CBP Reports Delay in Tariff Refunds

U.S. Customs and Border Protection (CBP) informed a Court of International Trade judge on Friday, May 10, 2023, that it is currently unable to comply with an order to refund reciprocal tariffs. These tariffs, imposed by former President Donald Trump, were recently ruled illegal by the Supreme Court.

CBP's delay in refunding reciprocal tariffs, recently deemed illegal by the Supreme Court, is attributed to limitations in the agency's existing technology, processes, and manpower.

Challenges to Compliance

CBP cited its existing technology, processes, and manpower requirements as reasons for its inability to immediately comply with the refund order. The agency indicated it could begin issuing refunds by late April after significant technological upgrades.

Financial Scope and System Overhaul

CBP reported that the total amount of International Emergency Economic Powers Act (IEEPA) tariffs collected and estimated duty deposits reached approximately $166 billion as of Wednesday. The agency expressed confidence in developing and implementing new functionality within its Automated Commercial Environment (ACE) system, which tracks imported merchandise. This upgrade aims to streamline and consolidate refunds and interest payments on an importer basis, thereby avoiding more than 54 million separate refunds.

Timeline and Efficiency Improvements

CBP stated it is making all possible efforts to have the new ACE functionality ready for use within 45 days. This new process is expected to require minimal submission from importers and is estimated to save CBP over 4 million hours of employee work. Brandon Lord, executive director of the trade programs directorate at CBP's Office of Trade, indicated that over 330,000 importers had made more than 53 million entries related to these IEEPA duties.