Where Things Stand on Refunds and New Section 122 Tariffs
The tariff landscape continues to shift following the Supreme Court decision, and significant uncertainty remains around refunds and next steps.
Below is a clear summary from Roll & Harris LLP of what importers should know now, including expected timelines, open legal questions, and details on the newly announced Section 122 tariffs.
IEEPA Tariffs Ending / IEEPA Refund Process Remains Unclear / New Tariffs Start on February 24th
Following the Supreme Court of the United States (SCOTUS) decision on Friday striking down the IEEPA tariffs, U.S. Customs & Border Protection (CBP) announced this evening that consumption entries will no longer be subject to the IEEPA tariffs (e.g., reciprocal tariffs, fentanyl tariffs, Russian oil sanction tariffs, the Brazilian IEEPA tariffs, etc.) starting at 12:00 am EST, February 24, 2026.
However, as of this writing, CBP has still not said anything about refunds of these illegally charged tariffs. Nor has the Department of Justice (DOJ) said anything since Friday about refunds. To be sure, top administration officials, including Trump himself, have stated that refunds will involve the courts and will take years (see here (at minute 25:30) and here), despite the DOJ previously having told the courts that plaintiffs who have paid the tariffs will receive refunds. In sum, much around the refund process remains unclear.
What is clear, however, is that the courts, specifically the Court of International Trade (CIT), will play a role and will eventually order refunds to those who have already filed suit. Of course, refunds will still take time as the government will be afforded an opportunity to respond to each importer’s claims, importers will have to file papers requesting judgment in their favor, judgments will have to be entered in favor of importers, and then CBP will have to implement any judgments/orders from the CIT. We anticipate the CIT will want to adopt a streamlined procedure since almost 2,000 importers have already filed suit as of this writing. Even with streamlined procedures, it very well could be late 2026 or beyond before importers actually receive any refund money and the timeline could be even longer if the government appeals/fights over different issues that likely may still arise, including whether interest is owed.
Apart from the lack of clarity around timing, other issues that remain opaque at this juncture are whether the CIT will order full refunds (liquidated and unliquidated entries) or partial refunds (unliquidated entries), whether the government will only issue refunds to those who file suit in the CIT (which is significant given that not every one of the approximately 600,000 U.S. importers will sue – only about 2,000 have sued thus far), whether CBP will adopt an administrative refund process (protests, PSCs, etc) for those who do not file sue (or as an alternative so suing) and what such an administrative process might look like, etc. Given all of this uncertainty, importers are best advised to speak with counsel in order to obtain advice appropriate to their situation.
Turning to new tariffs, President Trump announced, via Presidential Proclamation, new “Section 122” tariffs hours after Friday’s Supreme Court decision and indicated that the new tariffs would take effect as of 12:01 am EST on February 24th (so 1 minute after the IEEPA tariffs end). The new “Section 122” tariffs were set in the Proclamation at 10%, although Trump later announced via social media that the 10% rate would be increased to 15%. As of this writing, the social media post has not been implemented via legal text (e.g., new Proclamation, Federal Register notice, etc). We expect the White House will issue an updated Proclamation re the change to 15%, that the International Trade Commission (ITC) will update the Harmonized Tariff Schedule of the United States (HTSUS) and that CBP will issue implementing instructions.
The new Section 122 tariffs will be in effect for 150 days. Unlike the IEEPA tariffs, Section 122 specifically grants the President authority to impose tariffs of up to 15% for a maximum period of 150 days. The tariffs can extend beyond 150 days but require Congress to approve them. Whether or not Congress will approve them in what will be the middle of the mid-term election season remains to be seen. We anticipate legal challenges to these new tariffs since Section 122 authorizes the tariffs to address balance of payment issues and many question whether the predicate for the tariffs exists.
During the next 150 days, the Trump Administration also will move to implement new Section 301 and Section 232 tariffs, and possibly other tariffs. Tariffs under these provisions have procedural requirements that the administration must first fulfill so Trump likely used Section 122 to allow him to quickly “substitute in” new tariffs for the now moribund IEEPA tariffs.
Whatever the reason, the new 10% (15% when/if White House updates the Proclamation) Section 122 tariffs apply to all imports into the United States except for goods listed in Paragraph 2 to Annex I to the Presidential Proclamation and except for goods listed in Annex II to the Presidential Proclamation. Goods that are exempt include:
- certain critical minerals;
- metals used in currency and bullion;
- energy and energy products;
- natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States or grown, mined, or otherwise produced in sufficient quantities to meet domestic demand;
- certain agricultural products, including beef, tomatoes, and oranges;
- pharmaceuticals and pharmaceutical ingredients;
- certain electronics;
- passenger vehicles, certain light trucks, certain medium- and heavy-duty vehicles, buses, and certain parts of passenger vehicles, light trucks, medium- and heavy-duty vehicles, and buses;
- certain aerospace products;
- information materials, donations, and accompanied baggage;
- all articles and parts of articles currently or that later become subject to additional import restrictions imposed pursuant to section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) (section 232);
- articles that are entered free of duty as a good of Canada or Mexico under the terms of general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS), including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the HTSUS, as related to the Agreement between the United States of America, United Mexican States, and Canada; and
- textile and apparel articles that are entered free of duty as a good of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua under the Dominican Republic-Central America Free Trade Agreement.
Goods that (i) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States, before 12:01 a.m. eastern standard time on February 24, 2026; and (ii) are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. eastern standard time, February 28, 2026 are also exempt.
As with the IEEPA tariffs, the Section 122 tariffs are IN ADDITION to any other tariffs that apply (e.g., regular duties, antidumping/countervailing duties, Section 301 duties, etc.). Note that for goods subject to Section 232 tariffs, the Section 122 tariffs are not in addition to the Section 232 tariffs except to the extent the Section 232 tariffs only applied to part of the value of an imported article. Use of foreign trade zones (FTZs) requires goods subject to the Section 122 tariffs to be entered in “privileged foreign status” (unless eligibile for admission in “domestic status”).