The federal government has refunded approximately $100 billion in tariff duties plus interest to U.S. importers, according to a court filing in the U.S. Court of International Trade disclosed on August 5. The refunded amount represents roughly 60% of the $166 billion collected under tariffs imposed using the International Emergency Economic Powers Act (IEEPA), which the Supreme Court ruled unconstitutional in a 6-3 decision in February 2026.
Key Takeaways
- U.S. Customs and Border Protection has processed approximately $100 billion in tariff refunds (duties plus interest) through the Consolidated Administration and Processing of Entries (CAPE) system as of end of July 2026.
- The refunded amount represents roughly 60% of the estimated $166 billion collected under IEEPA tariffs between February 2025 and February 2026.
- An additional $29 billion in refund requests have been accepted for processing and are awaiting Treasury disbursement.
- The Supreme Court ruled 6-3 in February 2026 that IEEPA’s authority to “regulate importation” does not include the power to impose tariffs, a function reserved to Congress under the Constitution.
- Refunds are being paid to importers of record and licensed customs brokers who directly paid the duties, not to consumers or end-use businesses further down the supply chain.
The Supreme Court Ruling That Triggered the Largest Tariff Refund in U.S. History
The refund process traces back to the Supreme Court’s February 20 decision in Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections. Chief Justice John Roberts authored the majority opinion, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. The court held that IEEPA’s phrase “regulate importation” does not authorize the executive branch to impose tariffs, considering both the plain meaning of the word “regulate” and the broader statutory context of IEEPA, which was originally enacted to address national emergencies through financial sanctions and trade controls rather than revenue-raising duties.
The Congressional Research Service noted that the ruling effectively separated emergency economic powers from the taxing authority that the Constitution reserves to Congress. Justice Kavanaugh, writing in dissent, acknowledged that the government “may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.” That observation has since become the central tension in the refund process.
The CAPE System Handles Refunds, but the Pipeline Remains Backlogged
U.S. Customs and Border Protection launched the Consolidated Administration and Processing of Entries (CAPE) refund system within the Automated Commercial Environment (ACE) portal on April 20, 2026. In its first phase, CAPE accepted claims from importers of record and licensed customs brokers who directly paid IEEPA duties. A second deployment on June 29 expanded eligibility to include entries flagged for reconciliation.
As of the end of July, the court filing showed that refunds totaling approximately $100 billion in duties plus interest had been certified by CBP and sent to the U.S. Department of Treasury for disbursement. An additional $29 billion in claims had been accepted for processing but had not yet been disbursed. Together, the processed and pending amounts account for approximately $129 billion of the estimated $166 billion total, leaving roughly $37 billion in duties for which claims have either not been filed or are still being reviewed.
The sheer scale of the refund operation has tested the capacity of CBP’s processing infrastructure. Over 330,000 importers paid IEEPA duties across more than 53 million shipments between February 2025 and the date of the Supreme Court ruling. Processing that volume through a system designed for routine customs adjustments rather than a mass refund of this magnitude has created delays that trade associations and importers have flagged repeatedly since the spring.
Importers Receive the Refunds, but Consumers Are Unlikely to See Lower Prices
The structure of the refund process means that money flows back to the businesses that originally paid the duties at the port of entry, not to the retailers or consumers who ultimately absorbed the higher prices. Treasury Secretary Scott Bessent noted earlier this year that refunds would be paid to importers and that “it seems unlikely anyone will rush to lower prices to their customers.”
That assessment has proven largely accurate. The tariffs applied to goods across virtually every import category, from electronics and machinery to clothing and household products. When the duties were in effect, importers passed much of the cost through the supply chain in the form of higher wholesale and retail prices. The refund reverses the payment at the point of collection but does not create a mechanism or incentive for those downstream price increases to be rolled back.
For large importers, the refunds represent a material cash infusion that may appear in upcoming quarterly earnings. Disney, for example, disclosed in its August 5 fiscal Q3 earnings report that the company collected approximately $100 million in tariff refunds during the quarter. For smaller importers, the refunds may help offset losses incurred during the period when the tariffs were in effect, particularly for businesses that absorbed a portion of the duties rather than raising prices.
New Tariffs Under Section 301 Replace the Struck-Down IEEPA Duties
The Supreme Court ruling did not eliminate tariffs on imports. Following the decision, the administration imposed a new round of global tariffs under Section 301 of the Trade Act of 1974, a statute designed to address unfair or discriminatory trade practices by other nations. Unlike IEEPA, Section 301 has been used as a tariff authority by previous administrations, most notably during the U.S.-China trade dispute beginning in 2018.
The legal distinction matters. IEEPA was designed as an emergency powers statute, and the Supreme Court’s majority held that its language did not extend to imposing duties. Section 301, by contrast, explicitly addresses trade remedies and has withstood prior legal challenges. The shift in legal authority means that the current tariff regime operates on different constitutional footing than the one the court invalidated, though trade groups and legal analysts have signaled that challenges to the Section 301 tariffs are also being considered.
The combination of a $100 billion refund flowing back to importers and a new set of tariffs being collected simultaneously creates an unusual fiscal dynamic. The refunds reduce federal revenue by the amount returned, while the replacement tariffs generate new collections. The Congressional Budget Office has not yet published an updated estimate of the net fiscal impact, but budget analysts have noted that the gap between refunds paid and new tariffs collected could widen the federal deficit in the near term.
FAQs
Who Receives the Tariff Refunds?
Refunds are paid to the importers of record and licensed customs brokers who originally paid the IEEPA duties through U.S. Customs and Border Protection. Consumers and downstream retailers are not directly eligible for refunds under the current process.
Why Did the Supreme Court Rule the IEEPA Tariffs Unconstitutional?
The court held in a 6-3 decision that IEEPA’s authority to “regulate importation” does not include the power to impose tariffs. The Constitution reserves the power to levy duties to Congress, and the majority found that IEEPA’s emergency powers framework was not designed to function as a tariff authority.
Are There Still Tariffs on Imports After the Supreme Court Ruling?
Yes. Following the ruling, the administration imposed new tariffs under Section 301 of the Trade Act of 1974, a different legal authority that explicitly addresses trade remedies. The Section 301 tariffs are currently in effect and apply to imports from multiple trading partners.
