CIT Rules IEEPA Tariffs May Be Recovered Through Legal Action

Recent developments in the ongoing IEEPA tariff litigation have brought important clarity for U.S. importers seeking refunds of unlawfully imposed duties. While uncertainty continues to surround administrative refund mechanisms, the Court of International Trade (“CIT”) has now confirmed that importers who pursue legal action can still obtain refunds, even if their entries liquidate while the litigation is pending.

What Changed?

Yesterday afternoon in a consolidated IEEPA tariff case, the CIT denied a request to preliminarily enjoin U.S. Customs and Border Protection (“CBP”) from liquidating entries subject to challenged IEEPA duties. At first glance, that result might appear unfavorable to importers. But the court’s reasoning tells a much more important story.

The denial was not based on a lack of judicial power. On the contrary, it rested squarely on the federal government’s unequivocal representation that it will not oppose the court’s authority to order reliquidation and to issue full refunds with interest if the IEEPA tariffs are ultimately held unlawful. In other words, liquidation no longer forecloses relief for importers who are properly before the court. Specifically, the CIT said:

As long as this court has jurisdiction under 28 U.S.C. § 1581(i), the court can provide remedial relief, as the Government here acknowledges. In short, where such jurisdiction has attached, this court has authority to order reliquidation, and the Plaintiffs cannot claim that they would be denied a refund of tariffs paid in the event that the challenged Executive Orders are ultimately deemed unlawful by the Supreme Court.

Why This Matters

For months, importers have faced a troubling legal question: If CBP liquidates an entry before the Supreme Court rules on the legality of the IEEPA tariffs, are refunds lost forever? The government has previously argued in other contexts that liquidation cuts off judicial remedies, and the CIT itself has acknowledged that liquidation can sometimes result in “irreparable economic harm.”

This new order materially changes that risk calculus. The government has now repeatedly and formally committed, both before the CIT in related cases and before the Federal Circuit, that courts retain the authority to order reliquidation and refunds of IEEPA duties after liquidation, so long as the importer has brought a proper legal challenge.

As a result, the court concluded that emergency relief was unnecessary precisely because judicial refunds remain available through litigation.

Administrative Remedies Remain Uncertain

Importantly, this clarification does not guarantee that refunds will be available through protests or future CBP refund programs. Unlike prior situations, such as the Harbor Maintenance Fee litigation, there is no assurance that CBP will establish a special administrative refund process for IEEPA duties.

Ordinarily, challenges to customs duties must proceed through the administrative process: an importer must protest liquidation with U.S. Customs and Border Protection and if that protest is denied, seek judicial review. In this case, the CIT ruled that because the challenge is constitutional and legal in nature, filing a protest is considered “an utter futility” because CBP has no authority to decide whether a statute or executive order is lawful; it can only collect the duty.

The court’s ruling highlights a clear divide:

• Administrative remedies: uncertain, discretionary, and potentially unavailable.
• Judicial remedies: expressly preserved, enforceable, and acknowledged by the government.

The Strategic Takeaway for Importers

The message from the court is clear: importers who want certainty should preserve their rights through litigation. While the Supreme Court continues to consider the legality of the IEEPA tariffs, importers who file suit ensure that liquidation will not stand in the way of recovery if the tariffs are struck down.

This development reinforces the strategic value of so-called “protective” actions—lawsuits filed not to accelerate a refund today, but to ensure that refunds remain legally available tomorrow.

What Importers Should Do Now

Any company that has paid IEEPA-based tariffs, including fentanyl-related or reciprocal tariffs, should assess:

• Whether entries have liquidated or will liquidate soon;
• The magnitude of duties paid;
• Whether a judicial challenge is necessary to preserve refund rights.

Even where liquidation has already occurred, the court’s ruling confirms that litigation can still unlock refunds if the tariffs are ultimately deemed unlawful.

How We Can Help

Our International Trade team is actively advising importers on litigation strategies in light of this clarification from the CIT. We are closely tracking the Supreme Court proceedings and helping clients determine whether filing suit is the most effective way to protect their refund rights.

If your company has paid IEEPA tariffs and wants certainty about recovery, now is the time to act. Please contact us to discuss whether litigation is the right next step for your business.

Disclaimer:

This blog post is provided for general informational purposes only and does not constitute legal advice. The legal issues discussed involve evolving case law and fact-specific considerations that may differ materially depending on an importer’s circumstances, entry history, and procedural posture. Reading this post does not create an attorney–client relationship. Importers should consult qualified counsel to obtain advice tailored to their specific situation before taking or refraining from any action.