U.S. Customs and Border Protection has told a federal court that it is not yet able to begin processing refunds linked to tariffs imposed under the International Emergency Economic Powers Act, even though those levies were invalidated last month.
Earlier this week, the Court of International Trade ordered CBP to disregard the now-defunct tariffs when finalising liquidation for goods entering the United States. The agency had stopped collecting those duties on February 24, following a Supreme Court decision that ruled them unlawful.
In a filing on Friday, CBP said it could not currently comply with the court order because its systems and operations are not designed for an exercise of that scale. However, the agency said it aims to build a streamlined refund process within 45 days.
Judge Richard Eaton has ordered CBP to provide an update on its progress by 2 p.m. ET on March 12.
Under the agency’s proposed plan, importers would first need to identify the entries subject to the invalidated IEEPA tariffs. CBP’s Automated Commercial Environment (ACE) would then validate each submission, recalculate the duties owed and remove the affected tariffs. Even with that automation, CBP staff would still need to verify and certify each refund, while ACE would aggregate totals by importer and liquidation date.
The scale of the task is considerable. CBP estimates that as of March 4, around 53 million entries had been subject to IEEPA tariffs, representing roughly $166 billion in deposits.
Because agency staff would need to validate every refund request, CBP said the process would require more than 4 million labour hours if applied across all entries.
The situation leaves importers in a holding pattern. As one trade lawyer put it, the court has ordered refunds, but the operational process for issuing them is still being built.
