The next phase of tariff refunds has been “temporarily delayed” by Customs and Border Protection. The agency told the U.S. Court of International Trade on August 25 that it needs more time to make sure the system can properly process the more complicated entries covered by Phase 3.
CBP launched Phase 1 of its Consolidated Administration and Processing of Entries system, known as CAPE, in April to process refunds court-ordered refunds for tariffs collected under the International Emergency Economic Powers Act before the U.S. Supreme Court struck down those duties in February.
- The first phase of the refund process was limited to unliquidated entries and entries that were within 80 days of liquidation. CBP also allowed certain entries with a status of suspended, under review or extended, as well as warehouse entries and withdrawals.
- Phase 2, estimated to cover roughly $28.7 billion in refunds, launched on June 29 for entries marked for reconciliation due to later adjustments to value, classification, origin or other import data.
By the end of July, the U.S. government had processed more than $100 billion in refunds – more than half of the roughly $166 billion collected under IEEPA.
But CBP says it needs more time to proceed with Phase 3, which will cover finally liquidated entries for which the court has ordered reliquidation. Brandon Lord, CBP’s executive director of trade programs, told the court that the agency needs an unspecified amount of time to add new “validations” to CAPE to “ensure no other duty adjustments are made to finally liquidated entries outside of the IEEPA duty refunds.”
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The delay does not affect previous phases of the program. It does, however, highlight a sticking point in the ongoing court battle over IEEPA refunds:
- The administration says the trade court lacks the authority to issue a universal order for refunds to all companies that paid the tariffs, regardless of whether they are parties to the lawsuit that brought about the CAPE system or have filed on their own.
- The original plaintiffs have asked the court to certify a class of all importers who paid IEEPA tariffs, but the court has yet to issue a decision on the matter.
Meanwhile, 26.4 million entries have been accepted for IEEPA duty removal so far, with $132.5 billion in refunds accepted for processing and $106.6 billion sent to Treasury.
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Tariffs continue to anchor the Trump administration’s domestic and foreign policy agenda. The administration has imposed several duties under various statutes in recent weeks, including:
- New Section 301 tariffs of 10% or 12.5% on imports from 60 economies, starting July 24, based on findings that they do not adequately prohibit the export of goods produced with forced labor.
- An additional 50% tariff on many Canadian imports, including apparel, starting August 22, with no exemptions for USMCA-compliant goods, unlike previous tariffs.
The legal fight also continues. The new duties have generated fresh litigation and retaliation, triggering additional uncertainty for importers and businesses in the global supply chain.
ICYMI: US-Canada Trade Talks Collapse: 50% Tariffs Now In Effect
The same group of businesses that successfully challenged the IEEPA tariffs quickly filed suit against the Trump administration’s new Section 301 duties, and a coalition of 25 states also sued to challenge the new tariffs, arguing that “the Administration cannot use forced labor as a pretext to continue its illegal tariff scheme.”
PPAI will continue to monitor these developments and provide updates. Subscribe to PPAI Newslink to have these delivered straight to your inbox twice a week.
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