{"id":905463,"date":"2026-03-17T15:21:28","date_gmt":"2026-03-17T21:21:28","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=905463"},"modified":"2026-03-17T15:21:33","modified_gmt":"2026-03-17T21:21:33","slug":"ieepa-tariffs-unlawful-what-government-contractors-need-to-know","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/ieepa-tariffs-unlawful-what-government-contractors-need-to-know\/","title":{"rendered":"Recovering Unlawful IEEPA Tariffs: What Government Contractors Need to Know"},"content":{"rendered":"\n

Aron C. Beezley, Nathaniel J. Greeson and Winni Zhang | BuildSmart<\/a><\/p>\n\n\n\n

On February 20, 2026, the U.S. Supreme Court issued a landmark decision in\u00a0Learning Resources, Inc. v. Trump<\/em><\/a>, holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. The ruling invalidated a broad set of tariffs imposed by executive order under IEEPA and reaffirmed that the constitutional power to impose duties belongs to Congress under Article I.<\/p>\n\n\n\n

In the weeks since the decision, attention has shifted from the legality of the tariffs to how Customs and Border Protection (CBP) intends to issue refunds or reliquidations of tariffs. A recent decision from the U.S. Court of International Trade (CIT) in\u00a0Atmus Filtration, Inc. v. United States<\/em><\/a>\u00a0<\/em>represents an important development for importers seeking to obtain refunds.<\/p>\n\n\n\n

This post outlines (1) the Supreme Court\u2019s holding, (2) the CIT\u2019s implementation order in Atmus Filtration<\/em>, and (3) practical steps government contractors should consider to recover duties paid under the invalidated tariff programs.<\/p>\n\n\n\n

BACKGROUND<\/strong><\/h4>\n\n\n\n
The Supreme Court\u2019s IEEPA Tariff Decision<\/strong><\/h5>\n\n\n\n

In Learning Resources<\/em>, the Supreme Court held that the statutory authority in IEEPA allowing the president to \u201cregulate \u2026 importation\u201d does not include the power to impose tariffs. The Court emphasized that tariffs are a core component of Congress\u2019s taxing authority, and that any delegation of such power would require clear statutory authorization.<\/p>\n\n\n\n

The decision affirmed earlier rulings by the CIT and the United States Court of Appeals for the Federal Circuit that had concluded the tariffs were unlawful because they were effectively unlimited in scope and duration.<\/p>\n\n\n\n

As a result, tariffs imposed pursuant to IEEPA \u2014 including the widely applied \u201creciprocal\u201d and country-specific measures \u2014 were invalidated and ceased to be collected shortly after the ruling.<\/p>\n\n\n\n

It is important to note, however, that the Supreme Court\u2019s decision only affects IEEPA tariffs, and not Section 232 tariffs on steel, aluminum, automobiles, copper, and lumber. As such, government contractors should carefully distinguish between costs associated with IEEPA tariffs and non-IEEPA tariffs when assessing potential refund eligibility.<\/p>\n\n\n\n

The CIT\u2019s Implementation Order in Atmus Filtration<\/em><\/strong><\/h5>\n\n\n\n

The first significant development on refunds came on March 4, 2026, when the CIT issued an order in Atmus Filtration, Inc. v. United States<\/em>.<\/p>\n\n\n\n

In that case, Judge Richard K. Eaton directed CBP to begin removing IEEPA tariffs from affected customs entries. The order requires CBP to (1) liquidate all unliquidated entries without the unlawful IEEPA duties, and (2) reliquidate entries that have been liquidated but are not yet final without those duties.<\/p>\n\n\n\n

Importantly, the court stated that all importers of record whose entries were subject to IEEPA duties are entitled to benefit from the Supreme Court\u2019s ruling, not just the plaintiffs in the underlying litigation. If implemented as written, the order could result in billions of dollars in refunds for affected importers.<\/p>\n\n\n\n

On March 6, 2026, the government submitted the declaration of Brandon Lord, executive director of the Trade Programs at CBP, in response to the Court\u2019s order. Lord stated that refunding or reliquidating more than 53 million entries would be time-consuming and difficult, and that implementing a framework within the Automated Commercial Environment (ACE) to process refunds efficiently by importer, rather than by individual entry, would require additional time. In the declaration, Lord proposed the following process for refunds and reliquidation:<\/p>\n\n\n\n

    \n
  1. The importer files a declaration in ACE that includes a list of entries on which IEEPA duties were paid.<\/li>\n\n\n\n
  2. ACE runs a series of validations on each entry within the declaration and automatically recalculates the duty owed without the IEEPA tariffs, including applicable interest.<\/li>\n\n\n\n
  3. CBP verifies the declaration and processes refunds as soon as practicable.<\/li>\n\n\n\n
  4. ACE automatically finalizes (liquidates or reliquidates) the entries.<\/li>\n\n\n\n
  5. ACE automatically aggregates the refunds with interest by importer and liquidation date.<\/li>\n\n\n\n
  6. CBP certifies the refunds, and the Department of the Treasury then issues IEEPA refunds electronically.<\/li>\n<\/ol>\n\n\n\n

    This is not yet been implemented and is subject to change as the process is still under development by CBP. In response to the declaration, Judge Eaton suspended the part of the order requiring immediate compliance by CBP. CBP indicated that the automated refund system may<\/em> be operational within 45 days.<\/p>\n\n\n\n

    Litigation Risks and Appeals<\/strong><\/h5>\n\n\n\n

    Although the CIT\u2019s order represents a significant step toward refunds, the process remains fluid. The federal government remains within the 60-day period to seek review at the Federal Circuit, particularly given the order\u2019s nationwide application and its extension of relief to non-party importers.<\/p>\n\n\n\n

    If appealed, the litigation could affect the timing \u2014 and potentially the scope \u2014 of refunds.<\/p>\n\n\n\n

    NEXT STEPS<\/strong><\/h4>\n\n\n\n
    Understanding Liquidation and Refund Eligibility<\/strong><\/h5>\n\n\n\n

    Whether an importer receives a refund largely depends on the liquidation status of the relevant customs entries. Under U.S. customs law, importers deposit estimated duties when merchandise enters the United States, and CBP later \u201cliquidates\u201d the entry 314 days after the date of entry, issuing the final assessment of duties owed. Once an entry is liquidated, CBP has the statutory authority to reliquidate entries within 90 days of the original liquidation to voluntarily correct errors, and importers generally have 180 days to file an administrative protest challenging the liquidation.<\/p>\n\n\n\n

    The Atmus Filtration<\/em> order, if implemented, impacts four categories of entries:<\/p>\n\n\n\n

    1. Unliquidated Entries.<\/strong> Entries that have not yet liquidated must be liquidated without IEEPA duties, resulting in automatic refunds of deposits previously paid.<\/p>\n\n\n\n

    2. Liquidated but Not Final Entries (Within 90 Days).<\/strong> Entries that have liquidated but remain within CBP\u2019s voluntary reliquidation period (90 days) must be automatically reliquidated without the unlawful tariffs.<\/p>\n\n\n\n

    3. Liquidated but Not Final Entries (Within 180 Days). <\/strong>Entries that are outside of CBP\u2019s voluntary reliquidation period will require action by the importer to lodge a timely protest within 180 days from liquidation.<\/p>\n\n\n\n

    4. Finally Liquidated Entries.<\/strong> The order does not clearly address entries that have already become final, leaving open the possibility that importers may need to pursue litigation or alternative remedies to recover those duties.<\/p>\n\n\n\n

    Impact on Government Contractors<\/strong><\/h5>\n\n\n\n

    Government contractors should consider whether IEEPA tariff costs were incorporated into contract pricing, cost proposals, requests for equitable adjustment (REAs), or contract claims. If IEEPA tariffs were passed through to the government under cost-reimbursement contracts, contractors may need to assess any obligations to disclose or return any potential refunds received. Additionally, contractors with pending REAs or claims based on IEEPA tariff costs may need to evaluate how refunds and reliquidation affect those submissions.<\/p>\n\n\n\n

    Practical Steps for Government Contractors<\/strong><\/h5>\n\n\n\n

    In light of these developments, government contractors that paid IEEPA tariffs should consider taking several proactive steps:<\/p>\n\n\n\n

      \n
    1. Identify affected entries.<\/strong>\u00a0Compile entry packets, proof of payment, and documentation of any post-entry activity associated with IEEPA tariffs since April 5, 2025. Importers should maintain records of entry numbers, entry dates, HTS codes and descriptions, the type and amount of duties paid, country of origin, and liquidation dates.<\/li>\n\n\n\n
    2. Assess contract implications.<\/strong>\u00a0Government contractors seeking refunds for tariffs that affected goods delivered to the government under cost-reimbursement contracts should consider whether any potential refunds must be disclosed or returned. In addition, any requests for equitable adjustment (REAs) or claims for increased costs associated with IEEPA tariffs may need to be revised.<\/li>\n\n\n\n
    3. Review liquidation status.<\/strong>\u00a0Determine whether entries are unliquidated, liquidated but not final, or finally liquidated. This assessment is critical for determining the applicable deadlines for filing protests or pursuing litigation, if necessary.<\/li>\n\n\n\n
    4. Preserve administrative remedies.<\/strong>\u00a0For liquidated entries, importers should file protests requesting refunds, plus interest, no later than 180 days from liquidation. For unliquidated entries, importers may file Post Summary Corrections (PSCs) seeking duty refunds with interest.<\/li>\n\n\n\n
    5. Monitor CBP guidance.<\/strong>\u00a0Refund procedures will likely be implemented through administrative systems such as ACE, and importers should monitor guidance issued by CBP.<\/li>\n\n\n\n
    6. Evaluate CIT litigation options.<\/strong>\u00a0For finally liquidated entries, importers may need to pursue relief before the CIT.<\/li>\n<\/ol>\n\n\n\n

      Looking Ahead<\/strong><\/h4>\n\n\n\n

      For government contractors affected by the invalidated IEEPA tariffs, now is the time to evaluate entry data, preserve claims, and prepare for the next phase of the refund process.<\/p>\n\n\n\n

      \n\n\n\n

      When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n\n\n\n

      Republished with permission. The article, \u201cRecovering Unlawful IEEPA Tariffs: What Government Contractors Need to Know\u201d was originally published on BuildSmart by Bradley Arant Boult Cummings LLP. Copyright 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Aron C. Beezley, Nathaniel J. Greeson and Winni Zhang | BuildSmart On February 20, 2026, the U.S. Supreme Court issued a landmark decision in\u00a0Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. The ruling invalidated a broad set of tariffs imposed by… Continue reading Recovering Unlawful IEEPA Tariffs: What Government Contractors Need to Know<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,9],"tags":[9895,12,224,12301],"class_list":["post-905463","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-construction-contracts","tag-advise-consult","tag-construction","tag-construction-contract","tag-ieepa-tariffs","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nRecovering Unlawful IEEPA Tariffs: What Government Contractors Need to Know - 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