CBP says it cannot immediately comply with order to refund Trump IEEPA tariffs

U.S. Customs and Border Protection told a Court of International Trade judge on Friday that it cannot immediately begin issuing refunds for reciprocal tariffs imposed last year by President Donald Trump, which the Supreme Court recently found unlawful. The agency said its current technology, established procedures and staffing levels make immediate compliance infeasible, while estimating roughly $166 billion in IEEPA-related collections. CBP told the court it is working to add functionality to its Automated Commercial Environment, and aims to begin consolidated refunds after that upgrade, which it expects to deploy within about 45 days. The dispute comes as Judge Richard Eaton prepares hearings in New York City for importers seeking repayment under an amended March 5, 2026 order.

Key takeaways

• CBP informed the Court of International Trade it cannot immediately implement Judge Eaton’s refund order because of limitations in technology, processes and available personnel.
• The agency estimates total IEEPA tariff collections and related duty deposits at approximately $166 billion as of the filing date.
• CBP reported more than 330,000 importers made over 53 million entries tied to IEEPA duties, which could translate to more than 54 million separate refund transactions under current procedures.
• To manage scale, CBP proposes adding ACE functionality to consolidate refunds and interest on an importer basis, targeting deployment within 45 days.
• CBP estimates the ACE change would save the agency over 4 million employee hours versus doing millions of manual transactions.
• Judge Eaton ordered CBP to calculate duties on shipments as if no IEEPA tariff applied and to refund importers, including interest; the order arose from the Atmus Filtration lawsuit but applies broadly.

Background

In 2025, the Trump administration imposed a set of reciprocal tariffs under the International Emergency Economic Powers Act, prompting legal challenges from importers and trade groups. Those tariffs were subject to litigation that reached the Supreme Court, which recently concluded that the specific IEEPA-based levies were unlawful. As a result, importers sought repayment for duties they had paid while the tariffs were in force.

The Court of International Trade has been designated to handle refund claims, and Judge Richard Eaton was assigned as the single judge to hear these cases. One early litigant, Atmus Filtration, secured an order directing CBP to calculate what duties would have been absent the IEEPA tariffs and to refund amounts paid, with interest. That order was amended on March 5, 2026 to address scope and implementation, prompting CBP’s Friday filing about its operational limits.

Main event

CBP filed a formal response saying its existing systems and administrative procedures are not well suited to the unprecedented volume of refunds now required under the court order. The agency described a present-state scenario in which millions of individual entries would need separate processing under current ACE workflows, creating a massive manual burden on staff.

In the filing, Brandon Lord, executive director of the Trade Programs Directorate at CBP’s Office of Trade, quantified the scale: more than 330,000 importers and over 53 million entries linked to IEEPA duties. CBP estimated that, without consolidation, the work would include issuing over 54 million discrete refunds and corresponding interest calculations.

CBP warned that reallocating personnel to perform this volume of manual work would reduce the agency’s capacity to carry out core trade enforcement and functions CBP says are needed to mitigate imminent national security and economic risks. To avoid that trade-off, the agency proposed a technical solution within ACE to consolidate refunds and interest on an importer basis.

Judge Eaton has maintained a schedule of hearings in New York City and emphasized during earlier proceedings that the mechanics of liquidation and refunding are within Customs’ routine activities. Eaton told the court he expects CBP to implement the remedy, while CBP countered that the scale and current tooling create practical constraints.

Analysis & implications

Fiscal impact: CBP’s $166 billion estimate is an agency-level total of taxes and estimated duty deposits tied to the IEEPA tariffs; the final refundable amount will fluctuate after reconciliation of entries, liquidations and exclusions. If refunds proceed, Treasury flows and agency accounting will need adjustments, and interest payments could materially increase the cash impact.

Operational strain: The scale of affected entries exposes limits in legacy trade-processing systems. CBP’s stated plan to add importer-level consolidation in ACE aims to reduce repetitive processing, but developing, testing and deploying new functionality in a federal system typically faces compliance, security and integration steps that can extend timelines beyond initial estimates.

Legal and precedent effects: The episode underscores judicial checks on executive tariff authority and could shape how future emergency trade measures are designed and implemented. Importers may press for expedited settlements, while the government may seek incremental relief or phased rollouts to balance compliance with broader enforcement priorities.

Market and trade consequences: Importers, customs brokers and supply chains face uncertainty over timing and cash flow. Companies that paid large deposits may need interim financing until refunds and interest are issued, and the timing of repayment could affect inventory financing, pricing and competitive dynamics in affected sectors.

Comparison & data

These figures are CBP estimates cited in its court filing and will require reconciliation. The total dollar figure is a snapshot of collected and estimated duty deposits; not every dollar will necessarily be refunded in full once entry-by-entry review, exclusions and statutory limitations are applied.

Reactions & quotes

Customs knows how to do this; they do it every day. They liquidate entries and make refunds.

Judge Richard Eaton, Court of International Trade

Judge Eaton made this point during a hearing in which he pressed CBP on its capacity to execute refunds under standard customs procedures.

More than 330,000 importers have made a total of over 53 million entries in which they have deposited or paid duties imposed pursuant to the International Emergency Economic Powers Act.

Brandon Lord, CBP filing (executive director, Trade Programs Directorate)

CBP used this quantified statement to illustrate the administrative scale that informs its request for a phased, system-based approach to refunds.

CBP is making all possible efforts to have this new ACE functionality ready for use in 45 days; this new process will require minimal submission from importers.

CBP court filing

The agency framed the ACE upgrade as a means to consolidate refunds and limit repetitive submissions by importers.

Unconfirmed

• The precise timeline for when individual importers will receive refunds and interest is not confirmed and depends on testing and deployment of ACE changes and subsequent reconciliation.
• The final dollar amount that will actually be refunded to importers may differ from the $166 billion estimate once entries are reviewed for exclusions, offsets and statutory limits.
• Any administrative or legislative measures that could alter interest calculations or processing priorities remain possible but are not confirmed.

Bottom line

CBP has told the Court of International Trade that, as currently configured, its systems and procedures cannot immediately satisfy a court order to refund IEEPA-era tariffs. The agency offers a technical fix inside ACE that it says will consolidate refunds, save millions of staff hours and limit diversion from enforcement tasks, and it has given a roughly 45-day target for initial deployment.

Even with an accelerated technical solution, timelines for individual refund payments and the final fiscal impact remain uncertain. Stakeholders from importers to policymakers should expect phased implementation, continued court supervision and close accounting reconciliation as CBP moves to translate the court order into operational practice.

Sources

• CNBC (news report) — original coverage of CBP court filing and hearing
• U.S. Customs and Border Protection (official) — CBP agency site for filings, guidance and ACE program information
• U.S. Court of International Trade (official) — court handling refund litigation and docket information