Sometime in February, a small business owner in Ohio got a piece of news so startling he forgot how to use a door. He was standing in a bagel shop, phone in hand, when a Supreme Court ruling flashed across the screen. He stumbled right past the exit, wandered around the parking lot, and couldn’t remember where he’d left his car. The highest court in the country had just sided with him – and thousands of businesses like his – against more than a year of tariffs they’d been paying on everything they imported.
The ruling felt like a win. It was, legally speaking. But what happened next revealed something a lot of American importers, from small online sellers to mid-size manufacturers, are only beginning to understand: winning the court case and actually getting your money back are two very different things.
The refund process that followed the Supreme Court’s February 2026 decision has been described by trade experts as anything but smooth. Billions of dollars in tariff payments are theoretically coming back to more than 330,000 American importers. The question experts are now asking is how many of those businesses will ever see a single cent, and whether the process itself was designed in a way that accidentally leaves tens of billions of dollars on the government’s side of the ledger.
What the Supreme Court Actually Decided
On February 20, 2026, the U.S. Supreme Court ruled in a 6-3 decision in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not grant the President authority to impose tariffs. IEEPA, passed in 1977, gives the executive branch power to “regulate commerce” during national emergencies. But by a vote of 6-3, the justices ruled that this language does not extend to setting import tax rates.
The Court rooted its reasoning in Article I, Section 8 of the Constitution, which grants Congress the power to “lay and collect Taxes, Duties, Imposts and Excises.” Tariffs, the Court stressed, have long been understood as a “very clear branch of the taxing power,” and the framers gave Congress alone access to that revenue-raising authority.
The ruling wiped out tariffs imposed under five separate IEEPA tariff measures, including the so-called “fentanyl” tariffs on Canada, China, and Mexico, and the sweeping “reciprocal” tariff regime imposed on goods from nearly every other country. The decision had no effect on existing tariffs imposed under Section 301 of the Trade Act of 1974 or Section 232 of the Trade Expansion Act of 1962, which cover steel, aluminum, copper, automobiles, and semiconductors.
The Trump administration responded quickly. President Trump issued an executive order terminating the IEEPA duties and then issued a Proclamation invoking Section 122 of the Trade Act of 1974 to impose a temporary 10% duty on most goods entering the United States. For importers already reeling from tariff costs, the whiplash was immediate: the old tariffs were gone, but new ones arrived within hours.
The Money That Was Supposed to Come Back
About $166 billion in IEEPA duties were collected from more than 330,000 importers across 53 million shipments between April 2025 and February 2026. Swift refunds of those impermissible tariffs would be meaningful for the more than 200,000 small business importers in this country, according to the U.S. Chamber of Commerce, which pressed loudly for a refund process that actually worked. The Chamber filed a legal brief arguing that, given the magnitude of entries at issue, traditional refund pathways were impractical and that the court should create a streamlined process to deliver refunds to American businesses quickly.
After the Supreme Court’s February 20 decision, the U.S. Court of International Trade ordered the government to take immediate action on refunds. On March 6, U.S. Customs and Border Protection submitted a plan for the Consolidated Administration and Processing of Entries system, known as CAPE, designed to consolidate refunds of IEEPA duties including interest rather than processing refunds on an entry-by-entry basis.
On April 20, 2026, CBP activated the CAPE tool inside ACE, launching the first phase of the system as planned. Importers who were ready filed in minutes. Many were not ready at all.
Why the System Isn’t Working for Everyone
The CAPE portal is not an automatic refund machine. Legal experts described it in stark terms: “These are absolutely not automatic refunds. You have to jump through hoops, even though customs should have taken it upon themselves to do automatic refunds.”
To get a refund, importers must have an established ACE Portal account and bank account information for refunds added to that account, which requires having the “Importer” sub-account in the ACE Portal. Companies must submit declarations listing every entry on which they paid IEEPA duties. Valid IEEPA refunds will generally be issued within 60 to 90 days following acceptance of the CAPE Declaration, unless a compliance concern requires further CBP review.
Phase 1 is limited to certain unliquidated entries and certain entries within 80 days of liquidation. Older, finalized payments are deferred to future phases, and it is not clear when the next phases of CAPE will be implemented, but processing those claims is expected to take longer than those in the first phase.
For large, well-resourced importers with dedicated customs brokers, this process is manageable. CBP has confirmed that about 82% of the total, roughly $127 billion including statutory interest, is eligible for refund in Phase 1. But the importers who had completed registration ahead of the portal’s launch represented less than one-fifth of the total importers who paid IEEPA tariffs, and most of those who hadn’t registered were small businesses struggling with the technical requirements.
For context, consider how the tariff burden played out across everyday goods and household budgets. Tariff costs filtered into the price of groceries, household items, and consumer electronics, often without shoppers even knowing it.
Small Businesses Left Behind
More than 300,000 companies paid a total of approximately $166 billion in IEEPA duties that must be refunded, collected on more than 53 million entries. Getting that money back to all of them has proven to be a significant challenge, not evenly distributed across businesses.
Larger importers, companies with the logistics staff, customs brokers, and technology to move quickly, were ready when the portal opened on April 20. Some importers have reported new ACE account setup takes 3 to 4 weeks, putting smaller operators at an immediate disadvantage. Many reported technical errors, difficulty logging into the portal, or being stuck on hold for hours with U.S. Customs and Border Protection and getting no answer.
For some business owners, the timeline itself is the biggest problem. “My main concern is the turnaround time,” said one importer. “A refund process that takes several months to complete doesn’t solve the cash flow problem that it is supposed to fix.”
About a week into the refund process, U.S. Customs said it had rejected more than a third of filed claims for technical or data errors, though importers can refile. As of April 26, the agency had accepted claims covering about a fifth of the shipments for which it owes refunds. CBP rejects CAPE filings for entry-mix errors, wrong tariff authority coding, bad ACH enrollment, and incorrect CSV formatting, all the kinds of mistakes a small business owner navigating a federal customs portal for the first time is likely to make.
Expert Warning: Billions May Stay Gone
Trade experts at the libertarian Cato Institute wrote that the refund process, not being automated or instant, risked shortchanging thousands of American companies, warning that “intentionally or not, the federal government will likely keep tens of billions of dollars it should have returned to importers months ago.”
Research from Cato calculated that the delay in refunding companies for emergency tariffs is costing U.S. importers a total of $700 million per month, or $23 million per day, based on the interest owed on the illegally collected duties. That analysis cuts to the core of what worries trade observers most. Reports indicate that portal errors can cause permanent loss of refund rights for importers who miss the 80-day window. A small importer who can’t get their ACE account set up correctly, can’t find their old freight forwarding invoices, or simply doesn’t have the bandwidth to deal with a government portal in the middle of running a business – that importer may lose their claim entirely, not because they weren’t owed the money, but because the system wasn’t built with them in mind.
The cost of tariffs had been woven into the prices of many products in a way that makes it hard to separate out what customers ultimately paid. Often, manufacturers, suppliers, importers, retailers, and shoppers all absorbed costs along the way. And with tariffs landing on the heels of historic inflation, companies big and small argued they ate much of the cost to avoid spooking shoppers with higher prices.
Tariff refunds are going to importers, not consumers. Even though consumers paid IEEPA tariffs indirectly through higher retail prices, no direct CBP claim is available, as CBP only refunds the party that wrote the original duty check. In the absence of widespread direct refunds, some customers have begun filing class-action lawsuits to recover what they spent, though legal fees in such suits are high and consume a large portion of any recovery, reducing what ultimately reaches consumers.
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What to Do Now If You’re an Importer
U.S. importers of record who directly paid the tariffs, or the person who takes ownership of the goods once they have cleared customs, may be eligible for a refund. Businesses that did not directly pay the tariffs are not eligible. Buyers who were indirectly hit with tariff increases, such as distributors who purchased products through a domestic supplier, cannot submit a claim.
Importers of record and customs brokers should ensure they have an ACE Portal account and that their bank account information for refunds has been added to their account, which requires the “Importer” sub-account in the ACE Portal. Without that bank enrollment, no payment can be issued, even if your claim is accepted.
Only the importer of record or the licensed customs broker who filed the original entries can file a CAPE Declaration. Brokers may submit on behalf of importers, but responsibility for accuracy remains with the importer of record. If you used a freight forwarder or customs broker to handle your shipments, contact them now. They may have the documentation you need, including entry numbers, duty payment records, and entry summaries, that are required to file a complete CAPE declaration.
For Phase 1, only certain unliquidated entries and certain entries within 80 days of liquidation are eligible for refunds. Older, finalized entries will need to wait for future phases of the CAPE system, which have not yet been given launch dates.
The first refunds, which will come from the U.S. Treasury Department, are expected to arrive as early as May 11, 2026, according to court documents. Given the volume of claims and early rejection rates, the practical reality for many filers is that refunds won’t arrive before late 2026 at the earliest. If you also imported goods covered by agricultural tariffs that hit all 50 states, keep in mind that Section 232 tariffs on steel, aluminum, and other goods imposed under separate authority are not part of this refund process.
The Bottom Line
This refund process was designed to be fair. Whether it turns out that way in practice depends almost entirely on whether small importers can navigate a federal customs portal that many of them had never used before this year. The law said the money has to come back. It didn’t say it had to be easy to collect.
Over the past year, businesses around the country have seen significant cost increases and supply chain disruptions as a result of these tariffs. For a small business owner who absorbed those costs quietly, who chose not to raise prices on their customers, the refund was supposed to be some measure of relief. For many, the paperwork mountain standing between them and that check is proving to be its own kind of burden.
Based on statutory interest rates, delaying refunds for one year could result in an additional $8.4 billion owed to importers on top of the original tariff amounts, and legal experts are clear that courts will require those interest payments. The clock is running, and every day of delay is money that has to come from somewhere.
If you run a small importing business, the most important thing you can do right now is gather every document you have. Pull your freight invoices, your customs entry numbers, and your proof of duty payments. Get your ACE account set up and your bank information enrolled. If the process feels overwhelming, a licensed customs broker can file on your behalf. The alternative, doing nothing, may mean the government keeps money that, by law, belongs to you.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.
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