Tariffs Update: What Has Changed Since March 2026
Back in March, when we wrote the last updates, the Supreme Court had just struck down IEEPA-based tariffs in Learning Resources, Inc. v. Trump (Feb. 20, 2026), the Administration had immediately replaced them with a flat 10% surcharge under Section 122 of the Trade Act of 1974, and the Court of International Trade (CIT) had ordered CBP to start issuing refunds — but CBP said it couldn't comply yet because the scale of the task was too large for its existing systems. Since then, all these three issues have moved significantly.
1. Section 122 Tariffs: Struck Down, But Duties Still Being Collected
On May 7, 2026, the CIT ruled 2-1 in State of Oregon v. United States and Burlap and Barrel, Inc. v. United States (Slip Op. 26-47)[1] that the Section 122 tariffs also exceed the President's statutory authority. The court found that the Administration had not satisfied the statutory preconditions for invoking Section 122. However, the ruling did not result in a universal injunction but applies only to the named plaintiffs. The majority of plaintiff states were dismissed for lack of standing entirely, not merely excluded from the injunction. Only the direct importer plaintiffs (Burlap and Barrel, Basic Fun) and the State of Washington (as an importer) had Article III standing. The other 20+ states were thrown out of the case). This outcome left the duties in place for all other importers while the appeal is pending.
The government appealed on May 8. On May 12, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued an administrative stay, suspending the CIT’s injunction while the appellate court considered a more durable stay pending appeal. [2] The CIT separately denied the government’s own motion for a stay pending appeal on May 20, finding the government had failed to demonstrate irreparable harm or likelihood of success on the merits. The CAFC’s administrative stay nonetheless remained in place.
The current expiration date for the Section 122 tariffs is July 24, 2026, unless Congress extends them. The Administration cannot unilaterally extend Section 122: as a result, whatever the CAFC ultimately decides about the merits of the CIT’s ruling, the tariff may cease to be collected before that decision is issued. [3]
2. IEEPA Refunds: The CAPE System
For IEEPA refunds, CBP created the CAPE system to handle all the refund claims, a system to process refunds of approximately $166 billion in IEEPA duties collected from roughly 330,000 importers across more than 53 million entries. [4] CAPE operates through the ACE Portal: importers or their licensed customs brokers upload a CSV file listing entry numbers, and once accepted, ACE recalculates duties without the IEEPA tariff codes and consolidates the refund in a single ACH payment. CBP has stated that valid refunds are generally issued within 60 to 90 days of acceptance. [5] CAPE system is implemented in three phases (for now).
Phase 1, launched April 20, 2026, covers unliquidated entries and entries within 80 days of liquidation. [6] CBP's own guidance describes Phase 1 as covering entries that are "unliquidated or entries within the 90-day voluntary reliquidation period" (with a 10-day buffer, yielding the 80-day practical window). [7] By late April, roughly 75,300 CAPE declarations had been filed, of which 47,315 passed file validations, covering more than 11 million entries. [8] By late May, approximately $85 billion in potential refunds had been accepted into the system, with $20.6 billion already transmitted to Treasury for disbursement. [9] By June 9, CBP reported that it had accepted nearly 17 million entries into CAPE, representing approximately $95 billion in IEEPA duties, with $23 billion already transmitted to Treasury and an additional $40 billion expected to be transmitted by the end of June. [10] Phase 1 is estimated to reach approximately 63% of IEEPA-affected entries. [11]
Phase 2, which is scheduled to launch on June 29, 2026, will cover entries flagged for reconciliation (entry Types 01, 02, and 06) for which a corresponding reconciliation entry (Type 09) has not yet been filed. [12] Phase 2 is further limited to entries that are either unliquidated or liquidated within 80 days of the Phase 2 filing date; entries liquidated outside that window fall outside Phase 2's scope entirely – meaning that many early 2025 reconciliation entries (roughly those filed before May 31, 2025, on a standard 314-day liquidation cycle) will not be captured by Phase 2. [13] CBP has said that Phase 2 alone accounts for approximately $28.7 billion in IEEPA duties (bringing combined Phase 1 and Phase 2 coverage to roughly $130 billion of the $166 billion total). When combined with Phase 1, the two phases together are expected to cover roughly 78% of all IEEPA duties paid. [14]
Phase 3 will address finally liquidated entries. CBP has described that category as approximately 6.9% of the total, or about $11.4 billion, representing 27 million entries. When all three phases are combined, CBP expects the program to reach approximately 90% of all IEEPA duties paid, or about 51.3 million out of 53 million entries. [15] Phase 3 is scheduled for late July 2026, though no precise date has been set.
A critical caveat emerged at the June 9, 2026, hearing before the CIT, where Susan Thomas, Executive Assistant Commissioner for U.S. Customs and Border Protection, stated that Phase 3 refunds will be processed only for importers who have filed lawsuits at the CIT. Approximately 4,000 plaintiff importers who have filed refund actions are expected, if CBP proceeds as planned, to have all of their IEEPA tariffs refunded through the combined three phases regardless of liquidation status. Importers who have not filed a protective action at the CIT risk facing delays or permanent loss of refunds for finally liquidated entries. [16]
Even after all three phases, several categories remain outside CAPE’s scope: reconciliation entries where reconciliation has already been filed, entries covered by drawback claims, entries currently under protest, and entries not filed in ACE (primarily consolidated informal entries). [17]
On June 2, 2026, the DOJ filed a Notice of Appeal to the U.S. Court of Appeals for the Federal Circuit challenging the CIT's refund order.[18] The government is expected to argue that the CIT’s refund orders constitute impermissible universal injunctions extending relief to importers who never filed protective actions at the CIT.[19] A successful appeal could significantly slow or restructure the refund process.
3. What comes After July 24: Section 301
Section 122 expires on July 24, 2026. The Administration's plan to fill that gap is already in motion. Beginning in March 2026, USTR initiated two waves of Section 301 investigations targeting most major U.S. trading partners, one focused on forced labor enforcement (60 economies), the other on structural excess manufacturing capacity (16 economies, including China, the EU, Japan, and Vietnam). [20] USTR has already made findings in the forced labor investigation and proposed responsive actions, with written comments due July 6, 2026, and hearings scheduled for July 7. [21]
Conclusion
The next critical date is July 24. Between now and then, Phase 2 of CAPE launches on June 29, and the CAFC's stay of the Section 122 injunction remains in force.
Disclaimer: This publication is provided for general informational purposes only and does not constitute legal advice. Reading or relying on this material does not create an attorney–client relationship.
[1]State of Oregon, et al. v. United States and Burlap and Barrel, Inc. et al. v. United States, Slip Op. 26-47 (Ct. Int'l Trade May 7, 2026).
[2]State of Oregon v. Trump, Nos. 2026-1804, 2026-1805, slip op. at 2–3 (Fed. Cir. May 12, 2026).
[3] Presidential Proclamation 11,012 (Feb. 20, 2026), https://www.whitehouse.gov/presidential-actions/2026/02/imposing-a-temporary-import-surcharge-to-address-fundamental-international-payments-problems/.
[4] Cherry Bekaert, IEEPA Tariff Refund Update: Phase I CAPE Set for April 20, 2026 (Apr. 15, 2026), https://www.cbh.com/insights/alerts/ieepa-tariff-refund-update-phase-i-cape-set-for-april-20-2026/.
[5] U.S. Customs & Border Protection, International Emergency Economic Powers Act (IEEPA) Duty Refunds, CBP.gov (last updated June 2026), https://www.cbp.gov/trade/programs-administration/trade-remedies/ieepa-duty-refunds.
[6]Id.
[7] See https://www.cbp.gov/trade/programs-administration/trade-remedies/ieepa-duty-refunds.
[8] Declaration of Brandon Lord, Euro-Notions Fla., Inc. v. United States, No. 25-00595 (Ct. Int'l Trade Apr. 28, 2026).
[9] Declaration of Brandon Lord, Euro-Notions Fla., Inc. v. United States, No. 25-00595 (Ct. Int'l Trade May 26, 2026).
[10] Transcript V.O.S. Selections, Inc. et al, v. United States, No. 25-00066 (Ct. Int'l Trade June 9, 2026).
[11]CAPE Has Arrived: A Guide to Navigating the Next Phase of IEEPA Duty Refunds, Holland & Knight (Apr. 22, 2026), https://www.hklaw.com/en/insights/publications/2026/04/cape-has-arrived-navigating-the-next-phase-of-ieepa-duty-refunds.
[12] CBP, IEEPA Duty Refunds (FAQ), under Reconciliation (Updated 5/26/2026), https://www.cbp.gov/trade/programs-administration/trade-remedies/ieepa-duty-refunds
[13] Holland & Knight, IEEPA Tariff Refund Update: Government Appeals CIT Refund Order and the Road Ahead for Importers (June 2026), https://www.hklaw.com/en/insights/publications/2026/06/ieepa-tariff-refund-update-government-appeals.
[14] Transcript V.O.S. Selections, Inc. et al, v. United States, No. 25-00066 (Ct. Int'l Trade June 9, 2026); Liberty Justice Center, New Refund Data Shows Continued Progress on IEEPA Refunds (June 10, 2026), https://libertyjusticecenter.org/home/.
[15] Transcript V.O.S. Selections, Inc. et al, v. United States, No. 25-00066 (Ct. Int'l Trade June 9, 2026); Liberty Justice Center, New Refund Data Shows Continued Progress on IEEPA Refunds (June 10, 2026), https://libertyjusticecenter.org/home/.
[16] Transcript V.O.S. Selections, Inc. et al, v. United States, No. 25-00066 (Ct. Int'l Trade June 9, 2026).
[17] Transcript V.O.S. Selections, Inc. et al, v. United States, No. 25-00066 (Ct. Int'l Trade June 9, 2026); Liberty Justice Center, New Refund Data Shows Continued Progress on IEEPA Refunds (June 10, 2026), https://libertyjusticecenter.org/home/.
[18] DOJ Notice of Appeal, V.O.S. Selections, Inc. et al. v. United States, No. 25-00066 (Ct. Int'l Trade June 2, 2026).
[19] Morgan Lewis, Tariff Refund Battle Continues: Government Appeals Order, morganlewis.com (June 2026), https://www.morganlewis.com/pubs/2026/06/tariff-refund-battle-continues-government-appeals-order.
[20] David K. Young & John Gardner, Tariff Refunds and Tariff Investigations, Conf. Bd. (Apr. 2, 2026), https://www.conference-board.org/research/ced-policy-backgrounders/tariff-refunds-and-tariff-investigations.
[21] Office of the United States Trade Representative, USTR Makes Findings and Proposes Action in 60 Section 301 Investigations Relating to Failures to Take Action on Trade in Forced Labor Goods