Months after the U.S. Supreme Court struck down President Donald Trump’s sweeping emergency-power tariffs, Canadian exporters and cross-border shippers remain caught in a refund process that is still incomplete. The February 20, 2026 ruling found that the International Emergency Economic Powers Act did not authorize the president to impose tariffs, opening the way for duties collected under that law to be returned. Since then, U.S. Customs and Border Protection has refunded well over US$100 billion, but the final stretch has proved much harder than the first. Older customs entries, incomplete claims, missing banking details and disputes over who can obtain refunds without filing a lawsuit have kept billions of dollars unresolved. For Canadian firms, the outcome often turns on one technical question that can have major financial consequences: who was listed as the importer of record when the goods entered the United States?
The Supreme Court Ended the IEEPA Tariffs, Not the Refund Problem
The legal turning point came on February 20, when the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that IEEPA did not give the president authority to impose tariffs. The majority emphasized that the Constitution assigns the power to impose duties and other taxes to Congress and that, when Congress delegates tariff authority elsewhere in trade law, it generally does so with specific language and limits. The decision invalidated the IEEPA-based tariff regime challenged in the case, including the reciprocal tariffs and the drug-trafficking duties affecting Canada, Mexico and China. But the ruling did not establish a ready-made mass-refund mechanism for every importer that had already paid those duties, leaving much of the implementation work to subsequent proceedings at the U.S. Court of International Trade.
That distinction mattered because the money had already been collected across tens of millions of import entries. On March 4, the trade court directed Customs to liquidate eligible unliquidated entries without the unlawful duties and reliquidate certain entries that had already been processed. The court subsequently allowed Customs time to build an automated system capable of handling a refund operation unlike anything the agency had previously faced. In practical terms, the constitutional question was resolved months before the administrative problem could be. For businesses that had written large tariff cheques simply to keep goods crossing the border, winning the legal argument did not immediately put cash back into their accounts.
Why Canadian Exporters Do Not All Qualify the Same Way
The most important distinction for Canadian businesses is the “importer of record,” or IOR. U.S. refunds go to the party legally recorded as responsible for importing the goods and paying the duties, not automatically to the Canadian manufacturer, exporter or shipper that ultimately absorbed the economic cost. A Canadian company that sold goods into the United States on terms that made it the importer of record can potentially claim directly. If the American customer or distributor was the importer of record, however, the Canadian exporter cannot simply submit its own CAPE declaration. It generally needs the U.S. importer to pursue the claim and then determine how the recovered money will be handled between the companies.
That distinction leaves a meaningful share of Canadian exporters outside the direct refund channel. The Canadian Federation of Independent Business reported in April that roughly one-third of small Canadian exporters had faced tariffs on goods that did not qualify for the CUSMA exemption. Among those affected firms, 26% were the importer of record and therefore positioned to seek refunds themselves. CFIB also found that other exporters had protected customer relationships by lowering prices or sharing tariff costs with U.S. buyers. Those companies may have suffered genuine financial damage while lacking the legal claim against U.S. Customs. For a smaller exporter operating on tight margins, the difference between economically “paying for” a tariff and formally paying the duty as importer of record can determine whether money comes back at all.
CAPE Was Built for a Refund Job Customs Could Not Handle Manually
The extraordinary scale of the refund exercise helps explain why payments have taken months. U.S. Customs estimated that roughly 330,000 importers paid about US$166 billion in IEEPA duties across more than 53 million entry summaries between February 3, 2025 and February 24, 2026. The agency told the trade court that its traditional entry-by-entry refund process could not handle that volume in a timely or efficient way. Customs therefore developed the Consolidated Administration and Processing of Entries system, known as CAPE, inside its Automated Commercial Environment. Phase 1 went live on April 20, nearly two months after the Supreme Court ruling, allowing eligible importers and authorized brokers to group affected entries rather than pursuing every shipment separately.
CAPE is automated, but obtaining a refund is not completely automatic. Importers or authorized brokers need an active ACE Portal account, must identify eligible entries through a CAPE declaration and need proper electronic refund banking information on file. A CAPE declaration can contain as many as 9,999 entries, illustrating just how large some importers’ claims can become. Treasury issues approved payments electronically through the Automated Clearing House system, and Customs has specifically warned that incomplete ACH enrollment can cause transactions to be rejected or held. Guidance for Canadian businesses has generally advised that valid refunds can arrive within 60 to 90 days after a CAPE declaration is accepted, although additional compliance reviews can extend the timetable. What looks like a simple refund can therefore become weeks of reconciling entries, monitoring reports and correcting account information.
Billions Have Been Repaid, but the Remaining Claims Are the Hard Ones
By any ordinary measure, the U.S. refund program has already moved an extraordinary amount of money. In an October 8 opinion, the Court of International Trade said that approximately US$136.6 billion in potential and certified refunds had been accepted for processing through CAPE as of October 2. Of that amount, roughly US$126 billion in duties plus interest had already been refunded. That represented more than three-quarters of the estimated US$166 billion originally collected under the invalidated IEEPA tariff regime. Those numbers make clear that the system is functioning and that thousands of importers have successfully recovered significant sums since CAPE launched.
The more difficult story is concentrated in what remains. The same court warned that if CAPE had stopped operating at that point, approximately US$30 billion in unlawfully collected duties would still have remained in the Treasury. Judge Richard Eaton wrote that tens of thousands of importers could otherwise be denied liquidation or reliquidation of their entries and, consequently, the refunds they are owed. That explains why national figures can look encouraging while individual businesses remain frustrated. A large importer with recent, clean entries and established customs systems may already have recovered most of its money. A smaller cross-border business with older entries, incomplete documentation or banking problems can still be waiting. The easy portion of the refund pool has increasingly given way to more complicated claims.
Partial Refunds and Broker Delays Are Keeping Money in Limbo
September data from Manufacturers Alliance offers a window into how uneven the process can be after a claim begins moving. The organization surveyed 25 enterprise-tier manufacturers and found that every respondent that had filed Phase 2 claims had received at least some money. Yet 76% of Phase 2 filers reported receiving only part of what they expected, while just 24% reported complete refunds. Among companies receiving partial payments, 54% said Customs had not provided an explanation, error code or line-level detail identifying the reason for the outstanding amount. The findings are not specific to Canadian companies, but they illustrate the same U.S. customs infrastructure through which Canadian importers of record must recover their money.
Customs brokers can add another step between the U.S. government and the business expecting the cash. Manufacturers Alliance found that only 44% of respondents with broker-handled Phase 1 refunds had received those funds in full, while 39% said some money was still being held by their broker. The same pass-through issue has appeared in the parcel business. FedEx, UPS and DHL have begun returning tariff refunds to customers in situations where the carriers acted as customs brokers, paid duties and later received reimbursements from the government. For a Canadian shipper, that creates a particularly frustrating possibility: Customs may already consider a refund processed even though the exporter, customer or company that originally financed the charge has yet to see the money.
Older Entries Became a Legal Problem of Their Own
Some of the oldest import entries have been the hardest to unwind because U.S. customs law limits when Customs can voluntarily recalculate a finalized entry. The Court of International Trade describes an entry as “finally liquidated” once it has been liquidated for more than 90 days and moved beyond CBP’s normal period for voluntary reliquidation. That complication is one reason CAPE was introduced in phases rather than opened to every claim at once. Earlier phases handled unliquidated and certain recently liquidated entries. Phase 3, launched October 6, created a route for some older entries, but initially it was available to plaintiffs in cases where the trade court had already issued orders directing Customs to reliquidate those entries.
The limitation helped produce a flood of litigation. By October 7, the trade court said more than 4,000 similar cases had been filed involving roughly 7,000 plaintiffs. Once Phase 3 opened, it moved quickly: declarations involving about 1.1 million entries and US$500 million in claimed refunds had already been accepted for processing by October 7. Yet the system exposed an uncomfortable divide. Two businesses could have paid the same unlawful tariff, but the importer that had sued and obtained a court order could gain access to Phase 3 while another importer with an equally old entry remained outside it. That disparity became especially important for smaller businesses for which filing an individual federal trade case could cost more time and money than the refund itself justified.
The Class Action Could Help Smaller Importers, but It Is Not a Payout Yet
On October 8, Judge Eaton certified a class in Freestyle World, Inc. v. United States covering importers of record that paid duties under the challenged tariff orders between February 1, 2025 and February 19, 2026, excluding companies that had already filed separate actions seeking their refunds. The court said the group encompassed tens of thousands of importers and expressed the expectation that class treatment could ultimately lead to the liquidation or reliquidation of affected entries and repayment of unlawful duties. The decision is particularly important to smaller importers and businesses with finally liquidated entries that had not been broadly accepted through CAPE without individual litigation.
Class certification, however, is not the same thing as receiving a cheque. The October 8 order certified the class and appointed class counsel, but it did not itself issue a final class-wide injunction telling Customs to immediately reliquidate every covered entry. The court ordered the parties to submit a proposed scheduling order by October 22 containing, among other dates, the deadline for the government’s response to the plaintiff’s request for judgment and injunctive relief. Further legal steps therefore remain. For Canadian businesses, the development may eventually reduce the need for thousands of separate lawsuits, but it does not eliminate the practical work. Importers still need accurate entry records, correct importer numbers and functioning banking information so that a favourable court order can ultimately translate into actual cash.
Refunds Do Not Mean the Canada-U.S. Tariff Fight Is Over
The IEEPA refund process applies to duties imposed under the emergency-powers law rejected by the Supreme Court. It does not erase U.S. tariffs imposed through entirely different statutory authorities. Canadian exporters are still dealing with Section 232 sectoral tariffs affecting products including steel, aluminum, copper, vehicles, lumber and furniture. Another major round arrived under Section 338 of the Tariff Act of 1930. Government of Canada guidance says the United States imposed 50% Section 338 tariffs on a range of Canadian products effective August 22, 2026, including plastics, furniture, electronics, machinery, wood products, textiles and sporting goods, without a CUSMA exemption. Some Section 338 duties can now also stack with Section 232 tariffs.
Those measures are already producing a new generation of legal fights. On October 20, New Jersey-based food importer Gellert Global Group sued in the U.S. Court of International Trade to challenge the Section 338 tariffs, including the 50% duty affecting Canadian cheeses it imports. The practical result is that a Canadian company can be owed money from one U.S. tariff regime while simultaneously confronting new costs under another. Businesses therefore need to separate IEEPA duties from Section 232, Section 338 and other charges when reconciling shipments, confirm which entity was importer of record and compare what Customs has approved with what brokers have actually passed through. The Supreme Court removed one legal foundation for sweeping tariffs, but it did not restore the pre-2025 trading environment. For many shippers, recovering the remaining money has become as much a cash-flow and records problem as a constitutional one.
