Section 122 IEEPA Tariffs Remain in Force as Federal Circuit Grants Stay; CBP Reports $94.94 Billion in CAPE Refund Pipeline

The Analysis

A customer rang me on Monday with a very short question. The ten percent, is it still coming off my invoice. I told him yes, and he did not like the answer. On 11 June 2026 the US Court of Appeals for the Federal Circuit granted the government's request to stay the Court of International Trade injunction against the Section 122 IEEPA tariffs, which keeps the 10% import surcharge in force for all importers while the appeal runs. The CIT had ruled against the government back on 7 May, but that injunction only reached the specific plaintiff-importers who brought the case. Everybody else never had relief to lose. So for most of the book nothing changed, and then nothing changed again.

The other half landed in the same week. CBP filed a declaration with the CIT on 10 June carrying the numbers on the IEEPA refunds moving through CAPE. As of 5 June: 181,155 CAPE declarations submitted, 125,576 of them passing file validation, covering about 16.74 million entries, with 10.60 million entries already liquidated or reliquidated without IEEPA duties. Roughly 94.94 billion dollars in potential and certified refunds accepted for processing, and roughly 23.68 billion dollars, duties plus interest, completed, certified and sent to Treasury. So the tariff is still being collected and the refund is still being paid out, at the same time, against the same entries. Whether the government gets to run both at once is a legal question, and it sits with Dr. Ingrid Voss — the applicable premises and the exceptions are hers to lay out. Mine is the paper in between.

So I split the book in two. One pile is entries that already cleared and already paid the 10%, and that pile is a tracking job, entry by entry. The other pile has not been declared yet, and that pile is a filing job, done before the cargo ever moves. The next hard date on the calendar is 29 June. There are two more after it. Let me put the map down first, then the dates.

Start with what the stay did not do, because that is where most people get it wrong. It did not touch a single step of how a shipment clears. The route is the same as it has always been: classification first, then the declaration elements, then inspection, then duty, then release. The 10% sits at the duty step. The only thing 11 June decided is whether you get to stop paying it, and the answer is no. On an entry filed today, the duty line carries the 10% and you pay it. If the appeal later goes the other way, what you paid becomes a refund claim instead of money you never spent. That is the whole shape of the thing. Everything else is detail, and on a customs desk the detail is where the money sits.

Dr. Ingrid Voss, our trade-compliance lead, puts it plainly: the customs side is where this bites hardest, and most importers are still under-prepared on the documentation.

Pile one is entries already filed and already paid. For you, the operative word in the CBP filing is not the 94.94 billion dollars. It is liquidation. About 10.60 million of the 16.74 million entries behind the accepted declarations have been liquidated or reliquidated without IEEPA duties. Divide one by the other and you land near 63%. Which leaves a little over six million entries still sitting in a status where the refund cannot complete. That is the queue. Not a dollar figure, a status. And not one of those six million entries is yours in particular, which is the point — the aggregate tells you the machine is moving, and tells you nothing about whether your entries are moving with it.

What you can act on is your own list. Pull every entry from 24 February forward, which is the date the 10% took effect under Proclamation 11012, issued on 20 February, and tag each one with its current liquidation status. Some will show liquidated without the duty, and that piece is done. Some will show liquidated with the duty, which is the interesting bucket. Some will still be open, and that is where the work is. The reason you want it all on one page is that a refund does not travel with your submission date. It travels with the entry status. Two importers can file on the same morning and see their money months apart, purely because one entry was nearer going final than the other.

Now the number almost nobody quoted. Of 181,155 CAPE declarations submitted, 125,576 passed file validation. That is about 69%. So somewhere around 31%, on the order of 55,000 files, did not clear validation. That is the part of this story that actually lives on a customs desk. The headline is 94.94 billion dollars in the pipeline. The daily reality is that three files in ten come back. They come back for dull reasons, and dull reasons are the worst kind, because dull reasons are avoidable. An entry summary that does not tie to the duty amount. A disbursement bank detail gone stale. A filer number or a bond reference that does not match what the entry says. When the documents do not line up, everything after them is trouble. I have said that for twenty years and it has not once been wrong.

So before you push anything else down the pipe, run the dull checks. Is the ACH information on file current, or are you about to have money owed to you with nowhere to send it. Does the payee on the refund match the importer of record on the entry. The source material lists the exact things importers should be watching — CAPE filings, refund status, reconciliation entries, protests, final liquidated entries, and the ACH or CBP Form 4811 information. Read that list as a work order rather than a reading list. The bank and payee details are where the money is told to go. If they are stale, the refund is not late. It is parked, and it will sit parked while you telephone people who cannot help you.

Then the date that matters most this month. On 29 June, CBP expects to deploy the functionality for entries flagged for reconciliation. Reconciliation entries are the ones where value, classification or duty gets trued up after the fact instead of being nailed down at entry. That sounds like an accounting footnote. In practice it explains why a slice of your paid entries could not be refunded yet: the underlying declaration was not finished, so there was nothing clean to refund against. When that functionality goes live, those entries become movable.

Which gives you eleven days from where I am standing. Between now and 29 June, the job is to get every reconciliation-flagged entry into a state where the system can act on it the moment the door opens. That means tying out the summary lines — the value you declared at entry against the value you ultimately settled at, and the duty that flowed from each. If a reconciliation is still half-finished on 29 June, the new functionality does not rescue you. It just moves you from one queue to another, and the second queue will be longer, because it will contain everyone who did exactly what you did, which is nothing until the date arrived. Being ready on the day beats being right the week after. That is almost always true, and it is certainly true here.

A caveat, and it is a large one. Reconciliation-flagged entries are what 29 June fixes. Final liquidated entries are a different animal. The government has said that CBP cannot process refunds on final liquidated entries without importer-specific court authorization. Read that sentence twice, because it changes your plan. For that bucket there is no queue to wait in. There is a court step, and a court step does not run on your filing clerk's timetable. If a real share of your paid entries are already final-liquidated, then your refund has a legal precondition attached rather than an administrative one. I do not hand out legal conclusions, but I can tell you that a plan built on the money is in the pipeline is the wrong plan for that bucket, and the wrong plan is expensive precisely because it feels calm.

Pile two is entries not yet declared. Different problem, different paper. You are paying the 10% and you should build it into landed cost today at full value, not at a net-of-refund value. If the appeal goes your way later there is a refund. If it does not, there was never a discount. Costing a shipment as though the refund were already banked is how margin disappears quietly, with nobody able to point at the moment it left.

The operational job on pile two is to leave a trail. Classification first, then whatever relief applies to that classification, and that order matters, because reversing it is the single most common mistake I see on a desk. The HTS line you pick decides not just the base duty rate but the surcharge exposure sitting on top of it, since the surcharge rides on the entered value. Say a line is correctly classified into a duty-free heading and gets put into a heading carrying 3.1%. You have not simply added 3.1% of tariff. You have also dragged that value into a 10% surcharge regime it should never have entered, and you have done it on paper that will be looked at again during any refund or any audit. A classification error is the expensive one because it compounds. Look at the code first, then the relief, in that order, every time.

What I want sitting on each not-yet-filed entry, in this order. The correct HTS line, with a one-line note on why that line and not the neighbouring one. The entered value, with the basis for it. The origin, with the document that actually supports it rather than the document that merely mentions it. And the duty computation written out line by line, so that the IEEPA-related portion is separately identifiable from the base duty. That last item is the one people skip, and it is the one that decides whether you can match your entries to a refund later. If the entry does not tell you how much of the payment was surcharge, you cannot prove what is owed back, and you will be rebuilding a calculation months after the fact out of documents that do not agree with each other.

One thing to keep an eye on while all of this is moving, and it is the part I would not want to promise you about. Enforcement attention tends to follow the paperwork, and paperwork always looks thinnest on the entries that were hurried. When a refund question is live, the entries that get pulled for a closer look are the ones where the description, the value or the origin do not stand up on their own. How heavy that gets depends on the port. Different locations read the same file with different levels of patience, and the same thin entry can sail through one and sit for a week at another. I am not going to give you a rate that applies everywhere, because there is not one. What I will tell you is that an entry carrying those four items in order is boring, and boring entries move.

Then the Executive Order. The White House issued one on customs enforcement, and the useful thing about it is what it does not do. It does not change every import requirement tomorrow. Much of it still needs DHS and CBP to write regulations, guidance and policy before it means anything at a border. So do not rebuild your whole book off a document that mostly points at future documents. What it does tell you is which way the wind is going: more accountability, stronger documentation expectations, closer attention to who is responsible in the import process. On a customs desk that reads as four questions worth answering before cargo moves. Who is the importer of record. Is that IOR setup written down somewhere, or is it an arrangement that everyone believes and nobody can produce. Is a foreign IOR or a supplier-controlled process in the chain. And are the product description, valuation, origin, classification and supply chain records complete.

The IOR question is the one with teeth, because of the refund. If the party named as importer of record is not the party that paid the duty, and not the party claiming the money back, then no amount of CAPE filing will make that payment clean. The paper has to agree across all three points: the entry, the bank, the claim. I have seen books where the entry named one entity, the freight invoice went to a second, and the refund was expected by a third. Nobody was dishonest. It simply never got reconciled, and that alone is enough to stall a disbursement for as long as it takes somebody to notice. If a foreign IOR or a supplier-run process sits in your chain, get the authorization trail in writing now, while nothing is urgent. A document that proves who may act for whom is worth nothing when you need it in a hurry, and a great deal when it is already on file before anyone asks.

There is a second queue forming behind this one. The proposed Section 301 expansion would hit 60 trading partners at rates of 10% to 12.5%, with the public comment window closing on 6 July and hearings starting 7 July. I am not going to tell you whether it lands. That is not knowable from where I sit, and it is not my lane. What I will tell you is that the preparation is the same preparation. To comment usefully you need your classification, your origin and your import values by HTS line, which is precisely the data you should already be pulling for the Section 122 refund work. So the classification cleanup you do this month for the surcharge refund pays for itself a second time on 6 July. Same records, two uses, and that does not happen often in this business.

The reason it matters is timing, not the rate. If a 301 line lands on something you import and you have to prove origin or reclassify, you will be doing it under a deadline with cargo already on the water. The importer with the records sitting in a folder does that in an afternoon. The importer who starts when the rate is announced does it with storage and demurrage running against him, and pays for the privilege of being late.

One more date, and this one is arithmetic rather than a legal reading. Section 122 allows the President to impose a surcharge of up to 15% for no more than 150 days. The proclamation was issued on 20 February 2026 and the 10% took effect on 24 February. Count 150 days forward from the effective date and you land on or about 24 July 2026. That is my own count off the effective date, not a conclusion about when the authority actually runs out — how that clock gets measured belongs to the compliance side, and I would not want a budget built on my arithmetic alone.

Put the date on the calendar anyway, because two useful things follow from it. Do not build a fourth-quarter landed cost on the assumption that a 10% surcharge is the new normal, since the statute itself limits how long one of these can run. And do not assume that a refund you are counting on stays collectible forever, because if the surcharge lapses by its own terms, entries that never paid it are not going to refund you a duty that stopped being due.

Let me put a worked example on the table, and mark every assumption as mine. Say you filed 500 entries from 24 February to now that carried the 10%. Say the average entered value on those entries was 50,000 dollars. There is no market figure behind that, it is an assumption, and your book may look nothing like it. On that basis the surcharge you paid is 10% of 50,000, or 5,000 dollars an entry, and 2.5 million dollars across the 500. That is the size of the claim.

Now lay the CBP ratios over it, purely to see the shape. Of the 94.94 billion dollars accepted, about 23.68 billion has been completed, certified and sent to Treasury, which is roughly a quarter. Of the 16.74 million entries covered, 10.60 million are liquidated without IEEPA duties, roughly 63%. Apply 63% to your 500 and about 315 entries are past the status step, while about 185 are not. Those 185 are the ones the aggregate headline cannot help, because their refund is gated on their own liquidation status and, for any sitting in the final-liquidated bucket, on a court authorization.

Then price the validation risk. About 31% of submitted declarations failed file validation. Send 500 and three in ten bounce, and you have roughly 150 files to rework. Assume each rework costs you a fortnight on average, my assumption, and on the conservative side in my experience, and a third of your claim is sitting in a repair loop while the rest of it moves. The one mercy in the whole thing is that the Treasury figure includes duties plus interest. A slow refund is not a total loss, because the money carries interest while it waits. That does not repair your cash flow, but it does mean the delay is not free money for the government either.

Now the mistake that costs the most, and it is not a filing error. It is letting an entry go final quietly while you are still expecting a refund out of it. If the Federal Circuit reverses and the tariff falls, entries that have not yet liquidated get reliquidated without the duty and the refund comes to you. Entries already gone final do not, unless something on the record is keeping the question open. So the state that matters is not did I file. It is, is my entry still open. Same importer, same payment date, same duty, two very different outcomes, decided entirely by where the entry sits in the liquidation cycle. That is the condition that flips the whole thing. Nothing about the 94.94 billion changes your answer. Your liquidation status does. Which is why the most valuable thing you can do this week is not to submit anything new. It is to get one list onto one page, sorted by status, and read it.

The counter-argument, and it is a fair one, is that chasing all of this is expensive relative to the money, and for a small importer with a handful of entries it may well be. Filing, tracking, reworking bounced declarations, watching liquidation, that is staff time, and staff time costs money. If the surcharge you paid is a few thousand dollars, the honest answer might be to book it as a cost and get back to the year. Where that line sits depends on your volume, and I am not going to pretend to know yours. What I will say is that the arithmetic changes completely if any of your entries are already final-liquidated and somebody has told you the money is coming. That is the case where doing nothing gets expensive.

So, concretely. Pull the entry list from 24 February forward and tag every entry with its liquidation status, today rather than next week, because 29 June is eleven days out and the reconciliation entries are the ones that will move when it lands. Confirm the bank and CBP Form 4811 details on file are current, so that a disbursement has somewhere to land. Tidy the classification and origin records for anything you might comment on under Section 301 before 6 July, since it is the same paperwork you already owe yourself for the refund work.

And put 24 July on the wall as my count of where the 150-day window falls from the 24 February effective date, understanding that the legal measurement of that clock belongs to somebody else. None of this is a legal position and it should not be read as one. I am telling you which paper to produce, in which order, by which date, so that whichever way the appeal turns out, you are the importer who can move. The tariff is still being charged today.

That is the fact you plan around. Everything else is a reason to be ready, and none of it is a reason to wait. This shipment can be rescued, but it has to happen this afternoon. This time the afternoon is really eleven days, until 29 June, which is long enough to do it properly and not long enough to keep putting it off.

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— By Derek Xu