by Craig Brightup, The Brightup Group —
In the aftermath of the U.S. Supreme Court’s decision that International Emergency Economic Powers Act (IEEPA) tariffs aren’t legal, Customs and Boarder Protection (CBP) carried out orders from the U.S. Court of International Trade (CIT) and quickly set up a system to process IEEPA refunds. Thus, on April 20, CBP launched its Consolidated Administration and Processing of Entries (CAPE) tool in the Automated Commercial Environment (ACE) portal.
CAPE is live for Phase 1 IEEPA refund claims with Phase 1 essentially limited to unliquidated entries and certain entries within 80 days of liquidation. The CAPE system is designed to consolidate IEEPA tariff refunds instead of doing their processing on an entry-by-entry basis. As such, brokers and importers of record can submit eligible CAPE declarations via the portal and when validated, refunds with interest will be consolidated and paid out in one lump sum.
Regarding turnaround time, CBP has stated “valid IEEPA refunds will generally be issued within 60-90 days following acceptance of a CAPE Declaration, unless compliance concern requires further CBP review.” Despite initial glitches with the CAPE system, CBP informed the CIT on April 28 that importers had successfully submitted more than 11.2 million entries, and more than 1.7 million imports had been validated and were ready for refunds. Following this, on May 4, CBP said the first IEEPA tariff refunds made via ACH payments would start as soon as May 12.
Pivoting to existing tariffs, on February 24, President Trump shifted the IEEPA tariffs to 10% tariffs under Sec. 122 of the Trade Act of 1974. IEEPA exemptions continue under Sec. 122 as do final trade deals. However, Sec. 122 tariffs are temporary and limited to 150 days which in this case means they expire on July 24, 2026.
Therefore, Sec. 122 tariffs are a temporary strategy to give the Administration more time to implement a replacement tariff regime under Sec. 301 of the Trade Act of 1974 and Sec. 232 of the Trade Expansion Act of 1962. The Dept. of Commerce has Sec. 232 investigations focusing on a variety of sectors similar to those that resulted in steel, aluminum, and copper tariffs. But it’s the new Sec. 301 investigations by the U.S. Trade Representative (USTR) that are getting most of the attention with Treasury Sec. Bessent saying the new 301 tariffs will be in place when the 122 tariffs expire.
On March 11, USTR initiated Sec. 301 investigations into 16 economies for “structural excess capacity and production in certain manufacturing sectors” which the Administration believes has led to large and persistent trade surpluses and other issues. The economies being investigated are Bangladesh, Cambodia, China, India, Indonesia, Japan, Malaysia, Mexico, Norway, South Korea, Singapore, Switzerland, Taiwan, Thailand, Vietnam and the EU. USTR took comments and scheduled hearings starting May 5. After this stage, USTR will have to put out proposed remedies and do another round of notice and comment which should be the best opportunity to push for products to be pulled from the list.
USTR also initiated a second set of 301 investigations involving 60 economies for a failure to ban “goods produced with forced labor” because such foreign producers have an “artificial cost advantage.” USTR requested consultations with the governments of these economies and also took public comments through April 15 and held hearings on April 28-29.
