Trump Administration Appeals $166 Billion IEEPA Tariff Refund, Fighting Over Who Gets Paid Without Suing
The Supreme Court struck down the IEEPA tariffs in February 2026, but the harder fight is the unwinding: how the government returns roughly $166 billion, and whether CIT Judge Eaton's court-wide refund order reaches importers that never sued. With that order now at the Federal Circuit on appeal and mandamus, and Section 122 generating its own refund exposure, the operative question for importers is which entries CBP will actually pay back.
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Evidence base16 records used
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The IEEPA tariffs are dead, and the fight now is how to give $166 billion back
When the Supreme Court struck down the IEEPA tariffs on February 20, 2026, it resolved the legal question that had dominated trade policy for a year. It did not resolve the harder one that came next: how the government returns roughly $166 billion collected under orders that are now invalid. That question is before the Federal Circuit, where the administration has filed a notice of appeal, a mandamus petition, and a request for a stay.
The dispute is narrow on its face and large in its consequences. CIT Senior Judge Richard Eaton has ordered CBP to refund duties on every affected entry, including those of importers that never sued. The Justice Department calls that a universal injunction of the kind the Supreme Court restricted in 2025. Eaton calls it court-wide reliquidation by the one court with exclusive jurisdiction over tariff claims. Underneath that label fight sits a second, more technical question: whether customs entries that have already finally liquidated can be refunded at all without each importer bringing its own case.
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For import teams, the headline is the refund. The operative question is narrower: which of your entries CBP will actually pay back without a lawsuit, and how soon.
What the Court decided, and what it left open
The decision held 6-3, in an opinion by Chief Justice Roberts, that IEEPA's authority to "regulate … importation" does not extend to imposing tariffs, which fall within Congress's taxing power. It said nothing about how collected duties would be returned, leaving the remedy to the lower courts. Justice Kavanaugh, in dissent, warned the refund process would be "a mess." Within hours of the ruling the President terminated the tariffs and signed a proclamation imposing a temporary surcharge under Section 122 of the Trade Act of 1974, which allows duties of up to 15% for up to 150 days. CBP stopped collecting IEEPA duties as of February 24.
Estimates of the amount owed vary by date and method, but they are broadly consistent. The figure the courts use is $166 billion, which Eaton cites repeatedly ("This case involves $166 billion"). Penn Wharton projected up to $175 billion through February, with a bottom-up estimate of $164.7 billion through January, while CBP reported actual collection of $133.5 billion as of mid-December 2025. Cato, citing Bloomberg Economics, puts the figure at about $170 billion. The delay is expensive: Cato estimates interest accruing at roughly $23 million a day, about $700 million a month, on top of the principal. The scale is also unusual, with duties drawn from roughly 34 million entries filed by more than 301,000 importers.
How the refund order reached importers who never sued
Chief Judge Mark Barnett assigned every IEEPA refund suit to a single judge, Eaton. In Atmus Filtration v. United States, expanded in late March and reissued April 7 in Euro-Notions Florida v. CBP, Eaton directed CBP to refund duties on "any and all" affected entries, whether or not the importer had gone to court. The government reads that as the universal relief CASA bars. Eaton reads it as the only court with jurisdiction doing its job. The sequence moved quickly.
Date
Development
February 24, 2026
The V.O.S. plaintiffs (led by former Solicitor General Neal Katyal) ask the Federal Circuit to issue its mandate immediately.
March 2, 2026
The Federal Circuit, ruling per curiam with eleven of twelve active judges, denies the government's request for a roughly 90-day pause and returns the case to the CIT.
March 4, 2026
Eaton, in Atmus, orders CBP to liquidate open entries without IEEPA duties and reliquidate non-final ones, holding that every affected importer of record benefits from Learning Resources, whether or not it sued.
March 6, 2026
Eaton pauses immediate compliance so CBP can build a refund system, after the agency stated that its existing systems could not handle it.
March 27 / April 7, 2026
Eaton expands and clarifies the order and designates Euro-Notions Florida as the lead case.
April 20, 2026
CAPE Phase 1 launches.
May 27, 2026
Eaton orders Commissioner Scott to appear in person on June 9.
May 29, 2026
The Justice Department moves to narrow the order and excuse Scott. Eaton denies it the same day.
Early June 2026
The Justice Department files its notice of appeal and a mandamus petition with stay request at the Federal Circuit.
Why Category 3 is the whole case
The contested question is not whether refunds occur, but which importers receive them without filing suit. Under 19 U.S.C. § 1514, once an entry finally liquidates it is "final and conclusive upon all persons" unless a protest was filed within 180 days or a timely suit was brought, and CBP says it cannot reliquidate one without a court order. The government accordingly divides the $166 billion into three categories.
Category
Entries
Where it stands
1
Still open or not yet final
CBP concedes the obligation and is paying these through CAPE.
2
Finally liquidated, importer sued
The government accepts it must refund, but wants importer-specific reliquidation orders once its systems allow.
3
Finally liquidated, importer did not sue
Contested. The government says these can be reached only through individual suits. Eaton's order sweeps them in.
Category 3 is where the appeal lives. Eaton's principal counter-authority is J. Conrad Ltd. v. United States (CIT 2020), which held that finality of liquidation is "no bar to the Court's ordering appropriate relief." It is supported by a line of cases, including the Section 301 HMTX litigation and AM/NS Calvert, holding that where CBP acts in a purely ministerial capacity, collecting a duty later held unlawful rather than making a classification decision, the protest deadline does not apply and the liquidation is not truly final. That is the question Category 3 turns on.
The CASA question the Federal Circuit must answer
The uncertainty traces to the previous summer. In Trump v. CASA (June 27, 2025), a 6-3 majority by Justice Barrett held that federal courts generally may not enjoin a policy as to non-parties. Relief extends only as far as necessary to make the named plaintiffs whole. The Court grounded the holding in the Judiciary Act of 1789 rather than the Constitution and reserved the constitutional question. That statutory basis is the opening Eaton relies on.
Eaton's position is that CASA does not automatically govern the Court of International Trade, because the CIT operates under a separate statute, the Customs Courts Act of 1980, codified at 28 U.S.C. §§ 1581 and 1585, rather than the general equity tradition CASA addressed. Section 1585 grants the CIT "all the powers in law and equity of … a district court." On that basis Eaton reasons that the CIT's nationwide, exclusive jurisdiction over tariff claims makes a court-wide order not universal in the CASA sense, but the action of the only court that can hear the claims. He adds that the Uniformity Clause supports treating importers consistently, and that because he hears every IEEPA refund suit, requiring each importer to file separately would deny relief to those that have not. The argument is substantial, but it is his construction rather than settled law, and it is the question the Federal Circuit will now address.
The government's response is direct: the order "exceeds the Court's jurisdiction and equitable authority under Trump v. CASA," and should be limited to the named plaintiffs. Its strongest precedent is that the Federal Circuit already vacated the CIT's earlier merits-stage universal injunction in V.O.S. Selections and remanded in light of CASA, though, as Troutman Pepper notes, that concerned the original injunction rather than the refund order now on appeal.
The Justice Department also faces a problem of its own making. Through 2025 and into January 2026 it told courts repeatedly that refunds would be available if the tariffs were struck down, and used that representation to oppose preliminary injunctions. In AGS Company Automotive Solutions v. CBP the CIT held the government estopped from reversing that position, finding it had agreed the court could order reliquidation and refunds for unlawfully collected duties. Changing course now carries that liability.
The testimony fight runs on a parallel track. The government moved to excuse CBP Commissioner Rodney Scott from testifying under the apex doctrine, the principle that a Senate-confirmed agency head should not be compelled to appear where a subordinate can provide the same information, and it offered substitutes, including an official who had already filed eight status declarations. Eaton was not persuaded. In a two-page order he described Scott as "both a policy maker and an administrator" whose testimony was needed to determine whether the government intends to refund "importers both large and small," noting that most refunds to date have gone to large importers. To win mandamus, the government must meet the Cheney standard: no other adequate remedy and a "clear and indisputable" right to the writ.
Four questions will decide the case: whether CASA applies to the CIT, whether finally liquidated entries can be refunded without individual suits, whether a confirmed Commissioner can be compelled to testify, and whether the government's earlier representations estop it now.
CAPE: what it covers, and what it leaves out
For the entries it covers, CAPE is the quickest route to a refund. An importer or broker submits a single declaration, a CSV of up to 9,999 entries, through the ACE portal. CBP removes the IEEPA Chapter 99 codes, recalculates and reliquidates, and issues a consolidated ACH refund with interest, generally within 60 to 90 days. The limitation is coverage. Phase 1 handles unliquidated entries and recently liquidated entries within CBP's voluntary reliquidation window, described in practitioner alerts as roughly 80 days against the 90-day statutory frame of 19 U.S.C. § 1501, which CBP puts at about 63% of affected entries. It excludes reconciliation entries, drawback claims, entries with AD/CVD pending, TIB and duty-deferral entries, and anything finally liquidated. Later phases are planned but unscheduled. Volume is high regardless: by late May CBP reported about $85 billion accepted for processing and roughly $20.6 billion cleared for disbursement, across more than 100,000 declarations covering millions of entries.
Section 122: the same vulnerability, the opposite remedy
On the day it lost on IEEPA, the administration invoked Section 122, a balance-of-payments authority not previously used, which permits a surcharge of up to 15% for up to 150 days, to impose a 10% global tariff effective February 24 and set to expire July 24, 2026. On May 7 a three-judge CIT panel held it unlawful in State of Oregon / Burlap & Barrel v. United States (Slip Op. 26-47). The defect was definitional: "balance-of-payments deficits" in Section 122 is a term of art from 1974, tied to the fixed-exchange-rate system of that period, rather than a reference to the trade or current-account deficits the administration relied on.
The remedy is the point worth holding onto. Where Eaton ordered broad relief, this panel limited it to the three plaintiffs with standing (Burlap & Barrel, Basic Fun, and Washington State), dismissing the other 23 states for lack of importer standing. The Federal Circuit entered an administrative stay on May 12, and follow-on suits have begun to arrive (Cleaner's Supply on May 25, Tarte Cosmetics on May 29). CAPE does not process Section 122 refunds. The broader lesson for the administration is that its replacement tariff carries the same structural vulnerability as the one it replaced: large-scale collection under contested statutory authority, followed by refund exposure before the first dispute is resolved. Treasury Secretary Bessent has indicated that combining Sections 122, 232 and 301 would leave 2026 revenue "virtually unchanged", which points to replacing invalidated authority through narrower trade statutes faster than the refund exposure can be resolved.
What to do before July
Map the exposure first. Pull entry data from ACE (the ES-003 Entry Summary Detail report, filtered for Chapter 99 IEEPA codes 9903.01.xx and 9903.02.xx) and sort it into the three categories above. For open and recently liquidated entries there is little reason to wait: Category 1 refunds are being paid regardless of the appeal, interest continues to accrue, and CAPE declarations can go in now once ACH banking is registered in ACE.
The real decision is Category 3. Finally liquidated entries with no suit on file are the exposure most at risk if the Federal Circuit narrows or stays Eaton's order. Counsel can advise whether an importer-specific § 1581(i) action is worth filing to secure relief independently. The roughly two-year limitations period runs to about February 2027, so there is time, but some firms currently advise waiting, and the decision turns on the amount at stake and tolerance for risk.
Treat Section 122 as a separate track. CAPE does not process it, so counsel can advise whether protests (§ 1514, 180-day deadline), post-summary corrections, or a separate CIT action are needed to preserve those claims, since an IEEPA-only filing may not. And review contracts now: pass-through and refund-entitlement terms will decide who ultimately keeps the money, and disputes between importers and their customers over that question are coming.
A few outcomes would change the calculus. If the Federal Circuit stays the court-wide order, non-suing importers with finally liquidated entries have stronger reason to file individually. If it denies both the stay and mandamus, CAPE continues and the pressure to litigate eases. If it affirms Eaton's view that the CIT is not bound by CASA, the decision would be a landmark in its own right, establishing that the trade court can grant court-wide relief ordinary district courts now cannot. On Section 122, the dates that matter are the July 24 expiration and the Federal Circuit's ruling on the stay. Congress may yet act as well: the Tariff Refund Act of 2026 (S. 3905) would require IEEPA refunds within 180 days and prioritize small businesses, while rebate bills (HR 6781, HR 7865) take a different approach, though a divided Congress makes any of it unlikely before the midterms.
Two cautions before relying on any of this. The situation is still moving: as of June 3 the June 9 hearing had not occurred, the Federal Circuit had not ruled on the petition or the stay, and no briefing schedule had been set, so treat the appellate posture as open. The exact labels and dates of the government's late-May and early-June filings vary across firm summaries and should be checked against the CAFC and CIT dockets before being quoted. And on the numbers, the roughly $85 billion is accepted for processing and the roughly $20.6 billion cleared for disbursement, which is not the same as money already paid out.