Payback: An unexpected upside to Trump’s IEEPA tariffs

In summary

• With the US Supreme Court holding that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were illegal, businesses can now claim refunds for duties paid
• US Customs has set up a portal, the Consolidated Administration and Processing of Entries (CAPE), through which to request
• Over £20 billion has already been repaid with many companies receiving refunds within 60 days
• For many British businesses, it's an opportunity to secure large cash refunds with little cost or effort, and S&W are on hand to support

US exporters have had little to cheer about since President Trump took office for his second term. Even before “Liberation Day”, it was clear the tariffs were high on the administration’s agenda.

The tariffs, when they did come, introduced not just a new cost but new complexity for exporters. The US-UK trade deal announced the next month, meanwhile, offered limited comfort. And, as the dispute over Greenland made clear, tariffs – or at the least the threat of them – remain a favoured foreign policy tool for the President.

But this February finally brought some good news: The Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA), which the President used as the basis for his tariffs, did not give him that power. The decision rendered most US tariffs introduced in 2025, including the 10% reciprocal tariff on nearly all imports, illegal. 

At the time, the court’s decision may have seemed to change very little for British businesses. Following the ruling, the President almost immediately announced new 10% tariffs (raised to 15% the following day) under Section 122 of the Trade Act of 1974.

However, under the 1974 act, tariffs are capped at 15% and time-limited to 150 days, so Trump will need to secure Congressional approval by 20 July to keep them in place. Moreover, in early May, the US Court of International Trade determined that these tariffs, too, are illegal, although the US Court of Appeals last week decided that the government could continue to collect them while it appeals the case.

Given Trump’s determination to impose tariffs, it’s unlikely we’re near the end of this story regardless of the result. But businesses can take one win: Tariffs under IEEPA were not warranted, and those that paid them in 2025 are entitled to a refund. 

By the end of May, the US government had already refunded over $20 billion of tariffs payments. The final bill may be up to $182 billion. This is a tremendous cash collection opportunity for UK exporters to the US.

Unlike almost everything else around this issue to date, the reclaim process is surprisingly simple.

US Customs has set up a portal, the Consolidated Administration and Processing of Entries (CAPE) that enables US importers of record (both US companies and non-US companies) to request the IEEPA refunds. More than 26,000 have already registered on CAPE, and a wide range of UK businesses may qualify:

• Clients selling physical goods to businesses or consumers in the US under delivered duty paid (DDP) Incoterms rules – ie acting as US Importer of Record (IoR).
• Companies selling physical goods to their US subsidiaries or branches under DDP Incoterms
• Companies moving their own physical goods to the US for processing or warehousing, whether finished products, components or raw materials

Many companies that have claimed already have received refunds within 60 days: a surprisingly quick turnaround suggesting that, despite fears, US Customs is neither dragging its feet nor overwhelmed by the number of applications. For clients who don’t have a US bank account, US Customs will make payment to the client’s US customs broker for them to pass the refund on to our client. Those whose goods are dispatched from the EU or the rest of world rather than from the UK are also entitled to refunds.

For many companies, the CAPE offers an opportunity to secure large cash refunds – since some are owed millions – at the cost of very little time or effort. Crucially, however, the simple refund process applies only for those claims submitted within 314 days of the date of import. After that, the reclaim process will be much more challenging.

Our experts are helping clients make the most of this rare opportunity: helping explain to US customs brokers what entry reports they need for the reclaim; disseminating the reports based on whether entries were subject to IEEPA tariffs and what their liquidation status is; preparing a .CSV file for submission in CAPE; and, if necessary, preparing and filing a protest to cover liquidated entries that are not yet finally liquidated (and so not submitted via CAPE).

Approval code: NTEH7062625