The U.S. Supreme Court is currently deliberating the legality of President Trump’s IEEPA tariffs. While a decision is expected soon, importers must consider how to protect their rights to duty refunds should the tariffs be struck down. At this stage, it is not clear whether duty refunds will be available and, if so, what must be done to secure those refunds.
The traditional path to claiming a duty refund is to file a formal protest against each import entry within 180 days of the date of liquidation. Most entries liquidate 314 days after the date of entry although CBP is not bound by that timeframe. CBP can and has, in many instances, liquidated entries in a shorter timeframe. Importers should monitor their entries for liquidation and file timely protests against each liquidated entry challenging the legality of the IEEPA tariffs. If the protests are denied, importers may need to file cases in the U.S. Court of International Trade (“CIT”) to preserve their refund claims. Importers must continue to monitor the situation and be mindful of approaching deadlines.
Second, under a different legal theory, the Government could claim that recovery of IEEPA tariffs will be limited to importers who filed their own individual claims in the CIT. Individual claims should be filed within two years of the date IEEPA tariffs were enacted. Importers may decide to file both protests against liquidation and their own claim in the CIT.
Third, under yet another legal theory, only a court action, filed by the importer prior to liquidation, can trigger refunds of the IEEPA tariffs. In other words, once an entry is liquidated, the importer potentially would be unable to obtain IEEPA refunds, even if it timely files a protest against liquidation. Under this theory, it would be necessary for each importer to file its own complaint in the CIT and to apply for its own preliminary injunction to prevent CBP from liquidating the importer’s entries. This is by far the most conservative approach an importer may take; it will maintain the status quo with respect to the importer’s entries until the picture becomes clearer.
Finally, it is also possible that duty refunds will be issued automatically, without importers having to take any action. Such remedy might come in the form of a Court order based on the existing litigation, Congressional legislation or Executive order. Conversely, even if the U.S. Supreme Court strikes down the tariffs, it is uncertain whether the administration will support a duty refund process for IEEPA tariffs paid on shipments entered prior to the Supreme Court decision. In that event, further litigation may be necessary.
Importers must choose the strategy that is right for them: file protests, file a court action or wait and see what happens. Please contact one of our attorneys if you have any questions.
