Editor’s note: There has been a new tariff development this week. The Trump Administration proposed new tariffs Tuesday night of at least 10% on 60 trading partners that had failed to enforce laws prohibiting imports made with forced labor.
Key Takeaways:
- More than $20.6 billion in IEEPA tariff refunds have been completed and transmitted to importers, with $85 billion accepted for processing, according to a May 27 CBP court filing.
- The government’s May 29 appeal does not stop the CAPE refund system, according to an attorney SESO spoke to. It targets only one narrow category of entries that have already finally liquidated with no protest filed.
- If you have not filed a CAPE declaration or administrative protest, act now. Tariff attorney Chris Duncan of Squire Patton Boggs says the window is narrowing and the steps are simpler than most companies realize.
Tens of billions of dollars in tariff refunds are actively being deposited into importer bank accounts, and the process is largely working as intended. But a new legal dispute between a federal judge and the government is creating confusion about what comes next, and some companies may be running out of time to act.
Chris Duncan, an attorney who worked at U.S. Customs and Border Protection (CBP) for 16 years and now handles customs issues in private practice at Squire Patton Boggs, spoke with Shop Eat Surf Outdoor this week to cut through the noise.
The short version: If you have filed a declaration with CAPE, the Consolidated Administration and Processing of Entries system built by CBP to handle refund claims, or an administrative protest, you are on track. If you have done neither, the window is narrowing and you need to act now.
Where Things Stand
Following the Supreme Court’s February 20 ruling that struck down the IEEPA tariffs as unlawful, Judge Richard Eaton of the U.S. Court of International Trade was put in charge of every case challenging those tariffs. He ordered a full refund of all tariffs paid, including interest, and allowed the government to build a new refund system to process claims efficiently.
That system has been working. According to news reports, approximately $85 billion in refunds has been accepted for processing through CAPE and $20.6 billion has been fully completed and transmitted. Duncan’s clients, including large importers, have received millions of dollars back plus the statutory approximately 7% interest that accrues daily from the original payment date.
“A lot of importers, big importers that had the resources to get right on it, have already gotten millions and millions of dollars back plus interest,” Duncan said.
What the Dispute Is Actually About
Tariff attorney Chris Duncan of Squire Patton Boggs. Photo courtesy of Squire Patton Boggs.
The friction that made headlines on May 29 is narrower than it sounds. The government notified the court it intends to appeal one specific part of Judge Eaton’s order, involving what are called “finally liquidated” entries.
Here is how that works. When a company imports goods, the entry is finalized, or “liquidated,” 314 days after arrival. After liquidation, the importer has 180 days to file a protest if they want to challenge the duties paid. Once that 180-day window closes without a protest, the entry is “finally liquidated” and under normal rules can never be adjusted, even if the government made an error.
Judge Eaton ordered refunds even for those finally liquidated entries. The government says it does not have the legal authority to do that without a separate court order for each individual importer. The judge disagrees, has demanded the CBP commissioner appear in his courtroom in person this month to answer for it, and has rejected the government’s attempt to send a lower-ranking official instead, according to Duncan.
Duncan said this standoff was always coming.
“We knew the rubber was eventually going to meet the road,” he said. “It was going to be no more Mr. Nice Guy between customs and the judge. We have now reached that point.”
Importantly, the government is not appealing the CAPE system itself or the broader refund obligation. And Customs is still processing refund declarations through CAPE. The appeal is only over this category of entries where the protest period has already expired with no action taken.
“The only part that’s being challenged is this part about the finally liquidated entries,” Duncan said. “You can still file with CAPE, you can still file protests, you can still do all those things you could do before.”
Who Is Actually Affected
For most regular importers, Duncan says this dispute is not their problem, because they had ample time to act before their entries reached so called “finally liquidated” status.
The earliest IEEPA tariffs went into effect in February 2025. On the normal 314-day liquidation schedule, the first entries began liquidating in December 2025. The 180-day protest window on those entries did not close until May 2026. Anyone who either filed a CAPE declaration or filed an administrative protest during that span is covered.
The companies most at risk for the finally liquidated problem are large express shippers like FedEx and UPS, which process thousands of small informal entries on behalf of individual consumers. Those entries often liquidated quickly, no one filed protests on them because the individual amounts were small, and now they sit in the disputed category.
For smaller brands and importers in the surf, outdoor and action sports space, the risk is more straightforward: if you have not taken action and have not filed a CAPE declaration or a protest, some of your entries may now be finally liquidating on the normal schedule.
“If you paid tariffs in February and you did nothing, you didn’t do CAPE and you didn’t do protest, yeah, those entries are finally liquidating on the normal schedule,” Duncan said.
What You Should Do Right Now
Duncan’s guidance is straightforward. First, determine which category your entries fall into.
If your entries are still unliquidated or recently liquidated within 80 days, file a CAPE declaration through the CBP ACE portal now. Also make sure your company is registered for ACH electronic payments in the ACE system. The government will not mail paper checks, and a missing ACH setup means your refund gets rejected and you forfeit the interest.
If your entries are not CAPE-eligible but the 180-day protest window is still open, file an administrative protest with CBP. This is a routine administrative filing, not a lawsuit. A customs broker or attorney can easily handle it, and in many cases a company can file it internally.
“It is fairly easy to do,” Duncan said. “It’s not a legal filing; it’s an administrative filing with customs that is very common.”
“The thing you should not do is let your entries finally liquidate without having challenged the IEEPA tariffs,” Duncan added. “Because if you do that, you’re in this universe of entries that is the heart of this battle.”
Watch the Section 122 Tariffs Too
Duncan also flagged a parallel situation developing with Section 122 tariffs, which the Trump administration imposed after the IEEPA tariffs were struck down. Those tariffs, which are set at 10% and are capped at 150 days by statute, have also been challenged in court and found unlawful by the Court of International Trade, though that decision is now on appeal. The 150-day deadline falls in July.
His advice for the 122 tariffs mirrors what he told importers from the start on IEEPA: do not file a lawsuit because cases are already in court and going through the appeals process. Instead, track your liquidation dates, and file protests before entries finally liquidate if the U.S. Supreme Court has not yet issued a final decision.
“Everybody should be doing exactly the same thing,” Duncan said.
What Companies Are Doing with the Money
Duncan said his clients who have received refunds are handling the money in a range of ways. Some are keeping it. Some have formulas for passing a portion back to their customers. Some are in active litigation with customers over who is entitled to what.
Nearly all of them are also doing something Duncan had not seen before in his years handling customs law: writing new contract language to address what happens in the future if tariffs are imposed and later invalidated.
Because the IEEPA situation was unprecedented in its scale and public visibility, customers began asking for their share of refunds in a way that has never happened in prior, smaller duty disputes.
“The smart thing is to put it into a written agreement so you don’t have to figure it out later in court,” Duncan said. “It’s already decided mutually.”
With Section 122 tariffs following the same legal trajectory as IEEPA, Duncan says the window to get that contract language in place is now.
