On February 20, 2026, the United States Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not give the President authority to impose tariffs. The decision invalidated the IEEPA-based reciprocal tariffs applied from April 2025 onward, along with the so-called fentanyl tariffs on goods from China, Canada, and Mexico.

The practical result: approximately 330,000 businesses paid or deposited an estimated $166 billion in duties across more than 53 million import entries between roughly March 2025 and February 24, 2026. Those duties were illegally collected. The Court of International Trade ordered U.S. Customs and Border Protection to refund them. CBP built a new system to do it.

That system, called CAPE (Consolidated Administration and Processing of Entries), went live in the ACE portal on April 20, 2026. As of April 26, importers and brokers had submitted approximately 75,300 CAPE declarations covering more than 11.2 million entries. That leaves around 42 million entries still unfiled against, and the deadlines on some of those entries are not months away.

What was struck down, and what wasn't The ruling struck down IEEPA tariffs only. Section 301 duties, Section 232 duties, and standard processing fees remain in full effect and are not refundable. The IEEPA-attributable portion of each entry is the only part that's refundable. Brands submitting refund requests that include Section 301 or 232 amounts in the IEEPA-attributable figure get rejected by ACE at the entry level, which adds weeks of cycle time.

The three paths to a refund Path 1: CAPE Phase 1 covers unliquidated entries and entries liquidated within 80 days of your CAPE submission, currently reaching back to approximately February 1, 2026. CBP estimates Phase 1 covers roughly 63% of total IEEPA tariffs paid. Refunds, including statutory interest, arrive via ACH in an estimated 60 to 90 days from accepted declaration.

Path 2: CBP Protest under 19 U.S.C. Section 1514, for entries liquidated and outside the 80-day CAPE window but still within 180 days of liquidation. This is the critical path for 2025 entries that have already liquidated, since CBP has been liquidating many faster than the standard 314-day cycle. Steptoe's trade team specifically flagged that importers with 2025 liquidations should file protests in a timely manner, since some protest windows on April, May, or June 2025 entries may be closing this month.

Path 3: Court of International Trade action, for entries where the 180-day protest window has passed. This carries a two-year statute of limitations but generally does not award interest, unlike the first two paths.

How to run your entry audit Pull your ES-003 (importer activity) and ES-701 (liquidation notice) reports from ACE, filtering for Chapter 99 HTS codes beginning with 9903.01 and 9903.02. Sort entries into the three buckets above by liquidation date, separate the IEEPA-attributable duty from Section 301/232 amounts, and total each bucket. If you've never accessed ACE and don't have a broker relationship, that's the signal that filing directly is not viable for your business.

For refund exposure under $25,000, self-filing is reasonable. Between $25,000 and $150,000, a customs consultant catches common rejection patterns. Above $150,000, use a licensed customs broker.

The dual-track approach, filing a CAPE Declaration where eligible and a protest as backup where liquidation status is ambiguous, is specifically recommended by trade counsel including Sandler Travis and Steptoe.

The accounting reality IEEPA tariffs paid in 2025 were deductible as cost of goods in that year. The refund is taxable income in the year received, creating a mismatch your CFO needs to plan for. Brands that publicly communicated tariff-driven price increases should review those communications with counsel before posting about refund recovery, given emerging consumer class action exposure.

What comes next Section 122's 10% global surcharge, which replaced the voided IEEPA framework, expires July 24, 2026 unless extended. USTR opened two sweeping Section 301 investigations in March 2026 designed to build a permanent, statutorily anchored replacement, with historical timelines running 6 to 18 months to implementation. The overall direction of U.S. trade policy is toward more tariffs with a more durable legal structure, not fewer tariffs.

At $166 billion across 330,000 importers, average duty exposure is just over $500,000 per business. For a $5M DTC brand that imported consistently from China in 2025, IEEPA duties likely represent $400,000 to $800,000 in refundable duties plus interest. The protest deadline on your April 2025 entries may be this month.