WASHINGTON — U.S. Customs and Border Protection (CBP) is developing a new system to process refunds for tariffs ruled illegal by the Supreme Court, and a federal judge has granted the agency 45 days to implement it.
Tariff Refund System Development
CBP’s executive director of trade programmes, Brandon Lord, stated in a filing that the new system will be more efficient than current processes. The agency is currently unable to immediately begin refunding tariffs imposed by President Donald Trump due to the “unprecedented volume” of cases.
According to Lord, existing administrative procedures and technology are not suited for a task of this scale and would divert personnel from trade enforcement duties. Judge Richard Eaton suspended his earlier directive for immediate refunds to allow CBP time to establish the new system.
Eaton previously ordered CBP to halt the calculation of illegal tariffs on imports where payments were not fully finalized. Trade lawyers have indicated this ruling could apply to nearly all imports subject to the now-illegal duties.
Lord noted that over 330,000 importers made more than 53 million entries where they deposited or paid duties that have since been struck down. These tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), totaled approximately $166 billion in duties and estimated deposits as of Wednesday.
Approximately 20.1 million of those entries were still pending finalization as of Wednesday. CBP’s systems cannot currently prevent the finalization of payments including the IEEPA tariffs without creating further complications, Lord said.
The coalition We Pay the Tariffs, representing U.S. small businesses, initially welcomed the directive for tariff refunds. The group stated that a “full, fast, and automatic refund process” is what businesses are owed.
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