U.S. Tariff Refunds Stalled: Thousands of Companies Face Delays

The battle for tariff refunds by thousands of U.S. companies may only just be beginning, with the refund process expected to be neither quick nor straightforward.

The U.S. Customs and Border Protection (CBP) previously estimated that manually processing all refund claims would take 4,431,161 hours — the equivalent of 506 years.

As of March 12, CBP officials told the U.S. Court of International Trade that the Trump administration's tariff refund system is now over 40% complete, with further performance testing scheduled in the coming weeks.

Judge Richard Eaton, overseeing the case, responded swiftly, noting 'satisfactory progress' and ordering the government to submit its next progress report within a week.

Despite this, the outlook remains challenging. The lengthy process may prevent many U.S. businesses from recovering government-held funds, while taxpayers could face an additional $10 billion in interest costs. Analysts highlight three key hurdles: system development, refund initiation timing, and potential legal disputes.

Refund System Challenges: Can CBP Deliver?

According to CBP's latest update, the new Automated Commercial Environment (ACE) software will consist of four components. Brandon Lord, Executive Director of CBP's Trade Policy and Programs, reported that each component is 40% to 80% complete, with steady progress and additional performance testing planned.

Once operational, the system is expected to process the majority of refund claims during its first development phase.

Facing lawsuits from over 2,000 companies — a number still rising — Judge Eaton emphasized the need for a streamlined refund process. Initially, he demanded immediate action from the government. However, after hearing CBP's practical challenges during a March 6 hearing, he allowed some buffer time while urging rapid progress.

Without system improvements, CBP warned, refund processing could take over 4.4 million man-hours. Furthermore, both uncleared and already cleared import entries cannot be refunded quickly due to manpower and system constraints.

Analysts note that the Court's ruling requires CBP to remove IEEPA tariffs from uncleared entries and re-clear previously cleared entries. As of March 4, 2026, over 53 million IEEPA-related entries had been filed, with $166 billion in duties collected. Approximately 20.1 million entries remain uncleared, and over 15 million cleared entries have passed the 90-day re-clearance window or are about to reach it, creating enormous pressure on CBP.

To address this, CBP plans to enhance ACE to consolidate refunds by importer, streamline system validation, customs review, automated clearance, and electronic Treasury disbursement. The new functionality, expected within 45 days, could save over 4 million man-hours and reduce errors.

Refund Timing: Will 45 Days Be Enough?

Companies are pressing for the rapid return of the $166 billion in tariffs invalidated by last month's Supreme Court ruling. The Trump administration, however, warns that returning funds to roughly 330,000 importers will take time.

CBP is confident its upgraded system can optimize the refund and interest payment process, potentially ready in 45 days — suggesting refunds could start by late April.

Experts caution that this timeline is uncertain. CBP may request delays citing technical issues, and even when the system is operational, disbursement could take months due to interest calculations, verification, and electronic refund account setup.

Many refunds are tied to customs procedures. Typically, CBP 'liquidates' imports around 314 days post-entry, with importers having a 180-day window to contest cleared entries. Uncleared entries may be processed faster, but fully cleared entries could face significant delays.

The Cato Institute notes that the Trump administration previously promised quick, easy refunds for verified cleared entries. The new system, however, deviates from that pledge, introducing delays and complexity. CBP's cited challenges, experts argue, were foreseeable and could have been addressed months ago, especially given repeated court losses in IEEPA tariff cases. Every month of delay costs approximately $700 million in interest.

Judge Eaton has stressed that tariffs must be refunded with interest immediately. Each month of delay increases the government's total payout by roughly $650 million, a cost borne by U.S. taxpayers.

Potential Appeals Could Extend Delays

Reports indicate the U.S. government may appeal the Court of International Trade's ruling by May 4, potentially causing further delays and uncertainty, raising costs for importers and taxpayers alike.

Analysts say whether additional legal action will be pursued remains to be seen. If refunds are not executed smoothly after 45 days, CBP may attempt to defer or refuse, and the court could intervene to enforce the order. The Cato Institute warns that any administrative obstacles would disproportionately harm small businesses, inadvertently favor large competitors, and ultimately cost taxpayers.

The longer the government delays IEEPA tariff refunds, the greater the financial strain on U.S. companies, many of which rely on working capital trapped in customs deposits or high-interest debt, forcing costly external financing to maintain operations.