Preserving IEEPA Duty Refund Rights: To Sue or Not to Sue?
Hundreds of thousands of U.S. importers could see hundreds of billions of dollars in refunds of duties paid under President Trump's sweeping second-term tariffs imposed last year on most imported goods under the International Emergency Economic Powers Act of 1977 (IEEPA). On November 5, 2025, a skeptical U.S. Supreme Court heard oral argument in Learning Resources, Inc. v. Trump, and will decide before the end of the Court's term in June whether to affirm the rulings of two lower courts that at least some, if not all, of these IEEPA tariffs are unlawful, thus allowing importers that paid duties under those tariffs to seek refunds. In this advisory we discuss when and how your company should consider acting, through invoking administrative and judicial processes, to preserve any rights to refunds it may have.
Who Would Be Eligible for Refunds?
By law, a party registered as the "importer of record" must take reasonable care to estimate the tariffs applicable to its imports, and generally must deposit those tariffs with U.S. Customs and Border Protection (CBP) when importing the goods, a process known as "entry." As we advised, as early as February 4, 2025, President Trump by executive order invoked IEEPA—whereunder the President, "by means of instructions, licenses, or otherwise," may "regulate … importation" of certain property, 50 U.S.C. § 1702(a)(1)(B), to deal with a foreign threat declared in the executive order to constitute a national emergency—to impose tariffs on goods from: (1) China, Canada, and Mexico for their alleged roles in facilitating fentanyl trafficking or illegal immigration (the "trafficking tariffs"); (2) nearly all countries intending to balance trade deficits (the "reciprocal tariffs"); (3) Brazil in response to the prosecution of its former president; and (4) India as a penalty for importing Russian oil during the war in Ukraine. According to a recent court filing by the U.S. Department of Justice (DOJ), as of December 10 over 34 million entries of goods subject to just the trafficking and reciprocal tariffs have been made by more than 301,000 importers of record, resulting in estimated additional duty deposits of approximately $129 billion.
If your company has acted as the importer of record when bringing any goods into the United States since 2025, it likely has paid IEEPA duties on those imports and may be eligible to recover them should the Supreme Court agree with the lower courts and strike down the tariffs. The data needed to confirm whether an importer has paid any IEEPA duties, and how much it has paid, is easily accessible through CBP's Automated Commercial Environment (ACE) portal, where each IEEPA tariff is identified by a unique code of the Harmonized Tariff Schedule of the United States (HTS) on a separate line item with the amount paid. Where parties that have not acted as the importer of record wish to seek recovery for duties that were passed downstream to consumers as price increases or upstream to manufacturers as discounts, only private remedies would be available.
How Can an Importer Preserve Refund Rights?
While the courts, Congress, or CBP itself ultimately may dictate a new method by which importers should seek refunds in the event of a favorable ruling, importers, for the time being, should consider following existing law to preserve their right through the CBP administrative challenge process and by going directly to court. As we have explained, after entry CBP confirms the accuracy of the deposited duties, concluding in a process known as "liquidation." Liquidation must occur within one year of the entry date—and in practice usually occurs 314 days following entry—unless extended for up to four years by CBP or upon the importer's request. Before liquidation, an importer may file a "post-summary correction" to make any changes in the entry declarations. At liquidation, CBP will issue to the importer of record a refund of any overpayment or a bill for any underpayment. Any decision by CBP in the liquidation process become final after 180 days unless the importer challenges it through an administrative protest that, if denied by CBP, can be the basis for a court challenge within another 180 days in the U.S. Court of International Trade (CIT) under its 28 U.S.C. § 1581(a) jurisdiction or, if granted, can result in a refund. Alternatively, at any time within two years of entry, the importer may elect to file a case directly in the CIT under its 28 U.S.C. § 1581(i) jurisdiction for challenges that are "nonprotestable," meaning not within CBP's power to decide, such as the legality of imposed tariffs. Case law provides that only one course of action is appropriate at a given time.
On December 15, 2025, the CIT provided some guidance on how importers can proceed pending issuance of the Supreme Court's decision. In AGS Co. Automotive Solutions v. CBP, a consolidated § 1581(i) case brought by several businesses also alleging the tariffs were unlawful and refunds are due, the CIT issued an opinion denying importers a preliminary injunction against liquidation of entries on which they paid IEEPA duties. The court explained that the collection and assessment of IEEPA duties are not CBP decisions subject to protest, but rather nonprotestable actions taken pursuant to executive orders. Therefore, according to the CIT, the only method by which to preserve refund rights until the Supreme Court holds the tariffs unlawful, even for liquidated entries, is to file a timely case in the CIT. The court made clear that it would have the power to order the reliquidation of entries with refunds of the IEEPA duties if the Supreme Court decides in the importers' favor, especially given that the government "made very clear—both in this case and in related cases—that [it] will not object to the [c]ourt ordering reliquidation of plaintiffs' entries subject to the challenged IEEPA duties if such duties are found to be unlawful." We remind readers that the CIT's ruling may be appealed, with lingering uncertainty during the appeals process over whether the CIT does indeed have such power. Later, on December 23, the CIT issued an administrative order staying nearly one thousand similar cases and any future such cases pending in the court as it "expects to determine the appropriate next steps for resolution of the new IEEPA tariff cases following a final, unappealable decision" by the Supreme Court.
Awaiting both any appeal of the December 15 CIT decision and issuance of the Supreme Court's underlying decision on the tariffs themselves, importers that would be eligible for refunds should consider carefully whether to file protests on liquidated entries, to file a case in the CIT, or both. As noted, the CIT has clarified that the only avenue by which to proceed until a Supreme Court ruling is through a § 1581(i) case. However, the CIT did not address the proper method for seeking refunds following the Supreme Court's ruling. One would assume that a protest would be required at that time, but it is possible that the DOJ could argue, and the CIT might agree, that even once the tariffs are held unlawful CBP's action would be still nonprotestable, requiring importers to seek relief in court directly. The most conservative, "belt-and-suspenders" approach would be to proceed on both tracks, but factors to consider include the number of entries and amount of duties in controversy (including any anticipated future entries), the liquidation status of those entries, litigation costs, the benefits of court supervision of the refund process, and any publicity that would arise from seeking judicial relief. For instance, an importer with more and earlier entries might wish quickly to subsume all its imports under one § 1581(i) case before the Supreme Court makes its decision, whereas a company with fewer, more recent entries might wait to file protests.
How Did We Get Here?
Many small businesses and state attorneys general challenged the use of IEEPA to impose tariffs. The case before the Supreme Court is a consolidation of two separate cases: (1) Learning Resources, Inc. v. Trump from the U.S. District Court for the District of Columbia, and (2) Trump v. V.O.S. Selections, Inc. from the U.S. Court of Appeals for the Federal Circuit. In V.O.S. Selections, the Federal Circuit en banc held seven-to-four that "IEEPA's grant of presidential authority to 'regulate' imports does not authorize" the trafficking and reciprocal tariffs specifically, but vacated a permanent injunction set by the U.S. Court of International Trade (CIT) below. A four-judge concurrence stated "that IEEPA does not authorize the President to impose any tariffs." In Learning Resources, the district court granted but later stayed a preliminary injunction against all of the IEEPA tariffs, holding that, like the V.O.S. Selections concurrence, "[t]he statutory phrase 'regulate … importation,' as used in IEEPA, does not encompass the power to tariff." The Learning Resources plaintiffs petitioned the Supreme Court for review before the appeals court could issue judgment. The court granted review on the questions of whether IEEPA authorizes tariffs, including the trafficking and reciprocal tariffs specifically, and, if so, whether it unconstitutionally delegates legislative authority to the President. The cases since filed, currently stayed in the CIT, largely seek the same relief sought in V.O.S. Selections.
After oral arguments were held, the consensus among your authors and most judicial observers is that the tariffs, to some extent, are unlikely to survive the Supreme Court's review. Justices from both the liberal and conservative wings made pointed questions to the government evidencing their discomfort with the government's position that Congress would or could grant such unbounded power to the President. The Supreme Court returns from its winter recess on Friday, January 9, and should issue its decision before the end of the Court's term in June.
DWT's experienced International Trade, Investment & National Security team can help importers decide the best course of action and represent them before CBP and in court to protect their rights to refunds and collect those refunds in the event of a favorable court ruling. Please let the authors know if you have any questions or need assistance.