Ask an Attorney - IEEPA, Is a Protest Necessary?
IEEPA – Protecting Duty Recovery Rights – Is a Protest Necessary?
While the U.S. Supreme Court is considering the legality of the Trump Administration’s IEEPA “reciprocal” tariffs, importers are questioning how to protect their right to recover duties if the Supreme Court rules that the IEEPA tariffs are unlawful. One potential option is to file a protest challenging CBP’s assessment of IEEPA tariffs on past entries.
Starting in February of 2025 CBP was instructed by the President to collect the reciprocal tariffs. Therefore, the CBP had no discretion, except to ensure that tariffs were applied accurately according to the President’s instructions. Numerous court and administrative rulings have held that where CBP has no discretion, and is merely acting in a “ministerial capacity,” importers cannot challenge the collection of duties via an administrative protest of CBP’s actions. In other words, importers aggrieved by the IEEPA tariffs must challenge the President’s orders, not CBP’s enforcement of those orders. Therefore, a case can be made that filing a protest may not protect an importer’s right to a refund if the IEEPA tariffs are ruled unlawful.
The Supreme Court is expected to decide the case in late 2025 or early 2026. In its ruling, the Court could directly order CBP to refund all money paid by all importers, set up a mechanism for importers to file claims for refunds, or it could remain silent on the issue of refunds. If the Court remains silent, CBP will have to determine its own policy on issuing refunds. Importers understandably fear that CBP will try to minimize refunds by putting up administrative barriers, including denying refunds for liquidated entries past the 180-day protest deadline. CBP may also deny all protest on the grounds that CBP’s enforcement of the IEEPA tariffs is not protestable. As of this writing, at least 80 importers, including Costco, have filed court actions for a refund under 28 USC section 1581(i) at the Court of International Trade. This type of action is available for up to two years after the effective date of the President’s orders and/or within two years of the date of the affected entries.
In sum, importers may file a protest in order to preserve their rights to collect refunds on reciprocal tariff entries that have been liquidated. Importers may also file suit under 28 USC section 1581(i) for refunds on liquidated entries past their protest deadline. The fact that an importer is in court, with an assigned court case number, may put the importer in an advantageous position versus non-plaintiff importers.
Importers who paid IEEPA tariffs should maintain records of entries, including IEEPA amounts paid, for use in pursuing refunds. They should track liquidations to monitor adverse action by CBP.
If you have any questions on how to protect your rights, please contact Taylor Pillsbury at taylor.pillsbury@mscustoms.com or Michael Jackson at michael.jackson@mscustoms.com or call (949) 719-2712.
Courtesy of Meeks, Sheppard, Leo & Pillsbury LLP
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