This article explains what could happen if the Supreme Court rules that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful, and — critically — how importers can protect their right to recover duties already paid. Refunds are not automatic. You must preserve your claim now.
While this is all conjecture prior to a supreme court ruling, reviewing these basics and taking tentative steps can prove invaluable. A ruling overturning these tariffs itself could establish clarification for securing a refund. Will there be a workable solution for resource constrained small to medium size companies, for example?
Brief Notes:
This information is primarily to encourage importers to discuss with their brokers and attorneys. Our team of resources can assist in this regard.
IEEPA gives the President authority to regulate commerce during declared national emergencies. If the Court finds that IEEPA (or its use to impose tariffs) lacked legal authority, duties collected under IEEPA could be declared unlawful. Historically, courts have allowed refunds in similar circumstances, but only for parties that preserved their legal rights. Having said that, this case is historical in both scale and scope so the rules this time may be different.
A liquidated entry is the final determination by U.S. Customs and Border Protection (CBP) of the duty. Once liquidated, the entry is considered legally complete. CBP normally liquidates an entry within one year of release (the entry release date).For certain cases, CBP may extend the liquidation period to 2–3 years.
Importers have 180 days from the date of liquidation to submit a request - or protest- to correct or recover duties.
The primary administrative route is the CBP protest. Importers have 180 days from the date of liquidation to file a protest. A timely protest preserves a refund claim that can be litigated in the Court of International Trade (CIT) if necessary.
Likely, many of your IEEPA related entries may already have liquidated. But it can only assist if you file a protest for those still within the 180 days.
For unliquidated entries, file a PSC and request that CBP not liquidate the entry. This does not guarantee a refund, but it can flag the entry and preserve administrative options.
Drawback programs refund duties when imported goods are re-exported or destroyed. Drawback processes do not apply to recover duties unlawfully collected.
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4. Sample protest statement
liquidate this entry. This protest is filed to preserve the importer’s rights pending judicial review of the legality of IEEPA-based duties. We request a full refund of all duties, taxes, and fees paid under this authority, with applicable interest.
U.S. Shoe Corp. v. United States — When a tax was found unlawful, exporters who filed protests recovered refunds; those who did not generally did not. The lesson: preserve the right to challenge.
If you did not preserve your claim, recovery becomes harder. Congress or CBP could create a special refund program — but that requires political will and is uncertain. A Supreme Court ruling may also clarify the rights of the importers with some further allowances. Filing a protest when possible never harms your position.
If IEEPA-based tariffs are struck down, importers who acted to preserve their rights through protests or PSCs will be best positioned to recover duties.
Do not assume refunds will be automatic. At least take the first step of identifying the IEEPA duties already paid and prepare a Post Summary Correction request.
Disclaimer: The information is provided for general information only. It is not intended as legal advice.