IEEPA Tariff Refunds: Who Really Owns The Money?

Since the Supreme Court invalidated the International Economic Emergency Powers Act (IEEPA) tariffs, refunds are on everyone’s mind. Learning Resources, Inc. v. Trump, 607 U.S. ___, No. 24-1287 (2026). Recent estimates are that Customs and Border Protection (CPB) collected between $166 billion and $182 billion in IEEPA (“reciprocal”) tariffs. Public officials at all levels of government are demanding refunds be distributed to consumers who ultimately bore these costs. See e.g., The RELIEF Act (proposed) Stanton Introduces RELIEF Act to Provide Automatic Tariff Refunds to Small Businesses | Newsroom | Congressman Greg Stanton. Attorneys General from the states that prevailed in the U.S. Supreme Court are among those calling for refunds to be given to consumers. E.g., Attorney General James Calls on Congress to Pass Legislation Requiring Tariff Refunds; Attorney General Rayfield Calls on Congress to Pass Legislation Requiring Tariff Refunds - Oregon Department of Justice: Media.

Since the Supreme Court’s decision in Learning Resources, there have been approximately 1500 refund cases filed at the Court of International Trade (CIT). Together with the 600 or so refund cases filed at the CIT before the decision, there are more than 2,000 refund cases pending. All the cases are assigned to Judge Richard K. Eaton. Atmus Filtration, Inc. v. United States, CIT Case No. 26-01259. The CIT has nationwide jurisdiction. For this reason, Judge Eaton is overseeing the IEEPA refund process nationwide. He directed the CPB to stop collecting any IEEPA tariffs and liquidate those in process. He also directed CPB to develop a system within the CPB to refund the money due to the importers. Judge Eaton has requested regular reports from CBP on its progress regarding the development of the new refund system. 

The separate legislative efforts to direct refunds to consumers and away from importers, who tendered the tariffs to CPB, are fraught. Under current law, the CPB is obligated to refund the tariffs to the importer who paid the tariff. 19 U.S.C section 1313 and 19 CFR section 10.1010. Accordingly, importers “own” the refunds as a matter of law. If Congress were to legislate refunds to anyone other than the importers, the importers would challenge any such act as unconstitutional. Redirecting the funds to consumers would be a Fifth Amendment taking private property from the importers for a public use without just compensation. 

Some importers may be subject to civil claims for portions of the refunds under theories of unjust enrichment, restitution, breach of contract or unfair trade practices. 

Unjust enrichment and restitution are equitable doctrines. The theory of recovery of tariff refunds from the importers would be based on the unjustness of allowing the importer to retain money which was paid by consumers under an illegal tariff or tax scheme.

Some importers may have contract clauses that require rebates of price adjustments, discounts or other refunds. Where there are “duty drawback” clauses, the customers will have strong positions. The importer’s direct customers (or assignees) are the only parties able to bring these contract claims.

There is a possibility that importers may have claims asserted against them based on unfair trade practices or a breach of the duty of good faith and fair dealing. These claims will only lie if the importer took the position that the tariffs were contingent or temporary before the refunds were allowed. One important consideration, in many states, claims for breach of the duty of good faith and fair dealing alone will not justify damages for breach of contract.

Any litigation against the importers seeking rebates or refunds of tariffs paid under the IEEPA will require certain proof. The required proof will include the tariff being a separately identified charge not a price increase. If the case is based on a contract, proof will include the contact provisions showing the obligation to provide the customer with discounts, rebates, refunds or price adjustment and the amount or recovery to which the customer is entitled based the tariff refunds.

Moreover, the Administration has instituted new tariffs under section 122 of the Trade Act of 1974 (19 USC 2132: Balance-of-payments authority). Under this provision, the President has the authority to impose tariffs up to 15% or trade restrictions for up to 150 days. Under the terms of the statute, this authority may only be used when there is a “fundamental” balance-of-payments emergency. There is general agreement among trade experts that there is no balance-of-payments emergency. See e.g., Are the new tariffs justified under section 122? No.  Section 122 Tariffs - Liberty Justice Center. On March 5, 2026, 24 states filed a challenge to the section 122 tariffs on the grounds that there is no “fundamental” balance-of-payments emergency. State of Oregon v. Trump, CIT Case No. 1:26-cv-01472. With the overall weakness of the justification for the Section 122 tariffs and the current situation with the IEEPA, importers should expect their customers to be seeking contract provisions to ensure that any refunds of the Section 122 tariffs will flow through the customer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.