Tariff refunds may cover more entries — but not without a fight from the Trump administration

U.S. Customs and Border Protection (CBP) might start issuing refunds for a wider array of now-invalid tariffs as soon as next month; however, pending legal disputes could influence the schedule.

During a congressional hearing on Tuesday, CBP Executive Assistant Commissioner Susan Thomas said the agency is enhancing its Consolidated Administration and Processing of Entries (CAPE) portal to handle additional categories of refunds tied to tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which were struck down by the Supreme Court earlier this year.

The first phase of the upgrade, expected to launch on June 29, will allow importers with entries pending reconciliation to request refunds. These entries represent approximately $28.7 billion in potential refunds. A second phase, targeted for late July, is being developed to process refunds for finally liquidated entries, which account for an additional $11.4 billion, or roughly 6.9% of all IEEPA tariff collections.

According to Thomas, once both enhancements are operational, approximately 95% of all entries subject to the IEEPA tariffs will be eligible for refund processing through CAPE. Certain categories, including drawback claims, protested entries, and improperly filed transactions, will require separate handling.

Despite CBP's progress, the refund process remains subject to ongoing litigation. Last week, the Department of Justice appealed a ruling from the Court of International Trade that directed the federal government to issue refunds for the invalidated tariffs on a nationwide basis. While the original ruling excluded finally liquidated entries, the court later expanded its order to include them.

The DOJ argues that the court's authority to order refunds extends only to importers that directly challenged the tariffs in court. The appeal is currently pending before the Court of Appeals for the Federal Circuit.

Kelly Nelson, Managing Director of Trade and Customs at KPMG US, noted that government attorneys maintained during the hearing that refunds for finally liquidated entries cannot be issued without additional court authorization. As a result, a final judicial ruling or other legal mechanism may be required before those refunds can be processed.

In the meantime, CBP continues to move forward with refund administration. As of June 5, the agency had accepted and begun processing approximately $94.9 billion in refund claims, with nearly $24 billion already forwarded to the Treasury Department for payment. Thomas stated that CBP expects to submit an additional $480 million in refunds this week and anticipates surpassing $60 billion in Treasury-directed refunds by the end of the month.