Six Gold Pens: The IEEPA Tariff Refund Field Guide for Small Importers

Law Smith

Founder & President, Tocobaga

Law Smith is the Founder and President of Tocobaga, a Tampa-based ROI-focused marketing agency and SMB advisory. He has helped carriers, brokers, and 3PLs build B2B lead generation programs, shipper acquisition campaigns, and brand infrastructure that earns credibility in an industry where relationships win lanes and RFP timing is everything. With 1,000+ SMBs advised and 600+ campaigns executed, Tocobaga understands that in logistics, being visible at the right moment is the margin. Tocobaga is a Google Partner and Squarespace Gold Partner headquartered in Ybor City.

In the spring of 1930, an economist named Paul Douglas drafted a statement he hoped would kill a bill. Douglas would later represent Illinois in the U.S. Senate, but that spring he was a professor with a petition, and the bill in his sights was a tariff that had started life as a modest promise of relief for American farmers.*,† By the time it reached the Senate floor, the farm bill had become something else entirely. Richard Strout of the Christian Science Monitor, looking back half a century later, wrote that by 1930 "every business interest in the country was asking Congress for protection."†

Two men steered it. Reed Smoot, the Utah senator, chaired the Senate Finance Committee, where lobbyists pressed for one increase after another. Willis Hawley, a Republican, chaired House Ways and Means, where his allies set the farm problem aside and pushed industrial rates to new highs.* The Senate passed the bill on June 13, 1930.*

Douglas's petition went to the White House carrying the signatures of 1,028 economists, and it asked President Herbert Hoover to veto the bill.† Hoover signed the Tariff Act of 1930 anyway, on June 17, with six gold pens.† Trading partners had started raising their own tariffs before enactment, and international trade froze.* Within two years, 25 countries had built retaliatory tariffs of their own.†

Voters noticed. In 1932 they removed both Smoot and Hawley from office and handed Democrats large majorities in both chambers.* The men lost their jobs. The statute kept its job. The Tariff Act of 1930 still lives in Title 19 of the U.S. Code, and the sections that govern how an import entry is finalized, how a decision gets protested and how interest is paid on a refund still carry their 1930 numbering. Smoot-Hawley is not just a cautionary tale from a history class. It is the wiring inside the refund machine American importers are standing in front of right now.

That is the lesson of the six gold pens. A tariff takes one signature to impose. Getting the money back takes paperwork, deadlines, an importer of record number, a bank account registered with the government and, sometimes, a lawsuit. On February 20, 2026, the Supreme Court ruled that the emergency tariffs imposed under the International Emergency Economic Powers Act were never authorized.‡,§ About $166 billion had been collected on more than 53 million entries from more than 330,000 importers.‖ The money is flowing back. It flows only to the businesses that file.

Tocobaga, the Ybor City firm in Tampa behind SolvingHow.com, is a marketing agency and SMB advisory, not a customs brokerage, and nothing here is legal or customs advice. But Law Smith, Tocobaga's founder and president, has spent the year fielding the same question from manufacturers, e-commerce brands, distributors and PE-backed platforms, usually phrased the way owners type it on Reddit and X at midnight: "Has anyone successfully gotten tariff refunds back yet? What's the real process and timeline looking like for small importers?" The honest answer, as of October 29, 2026, is yes. Billions have gone out. The process is real, phased, picky and partly stuck in court. What follows is the field guide: what the Court decided, who gets paid, how CAPE works, where small importers get trapped, what to do about the class action, which tariffs are still on and what to do with the cash. Every importer should run its own entries past a licensed customs broker or a trade attorney.

What did the Supreme Court decide about IEEPA tariffs?

The Supreme Court held 6 to 3 on February 20, 2026, that the International Emergency Economic Powers Act does not authorize the president to impose tariffs.§ The case, Learning Resources, Inc. v. Trump, was decided together with Trump v. V.O.S. Selections; the Court affirmed the Federal Circuit's ruling against the tariffs in V.O.S. Selections and vacated the Learning Resources case on jurisdictional grounds.‡

In plain English, the emergency tariffs of 2025 lost their legal footing. That includes the trafficking tariffs on Canada, Mexico and China imposed February 1, 2025, and the worldwide reciprocal tariffs imposed April 2, 2025.¶ Smoot and Hawley, for all their faults, had to move their tariff through both chambers of Congress and get a president's signature. The 2025 emergency tariffs took a shortcut around Congress, and the shortcut is what the Court rejected.

The ruling did not hand anyone a check. It created a right to one. The machinery came next. On March 4, 2026, Judge Richard Eaton of the U.S. Court of International Trade, in a case brought by Atmus Filtration, ordered U.S. Customs and Border Protection to liquidate all unliquidated entries "without regard to IEEPA duties" and to reliquidate liquidated entries whose liquidation was "not final." The order covered all importers, not just the plaintiff, and put roughly $165 billion in refunds in play.‖

Put that number on a single business. Divide $166 billion by 330,000 importers and the average is about $503,000 per importer. The average is a liar here, inflated by the largest importers, so shrink it. For a $5 million distributor running a 3 percent net margin, which is $150,000 a year in profit, a $60,000 refund is 40 percent of the year's earnings sitting in a federal account.

The ruling also did not end tariffs. A replacement 10 percent worldwide surcharge under Section 122 of the Trade Act of 1974 took effect February 24, 2026, and other authorities took over after it expired.** The refund question and the "what am I paying now" question are separate problems, and owners who blend them make bad decisions on both.

Where each tariff refund path stood as of October 29, 2026, who it fits and the first move for a small importer.

Refund path	Who it fits	Status, late October 2026	First move
CAPE Phase 1	Importers of record with unliquidated entries or entries liquidated within 80 days	Open since April 20, 2026; pays by ACH, typically 60 to 90 days after acceptance	Enroll for ACH refunds and file through a licensed broker
CAPE Phase 2	Entries flagged for reconciliation with no reconciliation entry filed	Open since June 29, 2026	Confirm flags and liquidation dates with the broker
CAPE Phase 3	Court plaintiffs with finally liquidated entries	Open since October 6, 2026 for plaintiffs who gave CBP an importer number by July 30; widened October 20 to those who gave one by August 13	Follow counsel and watch for new CBP instructions
Freestyle World class	Non-plaintiff importers that paid IEEPA duties February 1, 2025 to February 19, 2026	Certified October 8, 2026; no refund order yet	Quantify finally liquidated entries and calendar deadlines
Individual court suit	Importers with large finally liquidated exposure	Nearly 4,000 suits filed; earliest conservative deadlines in early 2027	Get a fixed-fee quote from trade counsel
Courier pass-through	Buyers whose duties were billed by UPS, FedEx or DHL	Carriers refunding as CBP pays them (CBS News, 2026)	Check the carrier portal or account credits
DDP supplier claim	Buyers whose foreign supplier was importer of record	No CAPE path; contract claim only	Send a written request citing the contract
Section 122 refund	Importers that paid the 10 percent surcharge, February 24 to July 24, 2026	Refunds limited to three plaintiffs and stayed on appeal	Track entries and ask counsel about protective filings

Has anyone actually gotten an IEEPA tariff refund back yet?

Yes. Through October 2, 2026, CBP had accepted about $136.6 billion in potential and certified refunds into its CAPE system and had sent about $126 billion to the Treasury Department for disbursement.†† The Penn Wharton Budget Model calculates that the certified amount equals about 76 percent of the roughly $166 billion collected under IEEPA.‡‡

The pace has been unusual for a federal agency. In the first six weeks after CAPE opened on April 20, 2026, CBP processed IEEPA refunds on nearly 8.5 million entries. In the entire prior fiscal year, CBP processed refunds of any kind on only 338,000 entries.§§ That is roughly 25 years of normal refund volume in six weeks.

The money also reached people who have never filed a customs entry. UPS told customers it applied for $500 million in the first phase and expected about $5 billion in total, with customer refunds arriving one to three months after UPS is reimbursed. FedEx said it was issuing $800 million and built a portal that checks up to 100 tracking or entry numbers at a time. DHL said its refunds go out automatically once CBP pays it.‖‖

So the Reddit question has an answer, but the answer splits three ways. Importers that used a customs broker, kept their entry data clean and had ACH refund enrollment in place have, in large numbers, been paid. Importers whose entries had already finally liquidated are mostly still waiting. And businesses that were never the importer of record at all are learning that the check went to someone else. Those three groups are who the rest of the field guide is built for.

Who is entitled to an IEEPA tariff refund?

The importer of record is entitled to the refund, and CBP pays only the importer of record or a notify party that importer designated on CBP Form 4811 before the entry liquidated.¶,‖‖ A business that paid higher prices to a supplier, a distributor or a marketplace seller has no claim against CBP; any claim it has runs against the importer of record, under their contract.¶

That sounds technical. It is the whole game. The importer of record is the party whose number appears on the entry, who owes the duty and who answers for the paperwork. For a Connecticut machine shop that brings in castings through its own customs broker, that is the shop. For a Mississippi furniture retailer that buys landed, duty-paid goods from a domestic distributor, it is the distributor, not the retailer. For a Nashville Shopify brand that orders samples by express courier, it may be the courier acting for the shipper. Same tariff, three different parties, one right to the money.

Here the 1930 statute earns its keep. Smoot-Hawley's legacy is not only the rates Reed Smoot and Willis Hawley wrote. It is the plumbing. The rules for liquidating an entry, protesting a decision and paying interest on a refund still sit in the Tariff Act of 1930, as amended. Interest on IEEPA refunds accrues under 19 U.S.C. 1505(c) from the date of deposit to the date of refund.¶ That plumbing has a bias, and the bias favors whoever holds the paperwork.

Census data shows how many small businesses that plumbing touches. In 2024, 232,804 of the 239,231 identified U.S. importing companies, about 97 percent, were small and mid-sized firms with fewer than 500 employees, and they accounted for roughly 31 percent of known import value.¶¶ The refund is not a Fortune 500 story with a small business footnote. It is a small business story with a few very large checks attached.

How does the CAPE tariff refund process work, phase by phase?

CAPE, short for Consolidated Administration and Processing of Entries, is the module inside CBP's Automated Commercial Environment that processes IEEPA refunds, and importers must submit claims through it rather than wait for automatic refunds.‖ The importer of record, or the licensed customs broker that filed the original entries, uploads a declaration listing eligible entry numbers; CBP strips the IEEPA lines, recalculates the duty and pays the difference with interest by ACH.¶

The mechanics are almost aggressively plain. The filer logs into the ACE Portal, opens the CAPE tab, downloads a template with a single column for entry numbers, lists up to 9,999 entries per declaration, saves the file as a CSV and uploads it. ACE validates the file, then validates each entry, then issues a claim number.¶ Trade consultants, unlicensed freight forwarders, foreign suppliers and consignees cannot file directly.¶

The phases matter more than the form. CBP built CAPE in layers, and each layer opened a different set of entries:

• Phase 1, April 20, 2026: unliquidated entries and entries liquidated within the previous 80 days. CBP estimated this covered about 63 percent of entries owed refunds.***,¶

• Phase 2, June 29, 2026: entries flagged for reconciliation that were unliquidated or recently liquidated and had no reconciliation entry filed, an estimated 2.8 million entries and $28.7 billion in potential refunds.§§

• Phase 3, October 6, 2026: finally liquidated entries, but only for court plaintiffs with court-ordered reliquidation who gave CBP a valid importer of record number by July 30, 2026.††

Phase 3 is the one that stings. By launch day CBP had accepted 477 Phase 3 declarations covering 425,517 entries, and the capability reaches roughly $11.4 billion, or 6.9 percent, of IEEPA tariffs.†† As of October 29, 2026, importers that never sued are locked out of Phase 3 entirely. On October 20, CBP widened Phase 3 to plaintiffs that won a reliquidation order and gave CBP a valid importer of record number between July 31 and August 13. Plaintiffs that supplied a number after August 13 will get access at a later date, and CBP has published no date.¶,††,†††

Some entries sit outside every phase: entries covered by drawback claims, entries where a surety paid the duty, warehouse entries that have not liquidated, and antidumping or countervailing duty entries with liquidation instructions still pending.¶ Those need individual attention from a broker, and an owner who assumes CAPE swept them up automatically is assuming wrong.

How long do IEEPA tariff refunds take, and why do some stall?

CBP's published guidance points to 60 to 90 days from acceptance of a CAPE declaration to payment, absent compliance concerns, and a March 2026 CBP declaration referenced a 45-day internal target for simpler cases.¶,‡ Practitioners treat both numbers as planning horizons, not promises.¶

The stalls are mostly self-inflicted. Through October 2, 2026, filers had submitted 297,887 CAPE declarations, and only 209,262 passed file validation. That is about three in ten declarations bouncing before CBP looked at a single dollar. Another 6.2 million individual entries failed entry-level validation for reasons like a mismatched importer number, an entry number with the wrong length, an entry already claimed on an earlier declaration, or an entry with no Chapter 99 IEEPA code at all.¶

The most expensive mistake is the most boring one. As of October 2, 20,362 refunds worth about $1.1 billion had not been sent because the importer had no ACH refund information on file.¶ CBP pays these refunds electronically and holds the money until valid banking details arrive.‖,¶ Divide $1.1 billion by 20,362 and the average stranded refund is about $54,000. For a two-partner distributor in Memphis with an $18,000 monthly payroll, that is three months of wages parked in a federal account because nobody filled out a bank form. ACH refund enrollment is separate from ACH duty payment enrollment, a distinction that catches businesses that already pay duties electronically.¶

Other holds exist. CBP can offset a refund against certain debts the importer owes, and netting adjustments can shrink a refund on entries where duties were under-declared.¶ Neither is a reason to panic. Both are reasons to have a broker read the entry-level status report instead of celebrating the declaration-level acceptance.

Herbert Hoover needed six gold pens to start the trouble. A surprising share of the money coming back is waiting on one routing number.

What if a courier, freight forwarder or supplier was the importer of record?

If a courier, a forwarder acting as importer or a foreign supplier shipping delivered duty paid was the importer of record, CBP pays that party, not the buyer. The buyer's path runs through the courier's refund program or through a contract claim against whoever filed the entry.¶,‖‖

This is the trap that catches small e-commerce brands, marketplace sellers and anyone who ordered samples by express courier. Under delivered duty paid terms, or DDP, the seller agrees to deliver the goods with duties paid, which usually means the seller or its agent stands as importer of record. The buyer paid the tariff inside the price. The refund right sits somewhere else.

The big carriers have mostly made this easy. UPS said no customer action is required for its pass-through, FedEx built a refund portal that shows "Refund Not Yet Received from CBP" while money is pending, and DHL said its refunds go out automatically once CBP pays it.‖‖ A courier adds a lag, though. UPS estimated one to three months after it receives its own money from the Treasury.‖‖

Suppliers are harder. A Tennessee outdoor brand that bought DDP from a factory overseas has no CAPE path at all. There is no CAPE mechanism to redirect a refund to a consignee or a supplier's customer; those parties hold contractual claims against the importer of record.¶ That is a negotiation, not a filing. The brand should pull every DDP invoice from 2025, total the tariff charges the supplier passed through, and send a written request that cites the contract and the supplier's own refund. Some suppliers will pay. Some will offer a credit against next season's order. Some will go quiet. A credit is often the best realistic outcome, and it is still money.

For any business that will keep importing, the lesson is structural: know who the importer of record is before the next policy swing, not after. Some owners who chose DDP for simplicity are now weighing whether to become the importer of record through their own broker, so the next refund, if there is one, lands in their own account. Smoot-Hawley taught the same thing in reverse. The duty always lands on whoever holds the paperwork, and so does the refund.

What does the tariff refund class action mean for importers who never sued?

On October 8, 2026, Judge Richard K. Eaton of the Court of International Trade certified a class in Freestyle World, Inc. v. United States covering importers of record that paid IEEPA duties from February 1, 2025, through February 19, 2026, excluding importers that brought their own refund suits.**,‡‡‡ Certification is not a refund order: as of October 29, 2026, no class-wide injunction had been reported. The parties' proposed schedule, which will set the government's deadline to answer the class complaint, was due October 22, and no scheduling order had been reported by October 29.**,§§§

Three features matter for a small importer. First, membership is automatic. The class was certified under Rule 23(b)(2), so covered importers do not opt in and generally cannot opt out.‡‡‡,** Second, the class targets exactly the entries Phase 3 leaves out. It seeks an injunction directing CBP to liquidate or reliquidate covered entries regardless of liquidation status, and class members would still need to file CAPE declarations if it wins.‡‡‡ Third, it will take a while. BDO expects resolution to stretch into early 2027 or later, with a government appeal likely.‡‡‡

The class sits on top of a second fight. The Justice Department filed notices of appeal on June 3, 2026, arguing that the trade court cannot order refunds to importers that never sued and that the Supreme Court's 2025 decision in Trump v. CASA bars that kind of universal relief.§§ As of late October reporting, that appeal remained pending at the Federal Circuit, with oral argument not yet held and no ruling reported.††,§§§ A certified class is the plaintiffs' answer to the CASA argument, because a class is a party, and relief to a party is not relief to strangers.***

As of October 29, 2026, the latest confirmed public status for a non-plaintiff importer, drawn from court reporting through October 22, reads like this: inside the class, no class-wide refund order, a government appeal of the broader refund order still pending, and an open question about whether class membership pauses the two-year deadline for filing an individual suit.**,§§§ Trade press analysis in mid-October expected injunction briefing to run into December 2026 at the earliest, did not expect a court order to pay class members before the end of 2026, and did not expect any class member to receive a refund before the end of the first quarter of 2027; those are forecasts, not court dates.‖‖‖ Congress has a proposal in the mix too. The Tariff Refund Act of 2026, S. 3905, would require refunds within 180 days of enactment, with interest, and would prioritize small businesses. It is a bill, not a law.‡

Paul Douglas and his 1,028 economists were right about the tariff in 1930. Being right did not get anyone's money back then, and being in a class does not get anyone's money back now. A judge has to sign an order, and then a business has to file the paperwork that follows.

What is the strongest case for waiting on the class action instead of suing?

The strongest case for waiting is cost and coverage: the class already includes every non-plaintiff importer automatically, interest keeps accruing on refunds while the case runs, and the earliest conservative filing deadlines fall in early 2027.**,¶ For a small importer whose finally liquidated exposure is a few thousand dollars, an individual suit can cost more than it recovers.

Steelmanned fully, the waiting argument goes like this. Nearly 4,000 refund suits were pending at the trade court by mid-October, and the government has said it will not contest reliquidation for prevailing plaintiffs, which means the legal theory is settled and the fight is over remedy.***,**,¶¶¶ The class was built to carry everyone else. Interest under 19 U.S.C. 1505(c) runs from deposit to refund, so delay costs less than it looks.¶ Troutman Pepper Locke has written that filing could be deferred to at least February 4, 2027, without prejudice.*** And a Federal Circuit ruling could clarify the whole question before a dollar is spent on lawyers.

There is a literary warning about the other extreme. In Bleak House, Charles Dickens built a novel around Jarndyce and Jarndyce, a lawsuit that runs so long its costs swallow the estate everyone was fighting over. A $6,000 claim chased with a five-figure legal budget is a small Jarndyce of its own.

The case against waiting is concentration of risk. Class relief may take months and could be reversed on appeal.‡‡‡ Whether class membership pauses the statute of limitations is unresolved.** The two-year clock under 28 U.S.C. 2636(i) is measured conservatively from February 2025 for the trafficking tariffs on Canada, Mexico and China, which puts the first deadlines around February 2027, and from April 2025 for the reciprocal tariffs.¶ A business with six figures of finally liquidated entries is betting real money on a timetable it does not control.

The practical split most trade practitioners describe is size-based. Troutman Pepper Locke calls an individual suit the most certain path for importers with substantial finally liquidated exposure, and it recommends inexpensive protective protests where the 180-day window is still open, even though the trade court has held IEEPA collections are not protestable.*** Small exposure points toward relying on the class while calendaring every deadline. Either way, the call belongs to a trade attorney with the entry data in hand, made before the end of 2026, not in a panic in February 2027.

What tariffs are still in effect in 2026?

As of late October 2026, the main tariffs in force are Section 232 duties on steel, aluminum, autos and other sectors, Section 301 tariffs including new forced-labor tariffs of 10 or 12.5 percent on goods from 60 economies, 50 percent Section 338 duties on listed Canadian goods, and the suspension of duty-free de minimis treatment for low-value shipments.‡‡,**,****,†††† The average effective U.S. tariff rate was 7.1 percent in August 2026, up from 2.3 percent in January 2025.‡‡

Section 232 is the durable one. Steel and aluminum carry 50 percent for most countries and 25 percent for the United Kingdom, and coverage reaches finished goods containing those metals, including industrial machinery, HVAC equipment and auto components, after 400 product codes were added in August 2025.§ Penn Wharton puts the effective rate on steel and aluminum products at 39.8 percent and on autos at 13.8 percent.‡‡ A PE-backed HVAC distribution platform in its second add-on should model those costs as permanent, not temporary.

Section 301 is the new one. The U.S. Trade Representative opened investigations into 60 trading partners in March 2026 over failures to ban or enforce bans on forced-labor imports, issued final determinations July 23, and imposed tariffs of 10 or 12.5 percent effective July 24, 2026, with product exclusions and planned quotas for some textile and apparel imports from Bangladesh, Cambodia, Indonesia and Malaysia.** Importers have challenged them. The trade court heard argument September 30 and ordered supplemental briefing due October 16, and as of late October no decision had been reported and the duties remained in effect.**

De minimis is the one small sellers feel most. Duty-free treatment for low-value shipments was suspended August 29, 2025. The suspension survived the Supreme Court ruling under a separate executive order, the trade court upheld it on August 13, 2026, CBP issued interim rules in June 2026 suspending it indefinitely, and a 2025 statute repeals the exemption outright on July 1, 2027.**** A Shopify brand doing $4 million that built its model on cross-border parcels should price duty into every parcel as the new normal. China remains the most expensive major source, with an effective tariff rate of 24.3 percent in August.‡‡

The 1930 statute is loaded, too, and it has now been fired. Section 338 of the Tariff Act of 1930 allows tariffs of up to 50 percent on countries that discriminate against U.S. commerce.§ It sat unused for generations until July 20, 2026, when the president invoked it for the first time, citing Canadian measures on alcohol, dairy and motor vehicles. The result is a 50 percent duty on listed Canadian goods, covering nearly $20 billion in imports, in effect since August 2026, and USMCA origin does not generally exempt covered goods.††††,‡‡‡‡,§§§§ A New Jersey food importer sued in the trade court on October 20 to strike the duties down and win refunds for a class of importers, and a proclamation signed October 23 changes the product list effective October 30.‖‖‖‖,¶¶¶¶ Reed Smoot's handiwork is in more of the 2026 toolbox than most owners realize, and the sequel is familiar: within two years of Hoover's signature, 25 countries answered with tariffs of their own, and Canada announced counter-tariffs on $27.6 billion of U.S. goods, scheduled to begin September 8.†,‡‡‡‡

Is there a Section 122 tariff refund?

Not for most importers, as of late October 2026. The 10 percent Section 122 surcharge ran from February 24 to July 24, 2026; the trade court ruled 2 to 1 on May 7 that it exceeded presidential authority, but limited refunds to three plaintiffs, and the Federal Circuit stayed even that judgment pending appeal.** Nonparty importers are not covered.** Any importer that paid Section 122 duties should keep the entries and liquidation dates organized and ask counsel whether a protective filing makes sense before the appeal is decided.

Do customers get a share when a supplier receives a tariff refund?

Sometimes, and contract language usually decides it. If a contract allowed the seller to pass tariffs through to the customer, Deloitte's accounting guidance says the seller may need to record a refund liability to that customer, even before the government refund is recorded.***** A customer's request alone does not modify a contract, but implied promises and past business practice count.*****

Pass-through demands are arriving in two flavors. Business customers that paid an itemized tariff surcharge are asking for it back, and Sidley's guidance for lenders lists customer recoupment claims and consumer class actions among the claims that can shrink the real value of a refund.‡ On the consumer side, CBS News reported class actions against Amazon, Costco, Nike, Walmart and others in early stages, and trade attorneys called the legal footing shaky. One, Greg Husisian, said shoppers who simply accepted higher prices "don't have a claim."‖‖ Political pressure is a separate force: Senator Elizabeth Warren has been pressing seven major retailers about returning refunds to consumers.‖‖

The decision is part law and part retention math. A Tampa 3PL that added a line-item tariff surcharge to every invoice in 2025 has a documented trail and, quite possibly, an obligation. A Connecticut component maker that raised list prices and never mentioned tariffs has more discretion. Discretion is not a free pass. A distributor that keeps every dollar while its biggest account reads headlines about refunds is spending goodwill to save cash. Tocobaga's earlier piece on customer retention math, Norm's Stool Pays the Rent, makes the broader point that keeping a good account is far cheaper than replacing one. A partial credit to a top-ten customer may be the cheapest marketing a business buys this year.

Smoot-Hawley began as a narrow farm-relief bill and ended with every business interest in the country lining up for protection.† Refunds spread the same way. The check goes to one party, and within a week every party downstream has an opinion about who deserves it.

How should a small business account for a tariff refund?

Under U.S. GAAP, a business generally chooses between a loss recovery model, which can record a refund asset once recovery is probable but caps it at tariff costs already recognized, and a gain contingency model, which waits until the refund is realized or realizable; whichever it picks, it must apply consistently.***** For federal income tax, an accrual-method business generally includes the refund when its right to the money is fixed, and a claim still subject to government review may not be fixed until approval or payment.†††††

Details change the numbers. If some tariffed inventory is still on the shelf, Deloitte says reducing that inventory's carrying amount by the capitalized tariff is reasonable, rather than booking the whole refund as income.***** Statutory interest is treated as a gain contingency and is generally recognized only when realized or realizable, often in nonoperating income.***** Refund cash follows the original payment on the cash flow statement: operating if the tariff sat in inventory, investing if it was capitalized into equipment.*****

PE-backed companies and any business with a credit facility face two more traps. Refund proceeds can fall under extraordinary receipts sweep provisions in credit agreements, and refund income can distort EBITDA-based covenants and add-backs.‡ A platform company that celebrates a $900,000 refund and then finds its lender entitled to sweep it has learned an expensive lesson in reading its own loan documents.

Selling the claim is an accounting event too. Claim buyers reportedly paid up to 60 cents on the dollar by spring 2026, up from about 20 cents before the ruling.‡ Deloitte treats most funder arrangements as financing transactions rather than sales, so the obligation stays on the books until it is legally extinguished.***** At 60 cents, a $50,000 claim sells for $30,000, leaving $20,000 plus interest on the table in exchange for speed. That trade can make sense for a finally liquidated claim with no timeline. It rarely makes sense for an entry already sitting in CAPE with a 60-to-90-day payment horizon.

What should a small importer do right now to get a tariff refund?

Start with the bank form and the entry data, then sort every entry by liquidation status. The steps below, in order, cover what a broker or trade attorney will ask for. None of it is legal or customs advice, and every importer should work with a licensed customs broker or trade attorney on its own entries.

• Confirm access. Make sure the importer of record has ACE Portal access, or confirm the licensed customs broker that filed the entries will file CAPE declarations on the business's behalf.¶

• Enroll for ACH refunds. Refund enrollment is separate from duty payment enrollment, and CBP holds refunds without it.¶

• Pull every entry from February 1, 2025, through February 2026 that carries an IEEPA Chapter 99 line, and confirm who the importer of record is on each one.¶

• Sort entries into four buckets: unliquidated or liquidated within 80 days, reconciliation-flagged, finally liquidated, and excluded types such as drawback or surety-paid entries.¶

• File CAPE declarations for eligible entries, then check entry-level status, because entries can be rejected inside an accepted declaration.¶

• For courier shipments, use the carrier's refund process; for DDP supplier purchases, send a written refund request that cites the contract.‖‖

• For finally liquidated entries, decide with trade counsel before year-end whether to rely on the Freestyle World class or file an individual action, and calendar the earliest conservative deadlines in early 2027.**,¶

• Review customer contracts for pass-through language and book any refund liability before spending the refund.*****

• Choose an accounting model with a CPA and track statutory interest separately from the principal.*****,†††††

• Ignore unsolicited refund recovery pitches. CBP has published a fact sheet warning about CAPE refund fraud solicitations.‡‡‡‡‡

The first five steps are clerical. That is exactly why they get skipped. Among importers with CAPE-eligible entries, the ones still waiting in late October are rarely the ones with the weakest claims. They tend to be the ones with the messiest files.

What should a business do with tariff refund money?

A tariff refund is a one-time cash event, so the best uses are one-time investments with measurable returns, made after setting aside reserves for taxes, customer pass-through obligations and any lender sweep.*****,‡ The worked example below is hypothetical, but the arithmetic is the kind every owner should run before the ACH deposit hits.

Take a Nashville Shopify brand doing $4 million a year in outdoor gear. In 2025 it paid $196,000 in IEEPA duties across 36 formal entries filed by its customs broker, plus $12,000 in duties billed by an express courier on samples and rush shipments. Total exposure: $208,000.

Twenty-nine entries, carrying $148,000, were unliquidated when CAPE opened, so they went into a Phase 1 declaration. Seven entries, carrying $48,000, had finally liquidated, so they sit with the Freestyle World class unless the brand files its own suit. The courier's $12,000 comes back through the carrier. The Phase 1 money is 71 percent of the total and should arrive within CBP's 60-to-90-day guidance.¶ The courier money arrives one to three months after the carrier is paid.‖‖ The class money has no date. Sold today at 60 cents, the $48,000 claim would bring $28,800 and forfeit $19,200 plus interest.‡

Now the reserves. Say the brand charged two wholesale accounts an itemized tariff surcharge totaling $18,000. That is a likely refund liability, so $18,000 comes off the top. Phase 1 plus courier money is $160,000; less $18,000 leaves $142,000. Set aside an illustrative 25 percent for taxes, pending the CPA's actual view, and $35,500 goes to reserve. That leaves $106,500 of genuinely free cash.

Here is one disciplined split. Put $36,500 against the most expensive debt on the balance sheet. Hold $30,000 as a buffer against the tariffs that are still being collected on Section 301 goods and de minimis parcels. Put $40,000 into a 90-day marketing test with hard measurement. If the brand's blended customer acquisition cost is $48 and a new customer's first-year value is $150, $40,000 buys about 833 customers and roughly $125,000 in first-year revenue. At a 55 percent gross margin, that is about $68,700 of gross profit from a $40,000 spend, before a single repeat order.

The test has to be measured the way the refund was: entry by entry, channel by channel, cost per acquisition by cost per acquisition. Tocobaga's earlier field guides cover the measurement side, The Planes That Didn't Come Back on budget allocation and The Map Is Not the Pump on proving marketing ROI. The worst use of a refund is treating it as permission to stop repricing. The tariffs that replaced IEEPA are still being collected every day.

Who should a small importer call about a tariff refund?

A licensed customs broker or trade attorney should handle the refund itself, and a CPA should handle the books.¶,***** The question that comes right after, how to turn a one-time refund into durable growth and how to explain the whole episode to customers, is where a growth advisor earns a seat at the table.

That last part is the work Tocobaga does. The firm has advised 1,000+ small and mid-sized businesses, written 30+ business plans and executed 600+ integrated campaigns, and a refund conversation tends to become a planning conversation fast: reprice or absorb, credit the customer or keep the cash, test a channel or pay down the line. An intro call at (813) 534-1261, or a note to hello@solvinghow.com through SolvingHow.com, is the place to start. Tocobaga works on flat fees, never takes a percentage of ad spend, never auto-renews a contract and leaves every account and asset in the client's name. It is not for everyone. If the real need is a customs broker or a trade lawyer, Tocobaga will say so and point to one.

Why are tariffs so much easier to impose than to unwind?

Because imposing a tariff takes a signature, and unwinding one takes a process, and processes reward the organized. The Supreme Court ruled in February; the refund system opened in April; the last phase, for plaintiffs only, opened in October and widened on October 20; and the class of everyone else, certified October 8, still had no refund order in the latest reporting as of October 29, 2026.‖,††,**,†††

Paul Douglas got 1,028 economists to sign his letter.† Hoover signed the bill anyway. Reed Smoot and Willis Hawley lost their seats two years later, and 25 countries answered with walls of their own.*,† Nearly a century on, the statute they wrote still governs how entries are finalized, protested and refunded, and the refund window still pays only the businesses standing at it with the right form.

So the field guide reduces to three sentences. Know who the importer of record is. Register the bank account. File, or decide on purpose not to.

It took six gold pens to sign the tariff. It takes one boring form to get the money back. Sign the form.

What is CAPE in customs?

CAPE stands for Consolidated Administration and Processing of Entries, a module U.S. Customs and Border Protection built inside its Automated Commercial Environment to process refunds of the IEEPA tariffs the Supreme Court struck down in February 2026. An importer of record or its licensed customs broker uploads a CSV of entry numbers, up to 9,999 per declaration. CBP removes the IEEPA duty lines, recalculates what was owed and pays the difference, with interest, by ACH.

Do IEEPA tariff refunds include interest?

Yes. Interest on IEEPA refunds accrues under 19 U.S.C. 1505(c) from the date the duty was deposited to the date of the refund, at a rate set under the Internal Revenue Code, and CBP includes it in CAPE disbursements. Interest keeps running while litigation is pending. For financial reporting, Deloitte's guidance treats statutory interest as a gain contingency, so many businesses record it only when it is realized or realizable, separately from the principal refund.

Can a freight forwarder file a CAPE declaration?

Only if it is the licensed customs broker that filed the original entries, or the importer of record itself. Practitioner guidance from Great Lakes Customs Law notes that trade consultants, unlicensed freight forwarders, foreign suppliers and consignees cannot file CAPE declarations directly. A business that used an unlicensed forwarder should identify the licensed broker or importer of record on its entries, ask that party to file, and confirm ACH refund enrollment is complete.

Is a tariff refund taxable income?

Often, though timing and amount depend on the business's accounting method and facts. RSM explains that an accrual-method taxpayer generally includes an amount when its right to it is fixed and determinable, and that a claim still subject to government review may not be fixed until approval or payment. A refund can also adjust inventory or cost of goods sold rather than show up as pure income. A CPA should settle the treatment before the cash is spent.

What is the deadline to sue for an IEEPA tariff refund?

Suits at the Court of International Trade under 28 U.S.C. 1581(i) must be filed within two years after the claim accrues, and when a claim accrues is unsettled. Conservative planning measures from when the tariffs were imposed, which points to roughly February 2027 for the trafficking tariffs on Canada, Mexico and China and roughly April 2027 for the worldwide reciprocal tariffs. Whether membership in the certified class pauses that clock is unresolved, so counsel should calendar the earliest date.

Can consumers get a tariff refund?

Rarely, and not directly from the government. CBP pays only the importer of record, so a shopper who paid a higher shelf price has no claim against CBP, and trade attorneys quoted by CBS News doubt the consumer class actions filed against large retailers. Consumers who paid duties to a carrier on an overseas order are the exception: UPS, FedEx and DHL have committed to pass refunds to those customers once CBP reimburses the carrier.

Is the de minimis exemption back after the Supreme Court ruling?

No. The suspension of duty-free de minimis treatment for low-value shipments took effect August 29, 2025, and continued after the Supreme Court's IEEPA ruling under a separate executive order. The Court of International Trade upheld the suspension on August 13, 2026, CBP issued interim rules in June 2026 suspending it indefinitely, and a 2025 statute repeals the exemption outright on July 1, 2027. Low-value e-commerce parcels should be priced with duty included.

Should a business sell its tariff refund claim?

Only after comparing the discount with the wait. Sidley reported claim buyers paying up to 60 cents on the dollar in spring 2026, up from about 20 cents before the ruling, so a $50,000 claim might sell for $30,000. Entries already accepted in CAPE typically pay within 60 to 90 days, so selling those rarely makes sense. Finally liquidated entries with uncertain timing are where a sale can be rational, and existing credit agreements may restrict any sale.

Sources

*

U.S. Senate Historical Office. "The Senate Passes the Smoot-Hawley Tariff." United States Senate, accessed October 26, 2026. Reed Smoot chaired Senate Finance and Willis Hawley chaired House Ways and Means; the Senate passed the bill June 13, 1930; Paul Douglas drafted the economists' petition; trading partners retaliated and trade froze; voters removed both men in 1932. https://www.senate.gov/artandhistory/history/minute/Senate_Passes_Smoot_Hawley_Tariff.htm

†

Strout, Richard L. "A Great Folly's Golden Anniversary." Christian Science Monitor, June 17, 1980. Hoover signed the tariff June 17, 1930, with six gold pens; 1,028 economists signed Paul Douglas's petition; by 1930 "every business interest in the country was asking Congress for protection"; 25 countries retaliated within two years. https://csmonitor.com/1980/0617/061725.html

‡

Sidley Austin LLP. "IEEPA Tariff Refund Claims: Key Considerations for Lenders, Borrowers and Claims Purchasers." Sidley, April 30, 2026. The Court affirmed V.O.S. Selections and vacated Learning Resources on jurisdiction; claims reportedly traded up to 60 cents on the dollar versus about 20 cents before the ruling; sweep and covenant risks; recoupment claims; S. 3905 would require refunds within 180 days with interest and prioritize small businesses; 60 to 90 day refund timing. https://www.sidley.com/en/insights/newsupdates/2026/04/ieepa-tariff-refund-claims-key-considerations-for-lenders-borrowers-and-claims-purchasers

§

Kelleher, Mark. "After IEEPA: Which Tariff Authorities Does the U.S. Government Still Have and What Global Manufacturers Need to Know." Thomson Reuters Tax and Accounting, July 7, 2026. The Supreme Court ruled 6 to 3 on February 20, 2026; Section 232 steel and aluminum at 50 percent for most countries and 25 percent for the UK, with 400 product codes added in August 2025; Section 338 of the Tariff Act of 1930 allows up to 50 percent. https://tax.thomsonreuters.com/blog/after-ieepa-which-tariff-authorities-does-the-u-s-government-still-have-and-what-global-manufacturers-need-to-know/

‖

Skadden, Arps, Slate, Meagher and Flom LLP. "Tariff Refund Mechanism Takes Shape After Supreme Court's IEEPA Ruling." Skadden, March 24, 2026. About $166 billion collected on more than 53 million entries from over 330,000 importers; the March 4 Atmus Filtration order to liquidate entries "without regard to IEEPA duties" covering about $165 billion; CAPE requires importer claims; refunds rejected until ACH registration. https://www.skadden.com/insights/publications/2026/03/tariff-refund-mechanism-takes-shape

¶

Great Lakes Customs Law. "The IEEPA Tariff Refund Guide: How to File Your CAPE Declaration and Get Your Money Back." Great Lakes Customs Law, April 18, 2026, updated October 10, 2026. Filing steps and 9,999-entry limit; who can file; 60 to 90 day guidance and 45-day target; 297,887 declarations, 209,262 validated, 6.2 million entry failures and 20,362 refunds worth about $1.1 billion held for missing ACH as of October 2, 2026; interest under 19 U.S.C. 1505(c); excluded entry types; Form 4811 notify party; limitation planning dates. https://greatlakescustomslaw.com/ieepa-tariff-refunds/

**

Last, Ryan, and Daniel N. Anziska. "Getting Duties Back: Where Recovery Stands Under IEEPA, Section 122 and Section 301 Forced Labor Tariffs." Troutman Pepper Locke, October 12, 2026. Section 122 surcharge of 10 percent from February 24 to July 24, 2026, ruled invalid May 7 with relief limited to three plaintiffs and stayed on appeal; Section 301 forced-labor tariffs of 10 or 12.5 percent on 60 trading partners effective July 24, 2026, with argument held September 30 and no decision; Freestyle World class certified October 8, 2026, covering importers of record that paid IEEPA duties February 1, 2025, through February 19, 2026, excluding those that sued, with a proposed schedule due October 22, no class-wide injunction, tolling unresolved, and the government not contesting reliquidation for prevailing plaintiffs. https://www.troutman.com/insights/getting-duties-back-where-recovery-stands-under-ieepa-section-122-and-section-301-forced-labor-tariffs/

††

Gonsalves, Antone. "CBP Starts Paying Out IEEPA Tariff Refunds for Finally Liquidated Entries." Supply Chain Dive, October 8, 2026. As of October 2, about $136.6 billion accepted into CAPE and $126 billion sent to Treasury; 477 Phase 3 declarations covering 425,517 entries; Phase 3 covers about $11.4 billion, or 6.9 percent; July 30 importer number cutoff; the government's appeal remains before the Federal Circuit. https://www.supplychaindive.com/news/cbp-starts-paying-out-ieepa-tariff-refunds-for-finally-liquidated-entries/832411/

‡‡

Penn Wharton Budget Model. "Effective Tariff Rates and Revenues: Updated October 14, 2026." University of Pennsylvania, October 14, 2026. Effective tariff rate of 7.1 percent in August 2026 versus 2.3 percent in January 2025; $126 billion certified equals about 76 percent of $166 billion collected; steel and aluminum at 39.8 percent, autos at 13.8 percent, China at 24.3 percent. https://budgetmodel.wharton.upenn.edu/p/2026-10-14-effective-tariff-rates-and-revenues-updated-october-14-2026/

§§

Akers, Ashley, and Noah Curtin. "IEEPA Tariff Refund Update: Government Appeals CIT Refund Order and the Road Ahead for Importers." Holland and Knight, June 15, 2026. Nearly 8.5 million entries refunded in CAPE's first six weeks versus 338,000 refund entries in the prior fiscal year; Phase 2 launched June 29 for reconciliation-flagged entries, about 2.8 million entries and $28.7 billion; Justice Department notices of appeal filed June 3, 2026, citing Trump v. CASA. https://www.hklaw.com/en/insights/publications/2026/06/ieepa-tariff-refund-update-government-appeals

‖‖

Cerullo, Megan. "How Consumers Can Get a Refund for Trump Tariffs Struck Down by Supreme Court." CBS News MoneyWatch, August 14, 2026. CBP refunds go only to the importer of record; UPS applied for $500 million and expects $5 billion, refunding customers one to three months after reimbursement; FedEx issuing $800 million with a portal; DHL automatic; Greg Husisian on consumers; class actions against major retailers; Senator Warren's inquiry. https://www.cbsnews.com/news/how-to-get-a-tariff-refund-ieepa/

¶¶

U.S. Census Bureau. "Preliminary Profile of U.S. Importing and Exporting Companies, 2024." U.S. Department of Commerce, December 11, 2025. Of 239,231 identified importing companies in 2024, 232,804 were small and medium-sized firms with fewer than 500 employees, accounting for about 31 percent of known import value. https://www.census.gov/foreign-trade/Press-Release/edb/2024prelimprofile.pdf

***

Last, Ryan, and Daniel N. Anziska. "To Sue or Not to Sue: That Is the Question for IEEPA Tariff Refunds." Troutman Pepper Locke, August 13, 2026. Phase 1 covered about 63 percent of entries owed refunds; roughly 3,700 pending trade court suits; filing deferrable to at least February 4, 2027; individual suits are the most certain path for substantial finally liquidated exposure; protective protests recommended; a certified class may sidestep CASA limits. https://www.troutman.com/insights/to-sue-or-not-to-sue-that-is-the-question-for-ieepa-tariff-refunds/

†††

"CAPE Phase 3 Second Wave: IEEPA Refunds, Late Filers Left Out." ForwarderNews, October 22, 2026. CBP announced October 20 to importers' attorneys that Phase 3 now covers plaintiffs with reliquidation orders who gave importer of record numbers between July 31 and August 13; later filers get access at a later date with no date set. https://www.forwardernews.com/news/2026-10-21-cape-phase-3-second-wave

‡‡‡

BDO USA. "CIT Certifies Importer Class Seeking IEEPA Duty Refunds: Key Considerations for Importers." BDO, October 15, 2026. Rule 23(b)(2) class membership is mandatory and fixed with no opt-in or opt-out; relief would direct liquidation or reliquidation regardless of status and require CAPE filings; resolution expected to extend into early 2027 or later. https://www.bdo.com/insights/tax/cit-certifies-importer-class-seeking-ieepa-duty-refunds-key-considerations-for-importers

§§§

Lieberman PLLC. "The Court of International Trade Certifies an IEEPA Refund Class: What the Freestyle World Ruling Means for Importers With Outstanding Refunds." Lieberman PLLC, October 20, 2026. No public order after the October 13 conference; joint proposed schedule due October 22; Federal Circuit appeals undecided with no argument held; tolling unresolved. https://www.liebermanpllc.com/freestyle-world-ieepa-refund-class-certification/

‖‖‖

"IEEPA Tariff Refunds: The Class Action That Could Reach Small Importers." ForwarderNews, October 14, 2026. Class covers importers that paid IEEPA duties February 1, 2025 to February 19, 2026 and did not sue, membership automatic; proposed schedule due October 22; injunction briefing expected into December 2026 at the earliest; no court payment order expected before the end of 2026 and no class member refund expected before the end of the first quarter of 2027 (authors' forecast); government appeal pending at the Federal Circuit. https://www.forwardernews.com/news/2026-10-13-ieepa-tariff-refund-class-action

¶¶¶

Davis Wright Tremaine LLP. "Trade Court Certifies Non-Litigant Importer Class in IEEPA Duty Refund Litigation." DWT, October 14, 2026. Nearly 4,000 lawsuits and nearly 7,000 importers in Phase 3; government expected to appeal certification; no class-wide relief order expected before the government answers the complaint. https://www.dwt.com/insights/2026/10/cit-certifies-ieepa-duty-refund-importer-class

****

Kenner, Jason, and Will Marshall. "USCIT Upholds IEEPA Suspension of De Minimis Treatment in Axle of Dearborn." Alvarez and Marsal, August 13, 2026. De minimis suspension effective August 29, 2025, continued under a separate executive order, upheld by the trade court August 13, 2026, suspended indefinitely by CBP interim rules June 24, 2026, and repealed by statute effective July 1, 2027. https://www.alvarezandmarsal.com/thought-leadership/uscit-upholds-ieepa-suspension-of-de-minimis-treatment-in-axle-of-dearborn

††††

"Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Alcoholic Beverages." Proclamation 11046, 91 Fed. Reg. 46639, July 23, 2026. Signed July 20, 2026 under Section 338 of the Tariff Act of 1930; 50 percent additional duty on listed Canadian products. https://www.govinfo.gov/content/pkg/FR-2026-07-23/html/2026-14991.htm

‡‡‡‡

Covington and Burling LLP. "Section 338 Tariffs on Canada Take Effect as Canada Announces Retaliatory Response." Covington, August 2026. Duties took effect in August 2026 at 50 percent on listed Canadian goods, with no USMCA origin exemption apart from certain passenger vehicle parts; Canada's counter-tariffs target $27.6 billion of U.S. goods and are scheduled for September 8, 2026. https://www.cov.com/news-and-insights/insights/2026/08/section-338-tariffs-on-canada-take-effect-as-canada-announces-retaliatory-response

§§§§

Polsinelli PC. "First-Ever Section 338 Tariffs: U.S. Imposes 50% Duties on Nearly $20 Billion of Canadian Imports." Polsinelli, July 21, 2026. Three proclamations signed July 20, 2026; USTR estimates the three product lists cover nearly $20 billion in Canadian imports; stated reasons are Canada's treatment of U.S. motor vehicles, alcoholic beverages and dairy. https://www.polsinelli.com/international/publications/first-ever-section-338-tariffs-u-s-imposes-50-duties-on-nearly-20-billion-of-canadian-imports

‖‖‖‖

"US Food Importer Sues Trump Administration Over 50% Tariffs on Canadian Goods." Fox Business, October 21, 2026. Gellert Global Group sued at the Court of International Trade seeking to void the Section 338 duties, block collection and win refunds with interest. https://www.foxbusiness.com/politics/us-food-importer-sues-trump-administration-over-50-tariffs-canadian-goods

¶¶¶¶

"White House Modifies Scope of Products Subject to Section 338 Canada Tariffs." Recreation Vehicle Industry Association, accessed October 29, 2026. Proclamation signed October 23, 2026, effective 12:01 a.m. ET October 30, 2026; 22 tariff codes removed and 100 added; duties apply regardless of USMCA eligibility. https://www.rvia.org/news-insights/white-house-modifies-scope-products-subject-section-338-canada-tariffs

*****

Deloitte. "Accounting Considerations Related to the Supreme Court's Ruling on Tariffs." Deloitte Heads Up, February 27, 2026, updated June 30, 2026. Loss recovery versus gain contingency models; inventory carrying amount adjustments; interest as a gain contingency; cash flow classification; refund liabilities to customers under ASC 606; funder arrangements as financing. https://dart.deloitte.com/USDART/home/publications/deloitte/heads-up/2026/supreme-court-tariff-ruling-accounting-considerations

†††††

RSM US LLP. "Navigating the Tax Impact of IEEPA Tariff Refunds." RSM, July 30, 2026. Accrual-method taxpayers generally include refunds when the right is fixed and determinable; claims subject to government review may not be fixed until approval or payment. https://rsmus.com/insights/services/business-tax/ieepa-tariff-refunds-tax-impact.html

‡‡‡‡‡

U.S. Customs and Border Protection. "Fact Sheet: CAPE Refund Fraud Solicitation." CBP, accessed October 26, 2026. CBP warning to importers about fraudulent solicitations tied to CAPE refunds. https://www.cbp.gov/document/fact-sheets/fact-sheet-cape-refund-fraud-solicitation