U.S. Customs and Border Protection (CBP) informed a judge at the Court of International Trade that it is currently unable to comply with an order to begin refunding tariffs imposed under the International Emergency Economic Powers Act (IEEPA) by President Donald Trump. This ruling follows a recent Supreme Court decision declaring those tariffs illegal.
In a court filing, CBP cited limitations in its technology, processes, and manpower as obstacles to immediate compliance with Judge Richard Eaton's order. However, the agency indicated that it could potentially start issuing refunds by late April, contingent upon upgrades to its systems. CBP reported that it had collected approximately $166 billion in IEEPA tariffs and related duty deposits.
Judge Eaton, who is overseeing cases concerning refunds for these tariffs, emphasized the agency's familiarity with handling refunds and directed CBP to determine the cost of processing shipments without tariffs. In response, CBP outlined a plan to enhance its Automated Commercial Environment (ACE) system, which tracks imported goods, to facilitate a more efficient refund process. This new functionality aims to streamline the issuance of refunds to individual importers rather than issuing millions of separate payments.
CBP's executive director of trade programs noted that the agency expects the changes to save over four million hours of work. However, the filing also highlighted concerns that the increased administrative workload might divert personnel from critical trade enforcement duties, impacting national security and economic stability.
The ruling and subsequent agency actions stem from a lawsuit by Atmus Filtration, a company among many seeking refunds for tariffs deemed illegal. The implications of this case extend to all importers who have paid the IEEPA tariffs.