17 Oct
2026
The refund of tariffs collected under an emergency-powers law the Supreme Court said never authorized them has moved into its hardest phase. On October 6, U.S. Customs and Border Protection was scheduled to open Phase 3 of its CAPE refund process, the stage meant to reach importers whose entries were already finally liquidated before the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act. The first two phases moved enormous sums. This one is narrower, more legal and far less forgiving of paperwork gaps.
For any business that imported goods during the IEEPA tariff period, including small brands that bought through brokers and never thought of themselves as "importers," the details of Phase 3 decide whether money comes back or stays with the government.
On February 20, 2026, the Supreme Court held in Learning Resources, Inc. v. Trump, decided together with Trump v. V.O.S. Selections, that "IEEPA does not authorize the President to impose tariffs," as summarized by Corporate International. The administration moved quickly to a different authority. According to Thomson Reuters' regulatory analysis, a 10% Section 122 surcharge took effect on February 24 for a statutory maximum of 150 days, which ran out on July 24. Corporate International reports that new Section 301 duties took effect the same day across 60 economies and were challenged at the Court of International Trade on day one.
That sequence matters because the refund question is only about the IEEPA duties. Tariffs collected under other authorities are not part of CAPE, and the broader tariff environment remains in flux.
CBP's refund machinery, called CAPE (Consolidated Administration and Processing of Entries), has already processed a staggering volume. According to C.H. Robinson's summary of a CBP court declaration:
That last line is the most avoidable loss in the entire process. Corporate International notes that refunds go out by ACH to a U.S. bank account and CBP issues no paper checks. A company can be fully entitled to money and still not receive it because nobody updated a portal.
The first two phases were broadly accessible. Phase 1 opened April 20 for unliquidated entries and entries within 80 days of liquidation; Phase 2 opened June 29 for certain reconciliation-flagged entries. Any importer of record or its broker could file.
Phase 3 is different. It covers finally liquidated entries that are subject to a court-ordered reliquidation, and only for eligible plaintiffs. Cherry Bekaert explains that the refunds stem from IEEPA litigation pending at the Court of International Trade, including Freestyle World, Inc. v. U.S. CBP. The phase was originally set for August 20 and was postponed; on August 27, Judge Richard K. Eaton ordered CBP to provide an update, and on September 15 CBP filed a declaration confirming the October 6 launch.
The eligibility conditions are strict. Plaintiffs needed to have provided a valid importer of record number to CBP by July 30, 2026 to file from day one, and later filers must wait for further CBP instructions. CBP estimates about $11.4 billion, or 6.9% of the total, is at stake in this phase. Importers with finally liquidated entries who have not filed suit appear to remain outside this path for now, according to Cherry Bekaert.
Here is the uncomfortable reality. Roughly 93% of the money at stake flowed through an administrative process. The final slice requires a lawsuit. Coppersmith Global Logistics advised that importers with finally liquidated entries would need to file a lawsuit at the CIT under 28 U.S.C. 1581(i) to pursue this path, and warned that if the government wins its appeal on universal refund orders, non-litigating importers may permanently lose the ability to recover those duties. The same analysis says statute of limitations deadlines for some entries begin approaching as early as February 2027.
Large importers have trade counsel on retainer and will treat this as a routine filing. Small ecommerce brands that imported a few containers or relied on a freight forwarder are the ones most likely to discover too late that their entries liquidated, their protest window closed, and their claim now requires litigation. That is a structural tilt in favor of companies with legal departments, and it is worth naming.
Drawing on the guidance from Cherry Bekaert and Coppersmith, any business that paid IEEPA duties should work through these steps now:
One more point: only the importer of record can receive an IEEPA refund. Consumers and downstream buyers cannot claim from CBP. If you bought goods landed and duty-paid from a supplier, any recovery depends on your contract with that supplier, not on CAPE.
Tariff refunds are not just a back-office cleanup. For a brand that absorbed IEEPA duties into its margins in 2025, a refund with interest is real cash that can fund inventory, pay down debt or offset the newer duties now in force. It also raises a fair question about pricing: many sellers passed tariff costs to customers, and the refund lands with the importer, not the shopper.
The bigger lesson is about readiness. CAPE rewarded businesses that knew their entry data, had current ACH details and moved quickly. Phase 3 rewards those who took legal steps early. With some statute of limitations deadlines approaching as early as February 2027 and an appeal on universal refund orders still unresolved, the window for passive importers is closing. If you paid these duties and have not yet mapped your entries, this is the month to do it.
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