Notice to Cargo Owners: Potential for Tariff Refunds and Key Points

The White House claims that new tariffs have generated over $150 billion in revenue so far this year, but some funds could be refunded if the Supreme Court's hearing in November goes unfavorably.

On November 5, the Supreme Court will hear oral arguments on whether President Donald Trump's use of the International Emergency Economic Powers Act (IEEPA) is legal. Previously, two lower courts ruled the tariffs unlawful, and the Supreme Court agreed in September to take up the case.

At that time, Treasury Secretary Scott Bessent said that if the Supreme Court upheld the lower court rulings, the U.S. would need to refund about half of the tariff revenue.

"If the court rules that way, we have to execute it," Bessent said on NBC's "Meet the Press" on September 7.

Potential unprecedented action

Although Bessent's statement seems simple, as companies await the Supreme Court's ruling, there is much uncertainty about how the refund process would unfold or how companies should prepare.

"I'm not entirely sure he understood the significance of what he was saying at the time—no pun intended," said Alexander Schaefer, a partner in the international trade group at Crowell & Moring.

Experts told Supply Chain Dive that if Trump's use of IEEPA is ruled invalid and refunds become necessary, only duties paid under the relevant tariffs would be eligible for refund. This includes tariffs Trump imposed on imports from Canada, Mexico, and China citing fentanyl trafficking, as well as a set of country-specific tariffs finalized by the U.S. in August. According to a PwC analysis, these tariffs could bring in total revenue of up to $108 billion this year by the end of October.

Given the broad impact of these tariffs, U.S. Customs and Border Protection (CBP) could face an unprecedented wave of refund claims if ordered by the court to refund, said Greg Tompsett, vice president of customs at Kuehne + Nagel in the U.S.

"This would be more than 100 times the volume they've handled before," Tompsett said.

Despite the massive potential refund scale, the timeline remains unclear, especially as multiple experts expect the Supreme Court to remand the case to lower courts. Given the complexity of overturning the tariffs, a negotiated timeline could result, during which the government would determine the refund process.

"It won't be that the Supreme Court rules in December and you get a refund check in January," said Justin Angotti, a lawyer in the global regulatory investigations and enforcement group at Reed Smith.

How do tariff refunds typically work?

Applying for tariff refunds is routine for shippers. According to experts, there are usually two main ways, and regardless of which (or other methods), only the importer of record is eligible for a refund.

The first method is to file a post-summary correction with CBP during the "liquidation period" after goods enter the U.S. During this roughly 300-day period, companies can amend or adjust the initial documentation of individual entries. CBP may also request additional information during audits or reviews.

If CBP believes it has collected all necessary information, the liquidation period may end early. Conversely, the liquidation period can be extended one year at a time, up to three years, said Josh Kurland, partner in the global regulatory practice at Hogan Lovells.

If the liquidation period has passed, companies can take another refund route: filing a formal protest with CBP within 180 days after the liquidation period ends. Typically, protests involve importers claiming they were assessed an incorrect duty rate and requesting customs to correct it, said Schaefer of Crowell & Moring.

However, for IEEPA tariffs, Schaefer said CBP may be less receptive to protests because these tariffs were not implemented through customs decisions.

"I worry that if people just file administrative protests, CBP will say: 'Look, we didn't make a decision. We didn't decide anything. The White House ordered us to collect, and we collected. Your grievance should be with them, not us,'" Schaefer said.

If CBP does determine a refund is due, resolution could be relatively quick because the agency can transfer funds via Automated Clearing House (ACH), similar to how consumers pay bills, said Tompsett of Kuehne + Nagel.

How might IEEPA tariff refunds differ?

It is currently unclear how the refund process for IEEPA tariffs would differ from standard procedures. Experts have differing views on how things might unfold.

Mike Short, president of global freight at C.H. Robinson, envisioned two possible scenarios.

"Either customs automatically processes refunds, or it will require extra work from brokers to pursue refunds," Short said in an email to Supply Chain Dive.

An automatic process is possible because most entries are filed electronically, making it easy to verify information, said Greg Husisian, partner at Foley & Lardner. He added that if refunds become necessary, he expects CBP to issue guidance to importers on how it plans to handle them.

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"It won't be that the Supreme Court rules in December and you get a refund check in January."

Justin Angotti

Lawyer in the global regulatory investigations and enforcement group at Reed Smith.

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CBP has precedent for initiating a more automatic process based on legal challenges, namely the Section 301 tariffs on imports from China during Trump's first term.

In one case that eventually reached federal court, the U.S. government agreed to automatically refund importers if the 301 tariffs were overturned, said Schaefer of Crowell & Moring. However, in September, the Federal Circuit confirmed the legality of the 301 tariffs, rendering the refund commitment moot.

It is unclear whether Trump would adhere to a similar standard in the current legal battle. However, just this year, the government allowed refunds for tariffs that were later reduced, Angotti said. In that case, customs issued guidance instructing importers to file post-summary corrections to trigger refunds.

How importers can prepare

Just as there are differing views on how IEEPA tariff refunds would be managed, there is no consensus on how importers can best prepare to seek relief.

Kelsey Christensen, an international trade lawyer at Clark Hill, said two main schools of thought have emerged: one is for importers to request an extension of the liquidation period; the other is to allow liquidation to occur and then file protests while the case winds through the courts.

"My understanding is that CBP would place such requests in some other administrative category, knowing they will have to deal with them when all these appeals are finally resolved," Christensen said. "So as long as protests are filed on time, even if the remedy is uncertain, it should be manageable."

For companies with higher tariff exposure and more caution, seeking an extension of the liquidation period might be the better option, Angotti said.

There is also a third route: filing a lawsuit in federal court, likely the Court of International Trade.

"If you have real money at stake, I think the safe approach is to file a lawsuit like V.O.S. did," Schaefer said, referring to one of the two cases consolidated into the Supreme Court review. Schaefer added that if a lawsuit is filed, companies should ask the judge to issue an injunction to suspend liquidation until a final decision on IEEPA tariffs.

Experts said that regardless of the mechanism shippers use, they should confirm product classifications and ensure they have correct documentation, such as entry forms and bills of materials.

Companies should also have a clear understanding of the liquidation status of their entries to determine whether they can file post-summary corrections or protests when the Supreme Court rules.

Finally, companies must know which tariffs apply to which entries, as some imports may also be subject to additional duties, such as those under Section 232.

Antone Gonsalves contributed to this article.

Correction: This article has been updated to correct the spelling of Justin Angotti's name.