U.S. Customs Says It Needs Time to Refund Tariffs

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Written by John Egan for IIR News Intelligence (Sugar Land, Texas)

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Summary

A federal trade court was told March 6 that it would take about 45 days to reconfigure the systems and processes used by U.S. Customs and Border Protection before it could begin making refunds totaling about $166 billion, plus interest, of tariffs that were wrongfully collected under President Donald Trump's executive order last April.

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CBP to Change Systems, Processes Before Refunds

Importers, mark your calendars. Late April is the earliest that the U.S. Customs and Border Protection (CBP) can finish changing its systems and processes so it can begin refunding tariffs, with interest, that were collected under a presidential executive order that the U.S. Supreme Court ruled unlawful last month.

Last Friday, Brandon Lord, executive director in the Trade Programs Directorate in the Office of Trade at CBP, told the U.S. Court of International Trade (CIT) that about 330,000 companies had paid a total of about $166 billion in IEEPA tariffs over the last year. But immediately refunding those funds, along with interest, would require reprograming CBP's systems and revamping its processes, which would take about 45 days.

In an earlier order, CIT Judge Richard K. Eaton told the agency to immediately begin refunding tariffs collected over the last year under the International Emergency Economic Powers Act (IEEPA) and to halt all collection of IEEPA tariffs. For more on that, see March 6, 2026, article - Trade Court Rules Importers are Due U.S. Tariff Refunds, With Interest.

Eaton's sweeping order covered not only the named plaintiff, Atmus Filtration Incorporated, or the 2,000 or so other plaintiffs that have sued the Trump administration for a refund of tariffs they had already paid. Instead, he ordered refunds to all importers that paid the IEEPA duties.

Eaton's March 4 order followed the president's 6-3 loss at the U.S. Supreme Court last month. The majority wrote that Trump had exceeded his authority in levying the tariffs because the power to tax belonged exclusively to Congress. For more on that, see February 20, 2026, article - Supreme Court Rejects Trump Tariffs under IEEPA.

In his March 4 order, Eaton scheduled a private hearing for March 6 at which he wanted an update from the government about the status of the IEEPA refunds. In an affidavit filed last Friday with the court, Lord said CBP doesn't have the systems and processes to immediately stop collecting IEEPA tariffs or begin making refunds right away, as ordered by Eaton. Lord said changes in the systems and processes used by the agency could be implemented within 45 days, or by late April, after which time refunds can begin.

Heavy Burdens on CBP

Eaton's March 4 order imposed technological and administrative burdens that CBP could not meet if it were to continue carrying out its other responsibilities, Lord said. Each week the agency finalizes hundreds of thousands of import entries. Importers pay estimated duties when overseas goods come into the U.S. Those duties go through a variety of processes before final payments or refunds are due, typically within about 314 days from the day they were imported.

Decisions by the nation's high court and Eaton meant that "CBP is now facing an unprecedented volume of refunds," Lord continued. "Its existing administrative procedures and technology are not well suited to a task of this scale and (would) require (4.4 million man-hours of ) manual work."

Hence, the agency can neither immediately stop collecting IEEPA tariffs nor begin making refunds to importers right away. Lord said the agency does not have the capabilities or resources to perform those tasks immediately. He also said the agency also does not have the ability to easily determine which imports currently going through the process of finalization of duties are subject to IEEPA tariffs and which are not.

He said the agency's systems and processes can be reconfigured to comply with Judge Eaton's orders in 45 days. Although no written order was released publicly, news reports suggest the judge was satisfied with CBP's timeline. A source at the court told Reuters the March 6 hearing was not public because it was a "settlement" conference.

Trump Remains Committed to Tariffs

On several occasions, the Trump administration has unsuccessfully defended its use of IEEPA to levy tariffs. One of those losses took place last year at the CIT. Judge Eaton will be the only CIT judge hearing cases involving the IEEPA tariffs. The Trump administration is expected to appeal Eaton's March 4 order. It has 60 days to file an appeal with the U.S. Court of Appeals for the Federal Circuit.

Following the Supreme Court's decision on February 20, the president immediately invoked a different legal authority, Section 122 of the Trade Act of 1974, to impose a 10% tariff on most imports, threatening to raise it to 15%, the maximum allowed by that trade law. Those tariffs can stand for 150 days unless extended by Congress. Some legal observers have questioned whether that was lawful. For more on that, see February 27, 2026, article - Initial Reaction to New Tariffs Muted as Lawyers Assess Legality.

Key Takeaways

• On March 6, a federal trade judge was told it would take 45 days to reconfigure the systems and processes used by U.S. Customs and Border Protection in order to refund about $166 billion, plus interest, in tariffs that about 330,000 importers have paid under the International Emergency Economic Powers Act over the last year.
• In an earlier decision, that trade court ordered refunds paid to all importers that had paid the IEEPA levies.
• The U.S. Supreme Court last month ruled that the Trump administration unlawfully used that 1970s-era law to levy duties of varying amounts on nearly all imported goods from all countries.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).