US Customs: "We can’t immediately process IEEPA tariff refunds…we will build a streamlined system" [Lee Sang-eun’s Washington Now]

Refund-eligible amount reaches $166 billion

US Customs and Border Protection (CBP) said it cannot immediately carry out an order to refund the reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which the US Supreme Court found to be unlawful. Instead, it said it will put in place a new streamlined system to process the refunds within 45 days.

Brandon Lord, CBP’s executive director for Trade Policy and Programs, said as much in a document submitted on the 6th (local time) to the US Court of International Trade (USCIT), adding that it will require importers seeking refunds to submit only minimal paperwork.

On the 20th of last month, the US Supreme Court ruled that President Donald Trump’s sweeping tariff measures imposed using the IEEPA were illegal, but did not address specific refund procedures. The case was therefore sent back to the lower court, the USCIT. On the 4th, Chief Judge Richard Eaton of the USCIT ruled that all importers that paid tariffs under the IEEPA are eligible for refunds pursuant to the Supreme Court’s invalidation and ordered CBP to stop processing the unlawful tariffs.

However, CBP said it “cannot comply,” explaining that it plans to build a system within 45 days to handle refund requests on an unprecedented scale. Judge Eaton accordingly temporarily stayed the refund order and asked CBP to submit a status report on implementation by the 12th.

According to the document, as of the 4th, 330,000 importers filed more than 53 million entry summaries, and total tariff payments eligible for refunds amount to $166 billion (about 246.45 trillion won). The longer it takes, the more complicated it becomes to claw back money already paid. Under customs law, an importer’s duty liability is finalized 314 days after the goods are brought into the country. If a company did not challenge the duties and request a refund before liquidation, it must file a formal written protest. It may also have to challenge the matter in court. From companies’ perspective, time is money.

CBP said in the document that it can develop and implement new functionality in the Automated Commercial Environment (ACE), the system used to track imports and duty payments, explaining that “rather than issuing refunds on a transaction-by-transaction basis, we will consolidate refunds and interest by importer.” It added that it is “making every effort to bring the new ACE system online within 45 days.”

Despite the USCIT ruling, the Trump administration is likely to actively try to impede the refunds. President Trump warned that he would “fight it in court for five years.” There is talk that it could appeal the USCIT order—effectively the trial-level ruling—to the appellate court.

Washington=Correspondent Lee Sang-eun selee@hankyung.com