U.S. tariff rules in legal limbo

A U.S. trade court is deciding whether President Donald Trump’s 10 percent global tariff can stay in place while customs officials prepare a limited first round of refunds for earlier duties. (reuters.com) (cbp.gov) A three-judge panel of the U.S. Court of International Trade heard arguments on April 10 in New York over tariffs Trump announced on February 20 and put into effect on February 24. The cases were brought by 24 mostly Democratic-led states and two small businesses. (reuters.com) The administration says Section 122 of the Trade Act of 1974 lets the president impose duties of up to 15 percent for 150 days during a “large and serious” balance-of-payments deficit. Challengers say that law was written for short-term monetary stress, not for today’s long-running trade gap. (reuters.com) (politico.com) The fight started after the Supreme Court, on February 20, struck down a broad set of Trump tariffs imposed under the International Emergency Economic Powers Act. Trump turned to Section 122 the same day as a temporary replacement. (reuters.com) (politico.com) That leaves importers dealing with two separate problems at once: whether the replacement tariff is lawful, and when they will get back money paid under the tariffs the courts already invalidated. Judges did not say on April 10 when they would rule, and the current 150-day tariff is set to expire in July unless Congress extends it. (politico.com) Customs and Border Protection said it will launch the first phase of its refund system on April 20 through a new tool called Consolidated Administration and Processing of Entries, or CAPE, inside the Automated Commercial Environment portal. Phase 1 covers certain unliquidated entries and certain entries within 80 days of liquidation. (cbp.gov) The agency said only the importer of record or an authorized customs broker can file a CAPE declaration, and each filing can list up to 9,999 entries. Customs said the system will remove the International Emergency Economic Powers Act duty code, recalculate the entry, and then issue consolidated refunds with interest after review. (cbp.gov) Many companies will still be waiting. Politico reported on April 13 that more than 26,600 importers have signed up for the automatic refund system, covering about $120 billion in tariff revenue, but trade lawyers said the first phase excludes many older or more complicated claims. (politico.com) The court hearing showed how unsettled the legal footing remains. Judge Timothy Stanceu said, “We’re not quite sure how to translate 1974 into 2026,” as the panel pressed both sides on whether an old balance-of-payments law fits a modern tariff campaign. (politico.com) For now, importers are stuck between a tariff that may not survive and refunds that will not reach everyone on April 20. The next decisive dates are the court’s still-unscheduled ruling and the July deadline built into Section 122. (politico.com) (cbp.gov)