By: John A. Howell
The Supreme Court’s February 20, 2026, ruling on tariffs is estimated to significantly affect approximately 300,000 businesses across the United States.
This comprehensive Client Alert addresses the decision and its potential implications.
The $175 billion question: How do we get our tariff refund?
As is well known, on February 20, 2026, the Supreme Court invalidated President Trump’s tariffs promulgated under the International Emergency Economic Powers Act (“IEEPA”). Despite the enormous sums involved, the court did not address the issue of tariff refunds. So, what’s the procedure for claiming refunds? Although the process remains partially unsettled, Judge Richard Eaton of the U.S. Court of International Trade (“USCIT”) provided some much-needed clarity in an order issued on March 4, 2026. In that order, Judge Eaton directed Customs and Border Protection (“CBP”) to liquidate all unliquidated customs entries subject to the IEEPA tariffs without regard to the IEEPA duties. He also directed CBP to reliquidate any liquidated entries for which liquidation is not final (i.e., entries that can still be protested in the 180-day period following liquidation) without IEEPA duties. On March 6, 2026, and in response to a CBP representation that an automated tariff refund process could be available in 45 days, Judge Eaton issued a follow-on order directing CBP to provide a “short report” to him by March 12, 2026, describing the agency’s progress in implementing a refund process that includes interest payments.
Judge Eaton’s March 4th order suggests importers that have not filed suit at the USCIT will not have to do so to collect their tariff refunds, presuming that liquidation is not final. In that order, Judge Eaton stated that “[a]ll importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources [Supreme Court] decision.” Thus, we anticipate a streamlined refund process that does not require importers to file suit. In a March 6 court filing, CBP stated that it “is making all possible efforts” to ensure the requisite functionality for refunds is available in 45 days. In CBP’s March 12 “short report” – undoubtedly the first of many – CBP stated that it is developing a “new capability” within its Automated Commercial Environment (ACE). This new capability – which CBP terms the Consolidated Administration and Processing of Entries (“CAPE”) – will have 4 integrated components (claim portal, mass processing, review and liquidation/reliquidation, and refund). CBP estimates these components are anywhere from 40% to 80% complete, although CBP hedges its bets by noting it “anticipates a phased development for CAPE, beginning with the basic functionality outlined above, and adding more functionality in subsequent phases to address more complicated scenarios.”
We emphasize the following points:
1) Proliferation of Lawsuits
Over 2,000 companies – including Costco Wholesale Corporation (“Costco”), Federal Express Corporation, Revlon Consumer Products LLC, Bausch & Lomb Incorporated, PRADA USA Corp., and L’Oreal USA Products, Inc. – have sued in the USCIT to recover tariffs paid under IEEPA. (Under the Supreme Court’s ruling, the USCIT is the exclusive forum for such suits.) Costco was one of the first companies to file suit (in November 2025), but in the wake of the Supreme Court decision, many other companies have filed suit in the weeks after the decision. With the benefit of 20-20 hindsight, it is questionable whether these companies actually had to file suit.
2) USCIT Role
Initially, it was unclear how the USCIT would address the flood of refund lawsuits, although the USCIT had already shown a willingness to consolidate cases. Consolidation makes sense, given that liability is clear and only the refund calculations differ between the importers. Judge Eaton stated in his March 4 order that the chief judge of the USCIT has “indicated” that only Judge Eaton will hear cases pertaining to the IEEPA tariff refunds. Given this development – and Judge Eaton’s inclination that CBP handle the refund process and that it be available to all importers, not just those that have filed lawsuits in the USCIT – it will presumably be unnecessary for the USCIT to establish a protocol for handling the cases that involves appointing a steering committee (much like the process in multidistrict litigation). For what it’s worth, the USCIT established a similar process following the Supreme Court’s 1998 decision invalidating the Harbor Maintenance Tax, which involved a relatively paltry several hundred million dollars.
3) Department of the Treasury/Customs and Border Protection Role
As with all tariffs, the IEEPA tariffs have been collected by CBP, a component of the Department of the Treasury. Again, given Judge Eaton’s March 4 order, we expect that CBP will establish a simplified automated refund process that does not require importers to sue in the USCIT.
4) Position of the Department of Justice
In the lower-court litigation leading up to the Supreme Court decision, the Department of Justice (“DOJ”) repeatedly represented that – should the Supreme Court invalidate the IEEPA tariffs – the DOJ would not challenge importers’ entitlement to refunds. Presumably this would include not objecting to an importer’s entitlement to a refund on the basis that the importer passed on the tariff expense to its customers (a potential standing issue).
5) Possibility of Legislative Action
The USCIT litigation process could be reinforced by legislation. Over twenty Democratic senators have already introduced legislation that would require CBP to refund the collected tariffs within 180 days, but importers should not rely on such legislation being enacted.
6) When Can We Get Our Refund?
Unfortunately, no time soon. Our best guess: at a minimum, several months. Worst case, and assuming substantial technical impediments: a year or more. Again, for what it’s worth, in the Harbor Maintenance Tax parallel, some companies reportedly waited for two years to get refunds.
7) Will We Get a Refund?
Yes, certainly with respect to entries for which liquidation has not been finalized; i.e., for which the 180-day protest period has not expired – the real question is when, not if.
8) How Tough Will It Be to Prove Our Refund Amount?
Probably not very – CBP instructs importers to itemize the tariff calculation on the entry summaries submitted to CBP, although not all importers do so.
9) Really, Do We Actually Need to Sue in the USCIT at This Stage? Or, to put it another way, can over 2,000 importers and their generally high-priced counsel be wrong?
Notwithstanding Judge Eaton’s intent to craft a procedure that obviates the need to file suit, this remains an open question. Fundamentally, the decision as to whether to sue is a business decision based on the magnitude of a company’s potential refund compared to the expense of litigation and, further, the importer’s appetite for “gambling” on a broad USCIT-administered refund protocol, CBP relief, and/or legislative relief. While suit may well prove to be unnecessary, we believe that the safest course of action is to file suit in the USCIT. Our rationale is as follows: CBP ordinarily liquidates tariffs (i.e., “finalizes” the provisional tariff duty) 314 days after the entry of the goods, so, as the days roll on, an importer’s tariff obligations are constantly liquidated. While an importer can protest a liquidation within 180 days after liquidation, an importer may want to prevent the Government from potentially relying on the strict time limits and procedural requirements in CBP’s rules to attempt to defeat the importer’s refund claim, which would be extinguished after the 180-day period. Thus, “early litigants” such as Costco – which, as noted, filed suit in the USCIT last November – did so to preserve their refund claims since liquidations under the IEEPA tariffs were beginning. Obviously, suit will be unnecessary if Judge Eaton establishes a refund protocol that also covers liquidations that have become final; i.e., liquidations for which the 180-day protest period following liquidation has expired.
10) Will We Get Interest On Our Refund?
Yes, per statutory requirements and Judge Eaton’s follow-on March 6, 2026, order.
11) Do President Trump’s “Substitute Tariffs” Affect This Analysis?
No, the ten and soon-to-be fifteen-percent tariffs that President Trump ordered under section 122 of the Trade Act of 1974 (“balance-of-payments tariffs”) – and any other non-IEEPA tariffs that the president may order – are completely unrelated to this analysis.
This situation is extremely fluid and volatile, and we will continue to monitor developments closely. We strongly advise affected companies to do the same and to consult counsel about their legal rights. Halloran Sage can advise importers throughout the refund process and can represent them in filing lawsuits in the USCIT to protect their rights. For assistance, please contact John Howell in our Washington, D.C., office or Suzanne Scibilia in our Middletown office.