The U.S. government has never had to give back $166 billion it collected illegally — until now. On April 20, U.S. Customs and Border Protection (CBP) launched a new electronic portal for importers to reclaim tariff payments that the Supreme Court ruled the president had no authority to collect. The first phase covers $127 billion across more than 56,000 registered importers, with refunds expected within 60 to 90 days.
The U.S. government has never had to give back $166 billion it collected illegally — until now. On April 20, U.S. Customs and Border Protection (CBP) launched a new electronic portal for importers to reclaim tariff payments that the Supreme Court ruled the president had no authority to collect. The first phase covers $127 billion across more than 56,000 registered importers, with refunds expected within 60 to 90 days.
The refunds trace back to April 2, 2025, when President Trump invoked the International Emergency Economic Powers Act (IEEPA) — a 1977 law designed for sanctions, not tariffs — to impose sweeping import duties on nearly every trading partner. Five small businesses facing bankruptcy sued, and the courts agreed at every level: IEEPA does not give the president the power to tax imports. The Supreme Court's 6-3 ruling in February 2026 set off the largest customs refund operation in American history, while the administration pivoted to a different legal authority with a lower cap and a ticking clock.
Why it matters
Businesses that absorbed or passed on billions in unlawful tariff costs can now reclaim that money, reshaping prices and supply chains.
Key Indicators
$127B
Phase 1 refunds eligible
Principal amount of IEEPA duty payments eligible for electronic refund in Phase 1, covering 82% of affected entries.
$166B
Total IEEPA tariffs collected
Estimated total duties collected under IEEPA authority across more than 53 million import entries.
56,497
Importers registered for refunds
Number of importers enrolled in CBP's automatic refund system as of April 9, 2026.
6-3
Supreme Court vote
The majority held that IEEPA does not authorize tariffs, with Chief Justice Roberts writing the opinion.
60–90 days
Expected refund timeline
CBP's estimated processing time after a valid refund claim is accepted through the CAPE portal.
CBP launches Phase 1 of the Consolidated Administration and Processing of Entries (CAPE) system, enabling importers to file refund claims covering $127 billion in IEEPA duties through the ACE Secure Data Portal.
Over 56,000 importers register for refunds
Administrative
CBP reports that 56,497 importers have enrolled in the automatic refund system, representing 82% of entries with IEEPA duty payments.
CIT expands refund eligibility to all entries
Legal
Judge Eaton broadens the refund order to include finally liquidated entries — those that had already completed the full liquidation cycle and protest period — ensuring no importer is left out.
CBP announces plan to build refund system without requiring lawsuits
Administrative
CBP announces it will create a centralized electronic refund process, sparing importers from having to file individual lawsuits to reclaim duties.
CIT orders CBP to refund all IEEPA tariffs
Legal
Judge Eaton orders CBP to liquidate and reliquidate all entries subject to IEEPA duties without regard to those duties, directing the agency to build a refund mechanism.
Supreme Court rules 6-3: IEEPA tariffs unlawful
Legal
In Learning Resources, Inc. v. Trump, Chief Justice Roberts writes for a six-justice majority that IEEPA does not authorize tariffs. The decision invalidates all tariff revenue collected under IEEPA — an estimated $166 billion.
Trump announces Section 122 replacement tariffs
Executive Action
Hours after the ruling, Trump announces new tariffs under Section 122 of the Trade Act of 1974, set at 15% globally — the maximum allowed. Section 122 imposes a 150-day time limit.
CIT confirms it can order refunds
Legal
The Court of International Trade rules that it has the power to order reliquidation and refunds if the Supreme Court holds the IEEPA tariffs unlawful, and that it will retain jurisdiction over claims for the two-year statute of limitations.
Supreme Court hears oral arguments
Legal
The Supreme Court hears oral arguments in Learning Resources, Inc. v. Trump and the companion case V.O.S. Selections, Inc. v. Trump.
Federal Circuit affirms: IEEPA does not authorize tariffs
Legal
The en banc Federal Circuit Court of Appeals upholds the CIT ruling, agreeing that IEEPA does not give the president power to levy import duties.
Court of International Trade strikes down IEEPA tariffs
Legal
The CIT rules that Trump overstepped his authority by using IEEPA to impose tariffs and orders the Liberation Day tariffs vacated.
Five small businesses sue to block tariffs
Legal
The Liberty Justice Center and law professor Ilya Somin file V.O.S. Selections, Inc. v. Trump in the Court of International Trade on behalf of five importers facing potential bankruptcy.
"Liberation Day" tariffs announced
Executive Action
Trump signs Executive Order 14257, declaring a national emergency over the trade deficit and imposing IEEPA tariffs on nearly all countries — 10% baseline starting April 5, with higher rates for major trading partners starting April 9.
Trump imposes first IEEPA tariffs
Executive Action
The administration publishes IEEPA-based tariffs on imports from China, Mexico, and Canada, citing the opioid crisis. It marks the first time IEEPA has ever been used to impose tariffs.
Scenarios
1
Refunds flow smoothly, importers recoup billions by summer
Discussed by: Trade law firms (Covington, Holland & Knight), CBP's own projections
If the CAPE system performs as designed and CBP meets its 60-to-90-day processing target, the bulk of Phase 1's $127 billion could be returned by July or August 2026. Phase 2 would follow for remaining entries. This outcome would provide a significant cash infusion to importers who have carried the cost for over a year, though questions remain about whether consumers who paid higher prices will see any benefit.
2
Processing bottlenecks delay refunds, importers return to court
Discussed by: Cato Institute, Morgan Lewis, trade litigation attorneys
The sheer scale — 53 million entries, $166 billion — could overwhelm CBP's systems. Compliance reviews could flag large numbers of claims. If delays stretch beyond 90 days, importers may seek court orders compelling faster action, and the CIT could impose deadlines or penalties. The 18% of entries not covered in Phase 1 remain in limbo until later phases are built.
3
Congress intervenes to restructure tariff authority permanently
Discussed by: Peterson Institute for International Economics (PIIE), Brookings Institution, Congressional Research Service
The Supreme Court ruling exposed a gap: Congress never explicitly authorized presidents to impose tariffs through emergency powers, yet presidents have broad trade authority under other statutes. Lawmakers could use this moment to either expand presidential tariff power with clearer statutory language or restrict it further. The 150-day clock on Section 122 tariffs creates a natural forcing function for congressional action by mid-July 2026.
4
Section 301 investigations replace IEEPA as the long-term tariff vehicle
Discussed by: Global Trade Alert, Duane Morris, Perkins Coie
Trump signaled that the 150-day Section 122 tariffs are a bridge to Section 301 investigations under the Trade Act of 1974, which allows tariffs in response to unfair trade practices without the time limits or rate caps. If the administration launches and concludes 301 investigations before Section 122 expires, it could reimpose tariffs at or above previous IEEPA levels on a country-by-country basis — this time on firmer legal ground.
Historical Context
United States v. United States Shoe Corp. — Harbor Maintenance Tax (1998)
March 1998
What Happened
The Supreme Court unanimously ruled that the Harbor Maintenance Tax — a 0.125% ad valorem charge on cargo shipped through U.S. ports — violated the Export Clause of the Constitution when applied to exports. The government had collected the tax from exporters for over a decade before the Court struck it down.
Outcome
Short Term
The government was required to refund all unlawfully collected payments to exporters, including interest. A claims process was established through Customs.
Long Term
The case established the principle that the government must return unlawfully collected trade-related payments in full. It became the key precedent cited by importers seeking IEEPA tariff refunds.
Why It's Relevant Today
This is the closest legal precedent to the current situation — a Supreme Court ruling invalidating a trade-related government charge and triggering a refund process through Customs. However, the IEEPA refund dwarfs it in scale: $166 billion versus roughly $730 million.
Youngstown Sheet & Tube Co. v. Sawyer — The Steel Seizure Case (1952)
June 1952
What Happened
During the Korean War, President Truman ordered the federal seizure of U.S. steel mills to prevent a strike that he said threatened national security. The Supreme Court ruled 6-3 that the president lacked authority to seize private property without congressional authorization, even during a national emergency.
Outcome
Short Term
The steel mills were returned to their owners. The steelworkers went on strike for 53 days.
Long Term
Justice Jackson's concurrence established the foundational framework for analyzing presidential power — a three-tier test that courts still use today, including in the IEEPA tariff cases.
Why It's Relevant Today
Both cases involve a president invoking emergency authority to take extraordinary economic action that the Supreme Court ultimately found exceeded executive power. The IEEPA ruling echoes Youngstown's core holding: emergency declarations do not give the president powers that Congress has not granted.
Smoot-Hawley Tariff Act and the Reciprocal Trade Agreements Act (1930–1934)
June 1930 – June 1934
What Happened
Congress passed the Smoot-Hawley Tariff Act in 1930, raising duties on over 20,000 imported goods despite a petition from 1,028 economists urging a veto. Trading partners retaliated, and U.S. exports fell 61% in three years. In 1934, Congress passed the Reciprocal Trade Agreements Act, delegating tariff-setting authority to the president to negotiate reductions — the origin of modern presidential trade authority.
Outcome
Short Term
Global trade collapsed. Senator Smoot and Representative Hawley both lost their seats.
Long Term
Congress effectively surrendered direct control over tariff rates, creating the broad presidential trade authority that persists today — and that the IEEPA case now constrains.
Why It's Relevant Today
The IEEPA ruling is the most significant judicial check on presidential tariff authority since Congress delegated that power 90 years ago. The 1934 delegation created the system; the 2026 ruling defined its outer boundary.
