Background

On November 5, 2025, the U.S. Supreme Court heard oral argument in cases challenging tariffs that the President imposed under the International Emergency Economic Powers Act (IEEPA). At issue were the "reciprocal" tariffs imposed in April of this year, as well as the tariffs imposed earlier in the year on goods from China, Canada, and Mexico.

In earlier stages of these cases, lower courts found that the challenged tariffs exceeded the President’s authority under the IEEPA. However, the tariffs have been allowed to remain in place while litigation proceeds. Importers continue to pay, and the government continues to collect, the challenged IEEPA tariffs.

The lower court decisions, as well as questions posed by the Justices during the November 5 oral argument, have generated speculation that the Supreme Court may find that the President lacked authority under the IEEPA for the challenged tariff orders. This, in turn, has raised questions about how importers would be able to obtain refunds for tariffs paid under those orders.

Significant Uncertainty

Unfortunately, there is significant uncertainty about how importers would be able to take advantage of a Supreme Court decision finding the tariffs unauthorized.  There are several key issues factoring into this uncertainty:

1. While the administration could choose to set up an administrative process for importers to obtain refunds, the administration may instead take steps to oppose and/or limit widespread refunds. The administration’s stated concern about the fiscal impact of large-scale refunds points in the latter direction.
2. The Supreme Court’s June 2025 decision in Trump v. CASA, Inc., limiting lower courts’ injunction powers, has raised questions about the extent to which a Supreme Court decision finding IEEPA tariffs unlawful would apply to importers other than the parties in the IEEPA cases before the Supreme Court. The U.S. Court of Appeals for the Federal Circuit held that, in light of Trump v. CASA, the U.S. Court of International Trade (USCIT) would need to revisit the scope of the relief it had ordered when it found the IEEPA tariffs exceeded Presidential authority.
3. In litigation concerning duties imposed during the first Trump administration under a different legal provision, section 301 of the Trade Act of 1974, the government took the position that liquidated entries would be ineligible for refunds even if the challenged tariff action was ruled unlawful. While there are very strong counterarguments to the government’s position, the earlier litigation left the validity of the government’s position unresolved.

There is a significant possibility that the Supreme Court’s decision in the tariff cases it is now considering will address only the legal validity of the IEEPA tariff orders, and that if the Supreme Court finds the orders to be unauthorized, the Court will leave questions about the impact of that determination to be sorted out by lower courts in the first instance.

Choices for Importers

Customs entries typically liquidate on a 314-day cycle. IEEPA tariffs on Chinese goods became effective on February 4 of this year; IEEPA tariffs on Canadian and Mexican goods took effect on March 4 (although USMCA-originating goods have been exempt since March 7); and IEEPA-based "reciprocal" tariffs on goods from numerous countries took effect on April 5. Liquidation dates for initial entries subject to IEEPA tariffs are therefore approaching soon. Because liquidation may have significance with respect to refund eligibility, importers now face decisions about what steps they want to take to position themselves for refunds.

The Litigation Decision

In light of the uncertainties discussed above, some importers are now, as a form of insurance policy, choosing to file their own cases in the USCIT challenging the IEEPA tariff orders. They seek both prospective relief from application of the tariffs to their customs entries and retrospective relief (refunds). Crucially, the plaintiffs have sought, or likely will seek, preliminary injunctions or agreed stipulations precluding liquidation of the importer’s entries and thereby keeping the entries open for later liquidation in accordance with the Supreme Court’s ultimate decision on the lawfulness of the IEEPA tariff orders. By contrast, other importers are continuing to wait for the Supreme Court’s decision and the administration’s initial reaction before deciding how to proceed.

The former approach reduces risk but involves up-front costs that may later prove unnecessary. 

On the one hand: There may later prove to be pathways for refunds without the expense of a USCIT case, or the Supreme Court might uphold the tariffs.  Moreover, courts may ultimately conclude that liquidation poses no bar to a refund.

On the other hand: There is a possibility that filing an importer-specific USCIT case and obtaining an injunction against liquidation will prove necessary to have successfully preserved refund rights. Moreover, preventing liquidation may enable importers to obtain refunds sooner, given that litigation over the impact of liquidation on refund eligibility could take a considerable period of time. 

When considering the potential refund amount that could be impacted if courts conclude that liquidation cuts off the USCIT’s ability to order refunds, importers should consider both:

1. the value of IEEPA tariffs paid on entries scheduled to liquidate in the near future, and
2. the possibility that the administration could respond to a Supreme Court decision finding the IEEPA tariffs unlawful by immediately liquidating large numbers of entries on which IEEPA tariffs have been collected, even though the ordinary liquidation deadline for those entries was not approaching.

Protests

If entries liquidate, ordinarily, the next step to preserve the right to challenge the handling of the entry is the filing of a protest with CBP. However, the impact of filing a protest in the present context is uncertain.

It is possible that CBP will take the position that the filing of a protest is a necessary prerequisite to obtaining a refund (administratively or in court) for a liquidated entry. Where a protest is an available option for obtaining relief, it must be used before proceeding to the USCIT. However, an importer need not file a protest where CBP itself made no decision, merely played a ministerial role, and therefore can offer no relief. Here, we think that there is a significant possibility that a court would find that CBP does not make a decision when it collects tariffs imposed pursuant to an executive order, and that the filing of a protest is therefore unnecessary before the filing of a court case seeking IEEPA tariff refunds, even for liquidated entries.

Due to its apparently ministerial role, it is possible that CBP will take the position that it cannot, in response to a protest, refund IEEPA tariffs paid on liquidated entries even if the underlying IEEPA tariff order has been ruled unlawful by the Supreme Court. In this scenario, importers seeking refunds for IEEPA tariffs paid on liquidated entries would have to file a case in the USCIT, and the refund would hinge on the USCIT’s view of its ability to order refunds for liquidated entries.

Because filing a protest following liquidation may help to preserve refund rights, it is a step that importers should consider very seriously if any entries on which they paid IEEPA tariffs liquidate, even though it is also possible that this step will prove unnecessary.

Next Steps for Importers

We recommend that importers assemble relevant documentation and perform a cost-benefit analysis about potential litigation based on the importer’s specific situation.

Specific advisable steps include: 

• obtaining from ACE or your customs broker full and complete records for all entries on which you have paid IEEPA tariffs;
• carefully monitoring the liquidation status and likely liquidation dates for entries on which you paid IEEPA tariffs; and
• carefully monitoring the amount of IEEPA tariffs that you have paid on entries scheduled to liquidate in the near future, and overall.

Cozen O’Connor’s international trade attorneys can assist you in considering and implementing the approach that makes sense for your business.