Refunds are coming—if not imminent—for hundreds of thousands of U.S. businesses that shelled out for tariffs now deemed illegal.
Brandon Lord, executive director of the Trade Programs Directorate at Customs and Border Protection, wrote in a Court of International Trade filing on Friday that the agency is preparing its Automated Commercial Environment system to electronically process what he said was $166 billion in levies collected under the International Emergency Economic Powers Act. The catch? It won’t be ready for another month and a half.
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“In light of the court’s March 5, 2026, amended order, CBP is now facing an unprecedented volume of refunds,” Lord said, referring to CIT’s order to liquidate all unliquidated IEEPA entries—as well as reliquidate finalized ones—without those duties.
“Its existing administrative procedures and technology are not well-suited to a task of this scale and will require manual work that will prevent personnel from fully carrying out the agency’s trade enforcement mission,” he added. “Personnel would be redirected from responsibilities that serve to mitigate imminent threats to national security and economic security.”
Lord said the augmented system will streamline and consolidate refunds—plus any owed interest—on an importer basis rather than issuing tens of millions of separate entry-specific refunds with multiple payments going to the same importer. As of March 4, he added, more than 330,000 importers have made over 53 million entries relating to IEEPA tariffs. Of these, 20.1 million entries remain unliquidated. Lord estimated that the automated controls would save CBP $4 million in manual processing hours.
“CBP is making all possible efforts to have this new ACE functionality ready for use in 45 days,” he said. “This new process will require minimal submission from importers. It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.”
Lord’s declaration came as customs lawyers huddled with Judge Richard Eaton behind closed doors at the Court of International Trade to work out how CBP would comply with his Wednesday directive to start paying back importers using its existing systems. A federal appeals court had already rejected on Monday the Trump administration’s request to stall the implementation of a Feb. 20 Supreme Court ruling invalidating the IEEPA tariffs because of authority overreach. Eaton himself was unequivocal that “every single cent” of the IEEPA duties must be refunded “immediately and with interest.”
While the case the judge is overseeing stems from a single importer—Atmus Filtration—which claimed in a court filing it’s owed $11 million in illegal levies, more than 2,000 companies—including Allbirds, J.Crew and Skechers—have filed lawsuits seeking a return of the IEEPA levies that President Donald Trump used to bend global trade to his will, albeit with middling results.
The new ACE functionality means importers won’t have to sue for refunds, but the delay also spells bigger government interest payments. According to research from the Cato Institute, a nonpartisan think tank in Washington, D.C., dragging out the reimbursements will cost taxpayers $23 million a day—or $700 per month—in interest alone.
“Interest compounds daily at an annualized rate equal to the IRS corporate overpayment rate—4.5 percent for overpayments exceeding $10,000 and 6 percent on anything below it,” it wrote in a blog post on Monday. “Thus, for example, the 120-plus-day delay the government just requested would cost taxpayers almost $3 billion in additional interest.”
But tying up that cash also hurts U.S. importers because they can’t invest that capital in operations, the Cato Institute said.
Further down the supplier chain, suppliers that have been asked—or told—to share the tariff burden aren’t holding their breath for any kickbacks, either. Even so, hope springs eternal.
“Our member companies are in close contact with their US customers on all aspects of the trade, including the potential refund of tariffs,” Yohan Lawrence, secretary-general of the Joint Apparel Association Forum Sri Lanka, told Sourcing Journal. “We believe that given the spirit of cooperation that exists between manufacturers and customers that if and when these refunds do come through, brands will share these with the manufacturers to offset discounts given at the time of the tariff imposition.”
Faisal Samad, a director at the Bangladesh Garment Manufacturers and Exporters Association, agreed that factories would benefit if some of the tariff value they surrendered was restored. While the tariff sharing has varied from buyer to buyer, he knows of suppliers who have borne 50-50 or 70-30.
“That would help in the overall positioning for them going forward into the next year, because everything is rising in cost, and with the new war in Iran, there’s the possibility they’ll rise even further,” he said. “Certainly, we would request the buyers who have the opportunity to get their tariffs back to return in proportion to reinvest it into the factories.”
At the American Apparel & Footwear Executive Summit in Washington, D.C., on Wednesday, just before CIT laid down its verdict, trade expert and lawyer Peter Harrell said the question wasn’t “Do you have a right to get your money back?” but “How hard is the government going to make it to get your money?”
IEEPA had never been used to impose tariffs and does not clearly state it can be used for tariffs, “so as a strictly legal matter, it’s quite straightforward,” Harrell said. The Supreme Court ruling, too, was a “nice, clean decision” that “said this statute can’t be used for any tariffs at all, full stop.” It’s why, he added, President Trump threatened an embargo on Spain rather than tariffs.
“I don‘t think he’s going to do it; I don’t think he likes embargoes—he likes tariffs,” Harrell said. ‘But what that means is he has to find other statutory authorities to impose tariffs, which he is now in the process of rolling out.”
“I will say it is very clear that the government will have a legal obligation to pay refunds, at least with respect to companies that have preserved their procedural rights by filing a post-summary correction or a protest,” he added. “As I’ve said a number of times now, unfortunately for you guys, the biggest winners of Trump’s trade policy so far have been trade lawyers.”
