capacity. CBP built CAPE in roughly two months under court deadlines, an achievement practitioners genuinely praise, but the improvisation also exposed how little standing infrastructure existed for mass remediation. Proposals now circulating among former officials would make the CAPE architecture permanent, so that future invalidations, exclusions, or retroactive rate changes could be administered without rebuilding the machine each time. Given that the Federal Circuit’s coming decision could itself require another round of recalculation in either direction, the case for permanence is making itself.
The Long Tail
However the Federal Circuit rules, the IEEPA refund operation will shape American trade administration for years. It has forced CBP to build, under litigation deadlines, a centralized refund infrastructure that did not exist eighteen months ago, and that machinery will outlive this episode. It has taught importers that duty payments made under legally contested programs are recoverable assets worth tracking with the same rigor as receivables. And it has taught the government a harder lesson, now visible in the migration of tariff policy onto Section 232, Section 301, and other explicit delegations: tariffs built on contested authority can be unwound, at staggering administrative cost, by five votes and a docket number.
For the importing public, the practical advice is simpler. The money is real, the process is genuinely moving, and the difference between companies that get paid in 60 days and companies that wait a year will be made in the unglamorous details of enrollment data, report monitoring, and documentation. In the largest refund program in customs history, the winners are being decided not in Washington courtrooms but in importers’ own compliance departments.