IEEPA Tariff Refunds: What the Supreme Court Ruling Means for FBA

If you imported inventory into the US anytime between spring 2025 and February 2026, there is a real chance the government owes you money. Not theoretical money — U.S. Customs and Border Protection has already approved roughly $23 billion in refunds and is processing tens of billions more.

Here is what happened, what you are actually paying at the border right now, and the three deadlines that matter for the rest of July.

Key Takeaways

• On February 20, 2026, the Supreme Court ruled 6–3 in Learning Resources v. Trump that IEEPA does not authorize tariffs. Every IEEPA tariff — the 10% baseline, the reciprocal rates, the fentanyl tariffs on China and Mexico, the 40% Brazil surcharge — died at midnight on February 24.
• CBP is refunding roughly $166 billion in IEEPA duties through the CAPE process in the ACE portal. Phase 1 has been running since April 20, Phase 2 opened June 29, and Phase 3 (older, finally liquidated entries) is targeted for late July — but only for importers who filed suit at the Court of International Trade.
• The refund goes to the importer of record. If you shipped DDP and your forwarder or supplier was the IOR, the refund is theirs to claim, not yours.
• The replacement tariff — a 10% global surcharge under Section 122 of the Trade Act of 1974 — is legally capped at 150 days and expires July 24, 2026.
• Section 301 tariffs on China were not touched by the ruling. Most China-sourced consumer goods still land at roughly 35% (10% Section 122 + 25% Section 301). De minimis is still dead, and CBP moved on June 23 to keep it dead under a different law.

What the Court Actually Decided

The case is Learning Resources, Inc. v. Trump, decided February 20, 2026. Chief Justice Roberts wrote the opinion for a 6–3 majority. The question was whether the International Emergency Economic Powers Act — the 1977 law the administration used for the “Liberation Day” reciprocal tariffs and the fentanyl tariffs — lets a president impose tariffs at all.

The Court said no. IEEPA lets the president “regulate” imports during a declared emergency, but the Constitution gives the power to “lay and collect Taxes, Duties, Imposts and Excises” to Congress, and a delegation that large has to be explicit. “Regulate” is not explicit.

Four days later, every tariff built on IEEPA was terminated. That is not a rate cut. It is a legal finding that roughly $166 billion in duties was collected without authorization — which is why the refund machinery exists.

The Refund: Who Gets Paid and How

CBP built a dedicated process called CAPE (Customs Adjustment and Processing of Entries) inside the ACE portal. It runs in three phases, and the phase you fall into depends on the liquidation status of your entries:

• Phase 1 — live since April 20. Covers unliquidated entries and entries liquidated within the last 80 days. This is most 2025–2026 imports. CBP has accepted claims covering about $90 billion so far and approved roughly $23 billion for payment. Refunds accrue interest.
• Phase 2 — live since June 29. Covers entries flagged for reconciliation, about 2.8 million entries worth an estimated $28.7 billion in refunds.
• Phase 3 — targeted for late July. Covers older, finally liquidated entries. Here is the catch: the government has said Phase 3 refunds go only to importers who filed a lawsuit at the Court of International Trade. If you have significant duties on old entries and never filed, talk to a trade attorney about whether it is still worth preserving your claim.

Valid claims are generally paid within 60–90 days of CBP accepting the CAPE declaration. One honest caveat: in June the government appealed a CIT refund order, so the exact edges of who gets refunded automatically versus who has to fight are still moving. The core process, though, is running and paying out.

The importer-of-record question

This is the detail that decides whether this news is worth four figures to you or nothing.

Refunds go to the importer of record. If you import under your own LLC with your own customs bond — the standard setup for most private label sellers — you or your broker file the CAPE declaration and the money comes to you.

If you shipped DDP (delivered duty paid), your supplier or freight forwarder was almost certainly the IOR. They paid the duty, they get the refund. In practice, you paid that duty inside your DDP quote. Email them this week and ask, in writing, whether they are filing CAPE claims on entries that carried your goods and how they plan to pass the recovery through. Some forwarders are doing this proactively. Most will not volunteer it.

Practical steps if you are the IOR:

1. Pull your Form 7501 entry summaries for every shipment from April 2025 through February 23, 2026.
2. Sum the lines charged under the IEEPA HTS codes (your broker can isolate these in minutes).
3. Have your broker file the CAPE declaration in ACE, or file it yourself if you self-file.
4. Calendar a follow-up 90 days out.

What You Are Paying at the Border Right Now

The administration did not simply accept a tariff-free world. On February 24 — the same day IEEPA tariffs died — a 10% global surcharge took effect under Section 122 of the Trade Act of 1974, a balance-of-payments provision that does not require an emergency declaration.

For a China-sourced product, the current stack looks like this:

• 10% Section 122 surcharge (all origins)
• 25–30% Section 301 (unchanged by the ruling — it is a different statute that survived every court challenge)
• Your normal MFN duty rate for the product category

So most China-sourced consumer goods land around 35% plus MFN — meaningfully better than the 45–55% many sellers paid in 2025, but nowhere near pre-2025 numbers.

Two things sellers keep getting wrong in the forums:

Section 301 did not go anywhere. The Supreme Court ruling was about IEEPA only. The 25% on most consumer-goods lists is intact, and USTR opened a new Section 301 investigation into Chinese industrial overcapacity in March.

De minimis is not coming back. The duty-free threshold for sub-$800 shipments was killed in 2025, and on June 23, 2026 CBP published proposed rules to keep it suspended indefinitely under the Tariff Act of 1930 — an authority the Supreme Court ruling does not touch. Do not build a 2026 strategy around direct-from-China small parcels becoming cheap again.

The July 24 Cliff

Section 122 has a hard statutory limit: 150 days, extendable only by Congress. The 10% surcharge expires July 24, 2026.

Nobody serious expects tariffs to just quietly end that day. The administration has floated raising the surcharge to the 15% statutory maximum, proposed new Section 301 actions covering some 60 trading partners in June, and is expanding Section 232 sectoral tariffs (metals, pharmaceuticals, and more in the pipeline). A trade court panel also struck down Section 122 itself in May — but the ruling only protects the three named plaintiffs while the appeal runs, so everyone else keeps paying.

What that means operationally: the tariff you pay on a container landing August 15 is genuinely unknowable today. It could be 0% + 301 if Section 122 lapses with no replacement. It could be 15% + 301. It could be a new country-specific Section 301 rate.

My take as an operator, not a lawyer: if you have a reorder decision pending, having goods clear customs before July 24 is the only scenario where you know your landed cost with certainty. After that date you are guessing. I would rather carry six extra weeks of inventory at a known cost than gamble a reorder on an unknown rate — run that math against your storage fees before you copy it.

What To Do This Week

1. Find out who your IOR was on every 2025–2026 shipment. Own entity → file CAPE. DDP → email your forwarder about the refund today.
2. Quantify the claim before deciding how much energy it deserves. Duties paid × months of IEEPA rates adds up faster than most sellers think — on $200K of imports at a 20% IEEPA rate, this is a $40K conversation.
3. Re-run landed costs at 35% for China goods, not the 2025 panic rates. If you shelved a product last year because tariffs killed the margin, the math may work again — my true COGS breakdown is the framework I use.
4. Time inbound shipments around July 24 if you can. Known cost before, unknown after.
5. Keep sourcing flexibility. The China tariff playbook for FBA sellers covers negotiation levers with suppliers when rates move — most of it just became relevant again in the other direction.

The Bottom Line

For three years the tariff story has only moved one direction: up. This is the first structural reversal — the Supreme Court did not tweak a rate, it took an entire tariff-making tool away from the White House permanently. Money is flowing back to importers who paid attention, the effective rate on China goods dropped by 10–20 points, and the next regime has a hard deadline of July 24.

The sellers who win these windows are the ones who treat policy news as an operations task: find your IOR, file the claim, re-run the numbers, time the shipments. Two hours of admin this week could recover more than your best product launch netted last quarter.

I cover tariff and policy shifts as they land — subscribe on YouTube so the next deadline does not sneak up on you mid-reorder.