Months after the decision was made, U.S. importers will finally receive their $166 billion settlement as a refund on President Donald Trump’s tariffs after they were ruled unconstitutional. April 21, U.S. Customs and Border Protection (CBP) has released the “first phase” of its electronic tariff refund system, which is being called the Consolidated Administration and Processing of Entries (CAPE). This allows importers to apply for said refunds on the tariffs that have been struck down by the Supreme Court.
The decision was made back in February and said that the tariffs that had been imposed under the International Emergency Economic Powers Act (IEEPA) were illegal. However, the case went no further than that; there was no follow-up on how companies should be refunded, which left the job up to the Court of International Trade and the CPB.
As of now, of over 330,000 U.S. importers, around 60,000 have already applied for their refunds. Claims from those importers total around $127 billion and will be met with refunds within the next 60 to 90 days after they are processed, according to the CBP.
Yet, within the chaos, small businesses have been struck particularly hard. The levies were a heavy blow to smaller businesses, but the process of refunding is also making them hard to bounce back. A Federal Reserve survey published in March found that 42% of small businesses listed rising costs due to rising tariffs as a primary financial concern. On top of that, unlike larger companies, some of which have already sued the Trump administration to ensure their place of eligibility within the refunds, many small businesses do not have nearly as many resources to navigate the legal system. This makes the security of their refunds uncertain and jeopardizes their ability to recoup the hundreds of thousands of dollars they might have lost in the past year. For many of these companies, if they chose to look further into tariff refunds, it would mean diverting resources from other areas of their business.
Additionally, the questionable circumstances hanging a fog over the refund process make it even harder for small businesses to pass through the refund system, alongside their lack of proper resources. Among some of the challenges these companies are facing is the tight time frame for applying to CAPE. Currently, refunds are available for “unliquidated” entries—meaning CBP hasn’t made a final determination on how much is owed—or for entries “liquidated” in the past 80 days, where CBP has determined what is owed. Businesses with those already liquidated entries have to act immediately or risk no longer being able to receive their refund after the 80-day window.
Companies not legible will probably need to file a formal protest to the CBP or sue the Court of International Trade for refunds. Although currently it has not been made clear if those will be the exact processes. With the convoluted and not fully released system for those who fail to meet the timeframe and the current application website constantly glitching and lagging, the delays that may arise could lead to ineligibility and, for most small businesses without proper counsel, a permanent loss of refund rights.
