IEEPA Tariff Refunds: Phase III Delayed, Legal Action Now Needed
Phase III of IEEPA tariff refund processing delayed; importers must consider legal action.
Why it matters: Importers and legal advisors must adjust strategies due to delays and new legal requirements for final refunds under IEEPA regulations.
- U.S. Supreme Court invalidated IEEPA-based tariffs in February 2026.
- CBP’s CAPE system manages tariff refund processing in three phases, with Phase III delayed as of August 2026.
- $132.5 billion in refund claims accepted, $106.6 billion paid to the Treasury so far through CAPE.
- Importers need to file suits in the U.S. Court of International Trade for refunds on finally liquidated entries, per recent court guidance.
On February 20, 2026, the U.S. Supreme Court ruled that President Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs was unlawful, nullifying the 'Liberation Day' tariffs enacted in April 2025. In response, U.S. Customs and Border Protection (CBP) created the Consolidated Administration and Processing of Entries (CAPE) system to handle refund claims from importers affected by these tariffs, as detailed in industry analyses from Kiplinger and JM Rodgers.
The CAPE refund process is divided into three phases: Phase 1 started in April 2026 targeting unliquidated entries; Phase 2 began on June 29, 2026, covering reconciliation entries; and Phase 3, addressing finally liquidated entries, remains delayed due to additional system validation requirements, with no new launch date set as of August 25, 2026. CBP has processed approximately $132.5 billion in claimed refunds so far, with $106.6 billion disbursed to the U.S. Treasury, according to JM Rodgers.
Crucially, recent guidance from the U.S. Court of International Trade (CIT) informs importers that relying solely on CAPE for refunds of finally liquidated entries is insufficient. Importers must now pursue lawsuits in the CIT to recover these amounts, as noted by the legal team at Arnall Golden Gregory LLP. This legal step has become essential given the CAPE delay and reflects the evolving compliance landscape under IEEPA.
Payments continue on a rolling basis for eligible entries processed through CAPE phases 1 and 2, with many refunds expected within 60 to 90 days of acceptance, according to 721 Logistics. Importers and their legal counsel should monitor CBP updates closely and prepare for possible litigation to protect their refund rights.
By the numbers:
- $132.5 billion — certified refunds accepted by CBP as of August 21, 2026
- $106.6 billion — duties and interest paid to U.S. Treasury to date
- April 2026 — launch of CAPE Phase 1
- June 29, 2026 — launch of CAPE Phase 2
- August 25, 2026 — ongoing delay of CAPE Phase 3 with no rescheduled date
Yes, but: While CAPE continues to process and pay many refund claims, the lack of a Phase 3 launch means importers must consider litigation for final refunds, complicating recovery efforts.
What's next: Watch for CBP announcements on CAPE Phase 3 relaunch and ongoing guidance from the U.S. Court of International Trade on litigation for finally liquidated entries.