CBP Develops System to Refund $166 Billion in Illegal Tariffs

The United States Customs and Border Protection (CBP) is developing the Consolidated Administration and Processing of Entries (CAPE) system to return approximately $166 billion in tariffs to over 330,000 importers. The process follows a February 20, 2026, Supreme Court ruling in Learning Resources, Inc. v. Trump, which declared that tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA) were unconstitutional because the authority to set tariffs rests exclusively with Congress.

Following the ruling, Judge Richard Eaton of the U.S. Court of International Trade ordered the government to immediately refund duties with interest. However, CBP Executive Director Brandon Lord argued that the agency lacked the technological infrastructure to process 53 million entries, estimating the task would require over 4.4 million manual labor hours and divert personnel from national security missions. Judge Eaton subsequently suspended the immediate compliance order to allow CBP 45 days to implement an automated system.

As of mid-March, CBP reported that components of the CAPE system, which integrates with the Automated Commercial Environment (ACE) portal, were between 40% and 80% complete. Importers must file electronic declarations to receive single consolidated payments from the Treasury Department; CBP noted that as of early February, only about 21,000 of the eligible importers had completed the necessary electronic setup. While the U.S. Chamber of Commerce praised the plan, some large companies have continued pursuing individual lawsuits, and others have sold refund rights to investment firms. Simultaneously, the Trump administration has pivoted to implementing new global tariffs under different authorities, including Sections 122 and 301.