Government officials are finalizing a process to refund over $166 billion in tariffs that were recently ruled illegal. On March 4, 2023, Brandon Lord, executive director of the trade policy and programs directorate at U.S. Customs and Border Protection (CBP), announced that a new streamlined system is in development. This initiative follows a ruling from a federal judge that mandates refunds to all importers affected by the tariffs imposed under the International Emergency Economic Powers Act by former President Donald Trump.
In a filing with the Court of International Trade on Friday, Lord indicated that the new refund system is expected to launch within 45 days. Importers will only need to provide minimal documentation to receive their refunds. This comes after Judge Richard Eaton ruled on Wednesday that all importers are entitled to recover tariffs deemed illegal, with interest.
As of March 4, more than 330,000 companies had made over 53 million entries with CBP, all of which contributed to the substantial tariff payments. The judge’s ruling, which stems from a previous Supreme Court decision, applies to the double-digit taxes imposed by the Trump administration last year. Before the refund process can begin, it must receive approval from Judge Eaton.
Lord highlighted the challenges of the current refund system, stating that fulfilling these requests could require more than 4.4 million man hours. He expressed concern that dedicating all CBP staff to the refunds would hinder other essential functions, including revenue protection and national security.
The agency is optimistic about the new system’s potential to consolidate and expedite the refund process. “This new process will require minimal submission from importers,” Lord explained. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations.”
Currently, as of February 6, 2023, CBP is only issuing refunds electronically. However, the majority of importers have yet to register for this electronic system. Of the 330,566 importers who paid tariffs, only 21,423 have completed the registration process necessary to receive their refunds digitally. Until all importers finalize their electronic registration, any refund requests will be rejected, according to Lord.
This development represents a significant moment for businesses that were adversely affected by the previous tariff policies, providing them a pathway to recover substantial amounts tied up in these payments. The forthcoming changes in the refund process are eagerly awaited by many in the import industry.
