CBP's CAPE refund system has processed $35.46 billion across 8.3 million entries, with the first payments now reaching importers — wine importer VOS Selections received $110,000 this week. The Section 122 replacement tariff was declared unlawful by the CIT on May 7 but the Federal Circuit granted an administrative stay on May 12, keeping the 10% duty in place while the appeal proceeds on an expedited schedule. State officials are demanding consumer pass-through protections as consumer class actions multiply. The DOJ's June 6 appeal deadline for the IEEPA refund order approaches without any filing activity.
CBP's second progress report to the Court of International Trade, filed on May 12, confirms that the CAPE refund system has crossed a significant operational threshold: 8,338,081 entries have been liquidated or reliquidated without IEEPA duties, representing an anticipated refund and interest amount of approximately $35.46 billion. Since the portal's April 20 launch, 126,237 CAPE declarations have been submitted, of which 86,874 passed file validations covering 15,123,221 individual entries accepted for the removal of IEEPA duties. The first actual payments are now reaching importers — wine importer VOS Selections, a plaintiff in one of the Democratic-led state actions, reported receiving a $110,000 refund this week. (Spectrum News) Judge Eaton has set May 26 as the next date for CBP to file an updated progress report, while the Department of Justice still has until June 6 to file an appeal of the CIT's March 4 refund order — a deadline that continues to approach without any filing, motion for extension, or public signaling of intent. (Sandler, Travis & Rosenberg)
The Section 122 replacement tariff landscape shifted dramatically over the past week. On May 7, the CIT ruled in a 2-1 decision that the administration's 10% global tariff imposed under Section 122 of the Trade Act of 1974 was unlawful, holding that the statutory prerequisite — a “large and serious United States balance-of-payments deficit” as understood in 1974 — was not satisfied and that the administration improperly relied on persistent trade deficits to justify the measure. However, the CIT limited its permanent injunction to the named plaintiffs: Burlap & Barrel, Basic Fun, and the State of Washington. The DOJ filed a notice of appeal on May 8 and an emergency stay motion on May 11, and the Federal Circuit granted a temporary administrative stay on May 12, keeping Section 122 tariffs in effect for all importers while the appeal proceeds. (Diaz Trade Law) The expedited briefing schedule gives plaintiffs until May 19 to respond and DOJ until May 22 to reply, signaling that the Federal Circuit intends to resolve the stay question quickly. Regardless of the appeal outcome, Section 122 tariffs are set to expire on July 24, 2026 under the statute's 150-day limitation unless Congress passes affirmative legislation to extend them — a prospect that remains uncertain given bipartisan skepticism about executive tariff authority in the wake of the Supreme Court's IEEPA ruling. (Troutman Pepper)
A coalition of eight state comptrollers and treasurers sent a letter to President Trump this week demanding public disclosure of all IEEPA refund applications and protections for consumers who bore the economic burden of the now-invalidated tariffs through higher prices. The letter, released publicly on May 14, argues that a refund process that does not account for pass-through costs risks directing public relief to parties who were not economically harmed. Minnesota State Auditor Julie Blaha suggested that consumer reimbursements could be handled through direct payments based on per-household impact estimates or through business-administered refunds to individual customers. (Spectrum News) This development arrives as plaintiffs' firms continue to file putative nationwide class actions alleging that companies are unjustly enriched by receiving IEEPA tariff refunds while retaining the tariff-related price increases they passed on to consumers, with legal theories spanning contract, restitution, and state consumer protection statutes. (Arnold & Porter) (Troutman Pepper)
On the broader trade policy front, USTR Ambassador Jamieson Greer testified before the House Ways and Means Committee on May 11, citing a 24% reduction in the trade deficit since “Liberation Day” in April 2025. Notably, USTR has launched 76 new Section 301 investigations targeting structural overcapacity in manufacturing sectors and forced labor practices across major trading partners, with public hearings that commenced May 5. Greer indicated that the administration is not receptive to exclusion requests, and findings will lead to proposed responsive actions including potential new targeted tariffs. (Ways and Means Committee) Meanwhile, the Commerce Department released applications for onshoring agreements that would allow domestic producers to reduce Section 232 tariff exposure in exchange for commitments to expand U.S.-based manufacturing capacity. (Diaz Trade Law)
CBP's progress report also flagged an operational gap: 1,880 consolidated refunds have stalled because importers of record failed to register ACH account information on CBP's electronic payment portal. Additionally, importers should not rely solely on CAPE for refund recovery and should continue to monitor liquidation dates and file timely protests under 19 U.S.C. §1514, particularly for entries not yet eligible for CAPE processing or entries where compliance concerns may trigger additional CBP review. The 60-to-90-day processing timeline that CBP has projected remains aspirational, and the DOJ's June 6 appeal deadline introduces residual uncertainty into the entire refund architecture. (Sandler, Travis & Rosenberg)
Companies with IEEPA tariff exposure should take several concrete steps in the coming weeks. Importers who have filed CAPE declarations should verify that ACH account information is current on CBP's electronic refund portal to avoid being among the 1,880 stalled payments identified in the May 12 progress report. All importers should continue to monitor liquidation dates for their affected entries and file timely protests under §1514 — even for entries accepted into CAPE — as the DOJ's June 6 appeal deadline leaves the durability of the CIT's refund order in question. Companies that passed IEEPA tariff costs to customers through pricing adjustments or line-item surcharges should consult counsel regarding exposure to the growing wave of consumer class actions, document their pricing rationale, and consider voluntary disclosure strategies. For Section 122 tariffs, importers should continue paying the 10% duty while the Federal Circuit stay is in effect but should consider filing their own CIT actions to preserve refund rights, since the May 7 ruling was expressly limited to named plaintiffs and entries may liquidate while the appeal proceeds. Companies involved in Section 301-affected supply chains should monitor USTR hearing schedules for the 76 new investigations and prepare comments where their sectors are implicated.
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