Trump Administration to Appeal Order to Refund IEEPA Duties on Finally Liquidated Entries
According to a motion filed in the U.S. Court of International Trade (CIT) late Friday, May 29, 2026, importers will have to file individual court actions to obtain refunds of duties they paid on finally liquidated entries under the tariffs unlawfully imposed by the President pursuant to the International Emergency Economic Powers Act of 1977 (IEEPA) if the government has its way. In its filing, the U.S. Department of Justice (DOJ) revealed that the government will appeal and seek a stay of the order issued by Judge Richard K. Eaton directing U.S. Customs and Border Protection (CBP) to refund automatically through the existing liquidation process all IEEPA duties collected, to the extent that the order requires CBP to reliquidate finally liquidated entries made by importers who have not filed suit. Meanwhile, CBP has acquiesced to the order for entries that are not finally liquidated, approving refund claims representing more than half of all IEEPA duties submitted through the new Consolidated Administration and Processing of Entries (CAPE) system.
Showdown in Court over Finally Liquidated Entries
As we advised previously, after the U.S. Supreme Court overturned the IEEPA tariffs February, on March 4 in a test case Judge Eaton ordered CBP to issue refunds of some IEEPA duties to all importers, specifically by liquidating "unliquidated entries" and reliquidating "liquidated entries for which liquidation is not final"—meaning within the 90-day voluntary reliquidation period of 19 U.S.C. § 1501—"without regard to the IEEPA duties." The order, styled as a universal injunction, applied to all entries on which an importer paid IEEPA duties, whether or not that importer had filed a court action for a refund.
CBP quickly announced the development of a claims system that could accommodate these more recent entries, and Judge Eaton suspended immediate compliance with the order to allow CBP 45 days to deploy the system, requiring weekly or biweekly updates from the agency. On March 27, however, Judge Eaton amended his order to cover all IEEPA duties paid on any entry, regardless of liquidation date and status, in response to which CBP stated on March 31 that, while it would still accommodate entries covered by the original order in "Phase 1" of its new CAPE system, a subsequent phase would cover the finally liquidated entries. CAPE Phase 1 launched as expected on April 20 for claims on most entries that are within 80 days of liquidation, discussed below.
DOJ's May 29 motion came in response to Judge Eaton's seemingly unprompted May 27 order in V.O.S. Selections, Inc. v. United States, the original case challenging the IEEPA tariffs, to show cause why the court should not require immediate compliance with its order to liquidate all entries subject to IEEPA duties, and that also directed in-person testimony by CBP Commissioner Rodney S. Scott. The motion, which the court immediately denied, sought permission for a subordinate to testify in Commissioner Scott's place but, more significantly, made explicit the government's position that (1) "[o]nce an entry is finally liquidated, CBP has no authority to reliquidate or refund money without a court order," and (2) "the universal injunction exceeds the Court's jurisdiction and equitable authority under Trump v. CASA, Inc.," a 2025 Supreme Court decision that limited a lower court's power to issue relief to non-litigants. Unless Judge Eaton's May 27 order to show cause is stayed or May 29 denial is reversed first, Commissioner Scott is scheduled to testify before the CIT on June 9 to explain the government's policy on returning all $166 billion of IEEPA duties "either by complying with the court's order, or by some other means." The appeal deadline for the oldest outstanding refund order, in the current test case, Euro-Notions Florida, Inc. v. United States, is June 6.
Filing CAPE Claims and Court Cases
With regard to entries that are unliquidated or within 80 days of liquidation, importers should continue to file claims through CAPE. All told, CAPE Phase 1 has largely been a success for importers and met Judge Eaton's expectations. According to CBP's most recent update filed in Euro-Notions, as of May 22 CBP has accepted IEEPA duty refund claims of approximately $85 billion, of which approximately $20.6 billion plus interest has already been disbursed. There have been no significant programmatic developments for CAPE aside from new error messages since our last advisory on the subject, but Judge Eaton's latest order in Euro-Notions observes that the updated FAQ section on CBP's dedicated IEEPA duty refunds website includes a statement that CBP is developing the capacity in CAPE to accept entries flagged for reconciliation, which currently are ineligible. CBP's next update to the court is due June 10.
For all entries liquidated more than 80 days ago, importers may still wish to prepare to file a refund action. If the government's appeal is successful, this will be critical for any importer with finally liquidated entries subject to IEEPA tariffs since an importer would have to be a litigant to obtain relief. Regardless of the outcome, it is likely that CBP will, as promised, develop the capacity to accept finally liquidated entries before the appeal is settled. In its May 29 motion, DOJ confirmed the position it alluded to months ago that refunds "must be handled through importer-specific orders requiring reliquidation," meaning it will not object to issuing refunds on finally liquidated entries where the court orders it to do so. The most conservative approach an importer can take is also to file protests on entries when the time since liquidation approaches 180 days, although the government's statement suggests its position that those entries are nonprotestable and at present openly protested entries are ineligible for CAPE.
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DWT's international trade, investment & national security team can advise clients on filing CAPE claims for more recent entries and assist in protecting refund rights through litigation and protests for finally liquidated entries and will report on developments as they arise. Please contact the authors if you have any questions or need assistance. For more insights, sign up for our alerts.