Small Firms Risk Losing $166B Tariff Refunds as CAPE Portal Opens

When the Supreme Court struck down President Trump's sweeping IEEPA tariff regime in a 6-3 decision this February, it handed American importers a legal victory worth $166 billion. The ruling invalidated every levy collected under the International Emergency Economic Powers Act from February 2025 through late 2026—dollars that the government now owes back to the more than 330,000 businesses that paid them. On April 20, U.S. Customs and Border Protection launched the Consolidated Administration and Processing of Entries system, its designated portal for processing those claims. Three weeks in, a widening gap is forming between companies likely to recover their money and the ones who may never see a check at all. The mechanics of the refund process, the downstream litigation it has triggered, and the reimposition of equivalent tariffs under separate legal authority are together producing one of the more unusual fiscal events in modern trade policy: a government simultaneously paying out and collecting in on nearly the same set of duties.

How the CAPE Portal Works—and Where It Already Stumbled

The CAPE system represents CBP's first attempt to process refunds at this scale through a single electronic mechanism. Importers or their licensed customs brokers log into the ACE Secure Data Portal and submit refund requests entry by entry. Once CBP accepts a submission, the agency projects a 45-day compliance review followed by an electronic payment within 60 to 90 days thereafter—putting the earliest possible checks in the window of late summer 2026. On April 30, Judge Richard Eaton of the U.S. Court of International Trade confirmed that the government expects to begin cutting the very first refunds around May 11, 2026.

The portal's opening day did not go smoothly. Traffic from tens of thousands of anxious importers crashed the system within hours of launch, leaving firms locked out of accounts they needed to submit claims. Three weeks in, CBP had accepted only 21 percent of submitted refund requests, with just 3 percent of entries actually in the refund-processing stage. The bottleneck is procedural as much as technical: each entry requires a valid importer-of-record number, a customs bond, and accurate Harmonized Tariff Schedule codes—documentation that large logistics firms maintain in real time but that many smaller businesses have never needed to organize at this level of detail. CBP's help line has been receiving thousands of calls daily, and wait times of several hours have been widely reported by importers who cannot resolve account lockouts through the automated portal.

Phase one of the CAPE rollout covers straightforward entries from importers of record. Subsequent phases, expected to open in coming weeks, will address more complex scenarios: entries filed through third-party brokers under bulk filing arrangements, split shipments, and goods that crossed the border during the period when CBP was processing clearances under emergency procedural guidance rather than standard ACE protocol. Each phase introduces its own documentation requirements, meaning that an importer who successfully files phase-one claims could still face separate procedures for a significant portion of their tariff exposure.

The $166 Billion Math: Accruing Interest, Unevenly Filed Claims

Of the total $166 billion refund pool, importers have so far applied for roughly $127 billion, implying at least $39 billion in eligible refunds has not yet been claimed. Treasury Secretary Scott Bessent has acknowledged the scale of the obligation in congressional testimony; court filings show the outstanding balance accrues approximately $650 million in interest each month, or about $22 million per day. That interest clock started ticking the moment each tariff payment cleared, meaning the government's total liability is growing while the processing machinery remains in low gear.

The composition of applicants heavily skews toward large, sophisticated players. Customs brokers serving major retailers filed within hours of the portal going live, often using automated ACE integrations built for routine duty drawback claims. The same infrastructure that makes a Fortune 500 supply chain fast in normal times also makes it fast at extracting court-ordered refunds. Import law specialists at several large firms have already assigned teams specifically to IEEPA refund filings, billing by the entry at rates small businesses cannot afford. For Proof Culture, a craft beverage startup in California, owner Richard Brown estimates the company is owed roughly $25,000—about 10 percent of annual revenue—but lacks the customs broker or trade attorney relationship needed to navigate the portal's technical requirements. "I feel like I'm trying to get a refund from the government, but the government wrote the refund form in a language I don't speak," Brown told NPR on May 3. Experts the outlet interviewed warned that thousands of small businesses may never recover any portion of what they are owed simply because they will miss filing deadlines or fail to gather the required documentation.

Midsize Retailers in the Crossfire: Consumer Pass-Through Litigation

While small importers struggle with the portal, a separate legal front has opened downstream. At least 17 consumer lawsuits have been filed against major retailers—including FedEx, Costco, and UPS—demanding that tariff refunds be passed through to end customers who absorbed higher prices during the tariff period. The suits, coordinated in part through the advocacy network We Pay the Tariffs, argue that retailers explicitly cited IEEPA tariff costs when justifying price increases to consumers and are therefore unjustly enriched if they retain refund proceeds without passing them back.

The litigation is legally novel. Courts have not previously adjudicated whether a company that disclosed a cost-push in consumer pricing carries a downstream obligation when that cost is retroactively voided. Legal scholars at Grayhawk Law note that the suits are likely to survive motions to dismiss given the explicitness of public tariff-cost disclosures. If even two or three cases succeed, they would establish a template pressuring remaining defendants to settle—and would effectively redirect a portion of the $166 billion away from corporate importers toward the individual households that absorbed the costs at the retail level. The downstream litigation adds a layer of uncertainty to refund planning for any retailer that made public statements attributing price increases to IEEPA tariffs during 2025.

Supply-Chain Financing Pressure and the Small-Business Structural Gap

A Federal Reserve survey released earlier this year found that 42 percent of small business owners cited rising import costs as the primary operational challenge of 2025. The Center for American Progress calculated that small businesses paid an average of $306,000 in IEEPA tariffs over the course of the year. For businesses that carried those costs on revolving credit lines, deferred supplier payments, or emergency equity rounds, the refund is not merely a windfall but a liquidity event critical to balance-sheet recovery.

The structural barriers to claiming are compounding daily. Beth Benike, co-founder of Busy Baby, a Minnesota maker of infant accessories, reported she was unable to access her importer account for over a week after launch and spent hours on hold with CBP's help line. Dahlia Rizk, owner of Buckle Me Baby in Massachusetts, says she is owed $66,000 but cannot file because her customs broker never assigned standard entry numbers to several shipments processed informally during the supply-chain scramble of 2025. The Main Street Alliance is pushing CBP to extend the refund window beyond its current deadline and to assign dedicated case workers to small-business applicants—requests CBP has not yet publicly acknowledged. Dan Anthony of the trade advisory firm Combs & Anthony told Fortune that the gap between large-firm and small-firm recovery rates is likely to exceed 40 percentage points by the time the refund window closes.

The Section 122 Workaround and What the Supreme Court Ruling Did Not Fix

The ruling eliminated the IEEPA mechanism but did not eliminate the tariffs themselves. The Trump administration moved within days of the February decision to reimpose effectively identical duty rates using Section 122 of the Trade Act of 1974, which grants the president authority to impose emergency tariffs for up to 150 days without congressional approval. Legal challenges to the Section 122 reimposition are already in circuit courts, but until a ruling comes, importers face the same headline rates on new shipments that prevailed before the Supreme Court intervened.

The policy architecture is therefore unusual: a government simultaneously refunding $166 billion from a struck-down tariff regime while collecting near-identical amounts under a different statutory authority. Matthew Seligman, a trade law scholar who submitted an amicus brief in the IEEPA case, describes the situation as a structural standoff that Congress alone can resolve: the executive will keep finding emergency statutes, courts will keep striking them down one at a time, while the underlying trade imbalances that the original policy targeted remain unaddressed. The CAPE portal, in this reading, is not the end of the tariff saga but a mid-chapter accounting exercise in a dispute likely to run through multiple additional legal cycles.

The $166 billion question will not be answered by May 11. What that date will answer is whether the government's refund machinery is capable of reaching all 330,000 importers who are owed money, or whether it delivers effectively only to the fraction with dedicated customs infrastructure. For Proof Culture's Richard Brown, for Busy Baby's Beth Benike, and for the tens of thousands of small importers who absorbed tariff costs on thin margins and tighter credit, the mechanics of a government portal may determine whether a legal victory on paper translates into actual dollars recovered. The architecture of the CAPE system—designed under court deadline pressure in a matter of weeks—was always going to struggle with that responsibility. The interest meter running at $22 million a day means the government has its own reason to process claims quickly. But processing speed and processing equity are not the same thing, and three weeks in, the early data suggest the system is moving fastest precisely where the need is smallest.