Federal authorities are moving forward with plans to establish a streamlined system for refunding billions of dollars in tariffs that courts have declared unlawful.
Brandon Lord, who heads the trade policy and programs directorate at U.S. Customs and Border Protection, informed the Court of International Trade on Friday that his agency is developing a simplified refund mechanism. According to Lord’s court submission, the new system should be operational within 45 days and will demand very little documentation from importing businesses.
This development follows Wednesday’s court order requiring the federal government to reimburse all importers for unlawful tariffs, including accumulated interest. U.S. Court of International Trade Judge Richard Eaton ruled that every importer on record deserves compensation following the Supreme Court’s decision invalidating the substantial import taxes that former President Donald Trump implemented under the 1977 International Emergency Economic Powers Act.
The proposed refund system must receive Judge Eaton’s approval before implementation can begin.
Lord’s court filing revealed staggering numbers: more than 330,000 importing companies have submitted over 53 million entries to CBP since March 4, resulting in approximately $166 billion in tariff payments that must now be returned.
Under existing procedures, Lord calculated that processing these refunds would consume more than 4.4 million employee hours. He emphasized that reassigning all staff to refund processing full-time would be impossible, explaining that such a move would severely compromise CBP’s other critical operations, including revenue protection duties and essential national security responsibilities.
However, Lord expressed confidence in the agency’s ability to create and deploy an innovative system that will consolidate and expedite both refund and interest payments within the 45-day timeframe.
“This new process will require minimal submission from importers,” Lord stated in his filing. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.”
Lord also highlighted a significant procedural hurdle: while CBP transitioned to electronic-only refunds as of February 6, the vast majority of eligible importers have not yet enrolled in the digital payment system. Of the 330,566 companies that paid the contested tariffs, only 21,423 have finished setting up their accounts to receive electronic refunds.
“Until importers complete the process to receive refunds electronically, the refunds will be rejected,” Lord warned in his statement.
