The Court of International Trade (CIT) suspended its order requiring U.S. Customs and Border Protection (CBP) to immediately refund IEEPA tariffs due to severe logistical constraints. Instead, CBP is finalizing a new, automated refund process within its Automated Commercial Environment (ACE) platform, which it anticipates will be operational in about 45 days (mid-to-late April).
To ensure prompt processing once CBP deploys this new relief mechanism, importers should proactively begin:
- Auditing entry datagoing back to February 2025;
- Compiling documentsto fully support upcoming refund claims;
- Separating out IEEPA tariffsfrom other regular duties paid, which may require detailed manual review if duties were combined on the same Entry Summary line;
- Updating financial routing information(ACH data) via ACE, as CBP transitioned to exclusively issuing electronic refunds effective February 6, 2026; and
- Monitoring for formal guidancefrom CBP detailing how to file required declarations using the new ACE functionality.
The Initial Order
On March 4, 2026, Senior Judge Richard K. Eaton of the CIT issued an order directing CBP to (1) liquidate all unliquidated entries subject to IEEPA duties without regard to those duties, and (2) reliquidate any liquidated entries for which liquidation is not final without regard to IEEPA duties. He amended the order the next day, leaving in place the essential findings and direction to CBP.
Although Judge Eaton's order was brief, it did address the question whether the Supreme Court's decision in Trump v. CASA precludes the CIT from issuing a nationwide injunction. It succinctly distinguished the CIT's mandate from that of district courts whose powers were at issue in CASA, noting that the CIT was given nationwide jurisdiction at its inception in the interest of ensuring uniform application of U.S. trade laws. Judge Eaton also referred to the Uniformity Clause of the U.S. Constitution (Art. I, § 8), which mandates that all duties and imposts be uniform throughout the United States. He also stated that in the interest of avoiding conflicting decisions from different judges of the CIT, the court's Chief Judge had assigned him as the only judge handling the refund of IEEPA duties.
CBP's Logistical Constraints and the Suspension Order
In response to Judge Eaton's order, CBP's Executive Director for Trade Programs submitted a declaration to the court on March 6, explaining the operational impossibility of complying with the order. The declaration provided several metrics that help illustrate the magnitude of the task before CBP:
- Over 330,000 importers have made more than 53 million entries subject to IEEPA duties.
- The total amount of IEEPA duties and estimated deposits collected is approximately $166 billion.
- Processing refunds for these entries manually would require over 4.4 million man-hours from CBP personnel.
- Diverting staff to this manual effort would severely disrupt CBP's vital national security and trade enforcement functions.
Having heard from CBP, Judge Eaton issued an order on March 6 suspending his previous order to the extent that it directed immediate compliance. However, noting that "the clock is ticking" on refunds that must be paid with interest, the court warned that U.S. taxpayers will ultimately bear the financial burden of any delays. The order highlighted that approximately $650 million in interest is accruing per month and estimated that $10 billion in interest will have accrued if entries are not liquidated before the end of the year.
To ensure the timely development and implementation of the refund process, the court ordered CBP to file a short report describing its progress by 2:00 p.m. EDT on Thursday, March 12, 2026. Furthermore, while immediate systemic compliance was suspended, the court made an exception for the active litigation, ordering CBP to immediately provide the information pertaining to the entries of the plaintiff, Atmus Filtration.
Actionable Next Steps for Importers
Although CBP told the CIT that it would be unable to comply with an order that it start processing refunds immediately, it also gave some hope to importers seeking refunds. The Executive Director for Trade Programs told the court that CBP is developing new functionality within its online ACE platform that will allow for an administration of refund claims that "will require minimal submission from importers." The Executive Director anticipated that the new process will be operational in approximately 45 days (that is, by mid-to-late April).
According to the Executive Director's declaration, the refund system that CBP is developing will require an importer to file a declaration in ACE specifying the entries on which IEEPA duties were paid. ACE then will verify the importer's claim, recalculate the duties owed without the IEEPA tariffs, process refunds with applicable interest, and aggregate payments by importer. The Executive Director's declaration did not address the handling of discrepancies between an importer's refund claim and the refund determined by ACE. That presumably will be addressed in future filings to the CIT.
In anticipation of CBP's refund processing system coming online in mid-to-late April and the CIT's ordering the processing of refunds through that system, importers should take the following steps to ensure that they are well positioned to submit complete applications at the appropriate time:
- Register for Electronic Refunds: Effective February 6, 2026, CBP transitioned to issuing all refunds electronically. To be eligible for electronic refund, an importer must supply ACH information to CBP through ACE. Failure to do so risks having a refund claim rejected.
- Compile and Audit Entry Data: The forthcoming ACE process will require importers to submit a list of entries subject to IEEPA duties. CBP's Executive Director for Trade Programs noted that importers frequently combined IEEPA duties and regular duties on the same Entry Summary line (instead of breaking out the applicable duties for each specific HTS classification, as directed by CBP). Consequently, identifying the precise IEEPA amounts may require a detailed manual review to isolate the relevant tariffs prior to submission.
- Monitor for Implementation Guidance: CBP stated it will issue formal guidance on how to file the required refund declarations on the new ACE functionality. Importers should also monitor for any updates following CBP's progress report, which the court has ordered to be filed by March 12.
As the fallout from the Supreme Court's February 20 decision in Learning Resources, Inc. et al v. Trump continues to unfold, businesses are navigating a rapidly shifting landscape of new tariff orders, refund opportunities, and urgent supply chain adjustments. To help our clients make sense of these complex developments, Baker Botts has formed a multidisciplinary Tariff & Trade Strategy Task Force. Uniting decades of government and private practice experience across our international trade, litigation, corporate, and tax groups, the Task Force is uniquely positioned to help you secure owed refunds, hedge against future risks, and address these unprecedented international trade challenges from every possible angle.
If you are interested in receiving future updates from the Baker Botts Tariff and Trade Strategy Task Force, please sign up here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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