Key Takeaways
• Importers of record who paid for tariffs now ruled unconstitutional may seek refunds starting April 20 via a new portal administered by U.S. Customs and Border Protection.
• The portal – named CAPE – requires detailed filings and won’t issue automatic refunds. Claims could take months (or longer) to approve.
• The initial rollout covers only certain recent or unliquidated entries, and legal experts warn companies should proceed carefully and expect technical hiccups early on.
Businesses that directly paid tariffs later struck down by the Supreme Court may be eligible for refunds starting this week. However, the process is expected to be more complex and drawn out than many had hoped.
U.S. Customs and Border Protection will launch a long-awaited portal called Consolidated Administration and Processing of Entries (CAPE) on Monday. The site will allow businesses to submit refund claims for tariffs paid over the last year.
In November, the Supreme Court heard arguments in a case to determine whether President Trump’s sweeping global tariffs were constitutional under the International Emergency Economic Powers Act (IEEPA). In February, the court ruled that the tariffs were illegal.
Now, the government could owe up to $175 billion in tariff refunds.
Since the landmark Supreme Court decision, thousands of tariff refund claims have been filed with the Court of International Trade.
The goal of CAPE, according to CBP, is to simplify the refund process by offering an electronic pathway for claim submissions. Suppliers who paid IEEPA tariffs on imported goods are eligible for refunds, but only if they’re the “importer of record.” Buyers who were indirectly hit with tariff increases – such as distributors who purchased products through a domestic supplier – can’t submit a claim.
Phase 1 of the refund process will be deployed at 8 a.m. EDT on Monday, April 20. But this initial rollout doesn’t include all claim types.
According to customs law, when goods arrive in the U.S., importers must file an entry summary and pay duties on those products or materials. When an entry is liquidated, it means CBP has made a final call on how much money the importer (or that importer’s customs broker) owes. If the entry is unliquidated, the entry is still considered “open.”
“This first phase will cover unliquidated entries and liquidated entries within an 80-day window after liquidation,” explains Kevin Williams, an attorney and member of the International Trade Group at law firm Clark Hill.
These types of entries account for roughly 63% of all IEEPA tariffs. That’s according to Sanne Manders, president of Flexport, a global trade and logistics company that helps businesses estimate the size of their refunds.
“The remaining 37% of entries that have already been liquidated or are being protested are excluded,” Manders told CBS News. “Assuming everything goes well, you’ll probably see 63% of refunds potentially in months, while the other 37% could take years.”
As part of the claims process, Williams adds, the importer of record or the importer’s customs broker submits a CAPE declaration containing a list of entry numbers through CBP’s Automated Commercial Environment (ACE). ACE then conducts a two-step validation of the declaration. In the first step, the system confirms that the entry numbers are properly formatted, that the declaration was submitted by the importer of record on the entries and that the file isn’t corrupted.
$175 billion
What the U.S. government could potentially owe in tariff refunds.
(The CATO Institute)
According to Lizbeth Levinson, co-chair of the international trade practice group at Fox Rothschild, payouts won’t be automatically issued.
“These are absolutely not automatic refunds,” Levinson told CBS News. “You have to jump through hoops, even though customs should have taken it upon themselves to do automatic refunds. They have all the information — they know who paid IEEPA duties and how to get in touch with people.”
This doesn’t come as a surprise to many promo suppliers, who weren’t especially optimistic about the process back in February, when the Supreme Court officially released its decision.
“I think [the refund process] is going to be a mess, and there are billions of dollars on the line,” Daniel Oas, CEO of High Caliber Line (asi/43442), told Counselor earlier this year. “If we’re able to get the refund, we will, but it’s a whole lot of work.”
Now, even with an updated system in place, Oas isn’t sure how effective the refund process will be.
“While we’re happy there’s a formal system in place, there’s still a lot of confusion and uncertainty around how to collect reimbursement for all of the illegal emergency tariffs,” he tells Counselor.
Even with the new, simplified online process, claims could take several months to process. CBP says it will issue tariff refunds within 60 to 90 days of approving them, though it’s unclear how long the approval process will be, especially considering the backlog of claims that the system will likely need to sift through. Additionally, refunds could also be delayed beyond 60 to 90 days if claims contain errors, such as applying the wrong tariff code.
“If the declaration fails the validation, it’s rejected and the filer is notified,” says Williams. “The filer can review the reasons for the rejection, correct them and resubmit the declaration.”
Promo companies that choose to submit a claim should do so thoughtfully. It’s not something to rush through, global trade experts say.
According to Williams, importers should remember that Monday’s deployment is only the first step in a larger process.
“It’s not a deadline,” he says. “Importers should be aware that day one deployment issues may occur due to system overload and other system issues.”
