REFUND OF IEEPA TARIFFS
- Scharlack
- 12 hours ago
- 6 min read
by José Rubens Scharlack
Supreme Court Declares Tariffs Invalid Under IEEPA
In my article “Drawing the Line,”¹ I outlined the constitutional, legislative, and jurisprudential landscape on which the United States Supreme Court would position the so-called “tariff surge” imposed by the Executive Branch beginning in 2025. I highlighted the need to draw a clear limit—the “line”—between Congress’s taxing powers and those that, in emergency situations, the Executive might borrow. In practice, however, the line drawn by the Supreme Court²—given the procedural particularities of the case—was more like one traced with a stick in beach sand: the tariff surge finds no basis in the International Emergency Economic Powers Act (IEEPA), the only statute invoked by the government in its defense as support for the challenged exactions. The Supreme Court closed the door on tariffs under IEEPA but left a window open for them to seek a more favorable outcome if the Executive anchors them in other emergency powers statutes.³
The majority’s reasoning rests on three pillars. First, tariffs are an exercise of the “power of the purse” and, as such, primarily belong to Congress. The Court understands them as a manifestation of the taxing power and rejects the possibility that the Executive may impose them under IEEPA in peacetime. Second, the Court frames the case under the “major questions doctrine,” asserting that extraordinary delegations of power cannot be derived from ambiguous language, and that measures of major foreign policy significance grounded in emergency laws require clear congressional authorization. Finally, in a textual analysis, IEEPA lists, among other things, powers to block, prohibit, and regulate imports and exports, but does not mention taxing such transactions. The Court made it clear that regulating imports is not equivalent to taxing them,⁴ as evidenced by the fact that no president had imposed tariffs under IEEPA during its forty years in force.
By limiting its analysis to the absence of a delegation of tariff powers in IEEPA, the Supreme Court tacitly left room for the Executive to act under other emergency statutes, which have their own requirements and safeguards. The Executive did so almost immediately. This new initiative will follow its own path and falls outside the scope of this article. Our focus here is the refund of IEEPA tariffs, beginning with the acts and measures that unfolded following the Supreme Court’s decision and leading to the current moment, with suggested precautions for affected importers.
Subsequent Actions Following the Decision
The Supreme Court did not address the issue of tariff refunds in its decision. In response, the Executive issued the Executive Order “Ending Certain Tariff Actions”⁵ on February 20, 2026, revoking several executive orders that had imposed tariffs, including the original general 10% tariff (set forth in Executive Order 14257 of April 2, 2025) and the additional tariff on Brazil (imposed by Executive Order 14323 of July 30, 2025).
At the same time, the Court of International Trade (CIT), in a refund action brought by an importer (Atmus Filtration, Inc.), issued a preliminary injunction ordering refunds on March 4, 2026.⁶ Based on (i) the Supreme Court’s decision in Learning Resources, (ii) the CIT’s exclusive jurisdiction over import-related disputes, and (iii) the internal designation of the issuing judge (Richard K. Eaton) to hear all cases concerning IEEPA tariffs, the refund order was directed to U.S. Customs and Border Protection (CBP) and extended to all importers affected by the Supreme Court’s decision—and therefore by the IEEPA tariffs.
Although still subject to appeal, the CIT’s decision is already producing concrete effects. For all entries (import transactions) subject to IEEPA tariffs, CBP was ordered to liquidate them excluding such tariffs; all liquidated entries whose liquidation is not yet final must be reliquidated excluding IEEPA tariffs.
Given the broad scope of the order, CBP requested additional time and, when prompted, submitted a progress report to the CIT on its reimbursement procedures for taxpayers.⁷ In it, CBP explained that it is building a centralized refund tool within its main customs clearance and trade data management portal, the Automated Commercial Environment (ACE). The tool is called Consolidated Administration and Processing of Entries (CAPE) and is expected to appear as a new tab within the ACE portal, accessible to both importers and brokers.⁸ Refund claims will be submitted via CSV file upload⁹ containing a summary of the affected entries. CAPE will then validate the file and entries, recalculate the amounts as if IEEPA tariffs had not applied, route entries through liquidation or reliquidation flows as appropriate, calculate interest, and ultimately process the refund,¹⁰ effectively transforming the matter from individualized administrative litigation into a mass procedure.
Although exceptional, the initiative is not unprecedented. There are relevant precedents for mass refunds in U.S. federal law. In the customs sphere, the most notable stems from United States v. United States Shoe Corp. (1998),¹¹ where, after the Supreme Court declared the Harbor Maintenance Tax (HMT) on exports unconstitutional, the government established specific rules and procedures to handle a significant volume of refund claims.¹²
On the legislative-procedural front, general procedures exist but vary by regime. In the internal tax sphere (IRS), there is a deadline for administrative claims,¹³ a requirement to exhaust administrative remedies before judicial litigation,¹⁴ and a deadline to bring the matter to court after final administrative denial,¹⁵ forming a sequence of administrative and judicial procedures similar to the Brazilian system. In contrast, in customs matters, liquidation of an import tends to be final and conclusive unless timely protested. The law sets a 180-day deadline from liquidation (or reliquidation) of the entry to file a protest,¹⁶ with any administrative denial subject to direct judicial review by the CIT.
Exceptionality and Uncertainty
The mass procedure outlined by CBP presents two risks: (i) the possibility of its cancellation if the Executive successfully appeals the CIT’s decision that mandated it, and (ii) the possible exclusion from its scope of entries whose liquidation status is final.
Indeed, the standard procedure for recovering customs duties involves a protest and an individual refund claim, first submitted to CBP and, on appeal, to the CIT. In Atmus Filtration, however, the CIT expanded the reach of the judicial proceeding from which it arose and created a mass refund for all importers subject to IEEPA tariffs. Although its reasoning appears solid, it is subject to challenge. If the decision is overturned, the legal basis for the mass procedure currently being implemented will disappear.
On the other hand, the CIT order underlying the CBP procedure requires liquidation of entries not yet liquidated and reliquidation of entries already liquidated but not final. It says nothing about entries that have been liquidated with final status.
In either scenario, it will fall to CBP itself (and thus to the Executive) to decide (i) whether to continue the mass procedure if the CIT decision is reversed, and (ii) whether to include entries with final liquidation status, which it is not currently required to do. In both cases, any such CBP action would be voluntary and would require new legal support.
For holders of claims to refunds of IEEPA tariffs, it is therefore not prudent to simply wait for the implementation of the CAPE tool. The 180-day deadline to protest entries that have been liquidated with final status is already running from the date of liquidation (bearing in mind that the tariffs imposed on Brazil began in August 2025), and there is a real risk of losing the right to a refund if no action is taken before the CBP mass procedure framework becomes final. The same risk applies to other entries (not yet liquidated or liquidated without final status) if the mass procedure loses effectiveness on appeal of the CIT decision.
Accordingly, importers should closely monitor developments and conduct a detailed review of their import transactions subject to IEEPA tariffs, segregating: (i) entries already liquidated with final status (subject to individual protest as a means of preserving refund rights, although they may still be covered by the mass procedure), (ii) entries liquidated but not final (subject to reliquidation excluding IEEPA tariffs within the mass procedure while it remains in effect), and (iii) entries not yet liquidated (subject to liquidation excluding IEEPA tariffs within the mass procedure while it remains in effect). For the latter two categories, protests may still be filed following each liquidation or reliquidation, along with individual refund claims should any adverse outcome arise within the mass procedure.
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1 Learning Resources, Inc. v. Trump, 24-1287 (Feb/20/2026) (a group of cases that also included Trump v. V.O.S. Selections, 25-250), https://www.supremecourt.gov/opinions/25pdf/24-1287_4gcj.pdf
2 Others exist, as discussed in the article and acknowledged in the decision.
3 The government’s argument that the power to regulate imports would include the power to tax them was rejected by the Supreme Court.
5 Atmus Filtration, Inc. v. United States, 26-01259 (03/04/2026), https://www.mti-worldwide.com/s/Court-No-26-01259.pdf
7 nstead of ABI (Automated Broker Interface), which is the traditional “channel” through which brokers electronically transmit customs entries and declarations to CBP.
8 A simple “Comma-Separated Values” (CSV) file, similar to a text-based spreadsheet, in which each line represents a record and columns are separated by commas.
9 Typically via electronic payment to the bank account of the importer or its authorized representative.
12 IRC § 6511.
13 IRC § 7422(a).
14 IRC § 6532(a).
15 19 U.S.C. § 1514(c)(3). Vide também 19 CFR § 174.12, https://www.ecfr.gov/current/title-19/chapter-I/part-174/subpart-B/section-174.12 and https://trade.cbp.dhs.gov/ace/liquidation/LBNotice/. Note, however, 19 U.S.C. § 1514(d) (limiting the scope of a protest to what was changed in the “reliquidation”).
Published on the Migalhas Portal on March 19, 2026. Access it at: https://www.migalhas.com.br/depeso/452138/restituicao-das-tarifas-ieepa
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