IEEPA Tariff Refunds: Phase 3 Opens the Door for Importers Who Sue
In re Tariffs Collected in Reliance on the International Emergency Economic Powers Act (IEEPA), U.S. Court of International Trade.
Our last update noted that U.S. Customs and Border Protection (“CBP”) had refunded large amounts of IEEPA duties through Phases 1 and 2 of its Consolidated Administration and Processing of Entries (“CAPE”) system, but that there was not yet a mechanism for refunding duties on entries that had become finally liquidated. That has now changed.
In July, the Court of International Trade (“CIT”) largely resolved the problem for importers that had already brought refund actions. Judge Richard K. Eaton ordered CBP to reliquidate without IEEPA duties finally liquidated entries of plaintiffs in approximately 3,700 pending IEEPA refund cases. The order was significant because the government had maintained that CBP lacked legal authority to reopen finally liquidated entries without a court order. Judge Eaton expressly stated that his order supplied that authority. CBP subsequently announced that Phase 3 of CAPE—the administrative mechanism for implementing those court-ordered reliquidations—becomes operational on October 6, 2026.
The court has indicated that July was not a deadline; it has continued to grant orders requiring reliquidation of finally litigated claims that have been raised with the court in individual litigations. The CIT has announced that refunds will be processed for these claims on a rolling basis after the initial focus on refunding claims made at the time of the Court’s decision.
Why it matters: Companies that have liquidated claims and have not yet filed a claim in the CIT should seriously consider that option at this point There are other options: pending class actions could encompass these claims, but classes have not yet been certified and the timing and availability of a recovery are uncertain. The federal government could also lose on appeal, and the appellate court conclude that the CBT does not require a court order in an individual action to relitigate claims. But at this point, filings in the CIT are fairly mechanical: they typically turn on legal argument, with limited reference to the facts of an individual case. Companies with liquidated Phase III claims should consider whether the value in obtaining finality and getting in the queue for Phase III refunds is worth the legal expense in bringing an individual claim.
The Successors to the IEEPA Tariffs, Under Sections 122 and 301, Are Also Under Challenge
State of Oregon v. Trump, No. 26-1804 (Fed. Cir.); In re Section 301 Forced Labor Cases, Court No. 26-03555 (Ct. Int’l Trade).
After the Supreme Court invalidated the administration’s IEEPA tariffs, the administration imposed a temporary 10% worldwide tariff under Section 122 of the Trade Act of 1974. On May 7, a divided CIT held that the tariff exceeded the authority Congress granted under Section 122. The legal dispute turns principally on the statute’s prerequisite for imposing such tariffs: Section 122 authorizes temporary import restrictions to address “large and serious United States balance-of-payments deficits.” The CIT majority concluded that the trade deficit, current-account deficit, and related modern measures relied upon by the administration were not the “balance-of-payments deficits” Congress meant when it enacted Section 122 in 1974. The Federal Circuit has stayed the judgment pending appeal, saying that the CIT majority’s opinion “may be incorrect.” The Section 122 tariffs themselves expired at the end of their statutory 150-day period in July, but the appeal remains important to determining the legality of the duties already collected and the potential availability of refunds.
When the Section 122 tariffs expired, the administration turned to Section 301 of the Trade Act, imposing new tariffs on imports from 60 economies based on USTR findings concerning those economies’ failure to impose and effectively enforce prohibitions on imports made with forced labor. Importers and states have challenged those tariffs in consolidated litigation before the CIT. The challengers contend, among other things, that Section 301 does not authorize tariffs of this breadth based on the stated forced-labor rationale. The government maintains that USTR made the findings required by Section 301 and acted within the authority Congress granted. The CIT heard argument on September 30, 2026; no decision has yet issued.
Why it matters: Importers to the United States have now faced three successive tariff regimes—IEEPA, Section 122, and Section 301—with the first invalidated and the latter two subject to continuing litigation. Companies should maintain entry-level records that separately identify duties paid under each regime. The experience with IEEPA demonstrates that if a tariff is ultimately invalidated the ability to recover payments may depend not only on the merits of the court challenge but also on procedural steps taken by individual importers and close attention to a refund mechanism if one emerges. The IEEPA experience also shows that those who act most quickly are more likely to be first in line in any refund queue.
The Consumer Class Actions: A Move Toward Centralization
On October 2, 2026, the Judicial Panel on Multidistrict Litigation ordered federal consumer class actions seeking recovery of tariff refunds obtained by Amazon to be transferred to a multi-district litigation (“MDL”) based in the Washington District of Washington. (In re Amazon Tariff Litigation, MDL 3179).
The next meeting of the Panel, on December 3, 2026, will hear a motion to centralize a wider group of consumer class actions against a variety of defendants concerning recovery of tariff refunds by consumers, on the theory that they contain common legal and factual issues. (In re Retailer Tariff Litigation, MDL No. 3202). Briefing on that motion to transfer closed on September 18, 2026.
Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion.