CONTENTS
- 1. Unlawful Tariffs | U.S. Customs: “Immediate Refund of IEEPA Tariffs Is Difficult; We Will Build a Streamlined System”
- - A Refund Issue Amounting to Approximately 246 Trillion Won Arises
- 2. Unlawful Tariffs | The Background to the U.S. Government's Move to Build a 45-Day Refund System
- - The Processing Limits of the Existing Tariff Administration System
- - Plan to Build a 45-Day Streamlined Refund System
- - Reorganization of the Refund Procedure Based on the ACE System
- 3. The Impact of the Tariff Refund System Reorganization on International Trade
- - The Institutional Impact on U.S. Tariff Policy
- - Variables in the Future International Trade Environment
- 4. Unlawful Tariffs | Response Matters That Import and Export Companies Should Review
- - Unlawful Tariffs, Key Matters to Review
- - Unlawful Tariffs, the Assistance of Daeryun Law Firm LLP
1. Unlawful Tariffs | U.S. Customs: “Immediate Refund of IEEPA Tariffs Is Difficult; We Will Build a Streamlined System”
On February 20, 2026, the U.S. Supreme Court ruled that the tariffs imposed by the U.S. administration under the International Emergency Economic Powers Act (IEEPA) were unlawful.
The court regarded the legal nature of the tariffs as a tax.
Under the U.S. constitutional system, the power to levy taxes rests in principle with Congress, and for the executive branch to impose a tax, a clear delegation from Congress is required.
However, because IEEPA does not expressly grant the President the authority to impose tariffs, the court held that a tariff policy based on it was a measure exceeding the scope of that authority.
It did not, however, set out the refund procedure in specific terms.
A Refund Issue Amounting to Approximately 246 Trillion Won Arises
After the ruling, the largest issue was the handling of tariffs that had already been collected.
According to data submitted by U.S. Customs and Border Protection (CBP), the scale subject to refund is as follows.
Item | Scale |
Number of Importers | Approximately 330,000 |
Number of Customs Declarations | Approximately 53 million |
Tariffs Subject to Refund | Approximately 166 billion dollars |
Conversion to Korean Won | Approximately 246 trillion won |
Because the scale of the refund is so large, a considerable burden is expected on the U.S. administrative system as well.
2. Unlawful Tariffs | The Background to the U.S. Government's Move to Build a 45-Day Refund System
Following the ruling that the tariffs were unlawful, the U.S. government faced the practical question of how to refund tariffs that had already been collected.
In particular, as the refund was estimated to reach approximately 246 trillion won, it was pointed out that the existing tariff administration system would have difficulty processing it.
The Processing Limits of the Existing Tariff Administration System
The biggest problem the U.S. government faced after the ruling that the tariffs were unlawful was processing the large-scale refund.
CBP estimated that processing the refund through the existing method would require approximately 4.4 million person-hours (based on the amount of work one person performs in one hour) of administrative work.
This is a level that the current system would find difficult to process within a short period.
Plan to Build a 45-Day Streamlined Refund System
Accordingly, through a document submitted to the Court of International Trade, CBP announced a plan to build a streamlined refund system within approximately 45 days.
The main points are as follows.
Item | Content |
Construction Period | 45 days |
Refund Method | Integrated refund on a per-importer basis |
Documents to Be Submitted | Minimized |
Refund Recipients | Companies that paid IEEPA tariffs |
CBP explained that it would streamline the refund procedure by designing it so that importers need to submit only minimal documents.
Reorganization of the Refund Procedure Based on the ACE System
U.S. tariff administration operates on the basis of a customs clearance system called ACE (Automated Commercial Environment).
CBP plans to add new functions to that system and carry out the refund procedure in the following ways.
• Calculation of refunds on a per-importer basis
• Integrated payment of the refund and interest
This is a more efficient structure than the existing method of refunding on a per-declaration basis.
3. The Impact of the Tariff Refund System Reorganization on International Trade
The refund system being pursued after this ruling that the tariffs were unlawful may serve as an occasion for change in the structure of U.S. tariff administration.
The existing refund method had the following characteristics.
Existing Refund Method | Characteristic |
Processing on a per-declaration basis | Heavy administrative burden |
Document-centered procedure | Prolonged processing period |
Individual refund method | Inefficient for large-scale refunds |
By contrast, the method now being pursued involves a structural change in that it is an integrated refund on a per-importer basis.
The Institutional Impact on U.S. Tariff Policy
This case may also affect the scope of the President's authority over tariff policy.
Because the Supreme Court interpreted the authority to impose tariffs as centered on Congress, the U.S. government may, going forward, need to secure a clearer legal basis when pursuing tariff policy.
Variables in the Future International Trade Environment
This ruling does not, however, affect every tariff policy.
The subject of the ruling is, after all, tariff policy based on the International Emergency Economic Powers Act.
The possibility has therefore been raised that the U.S. government may, going forward, pursue new tariff policy based on other statutes.
In this way, the refund system and policy changes pursued after the ruling that the tariffs were unlawful are expected to have a certain impact on the international trade environment as well.
4. Unlawful Tariffs | Response Matters That Import and Export Companies Should Review
As the U.S. government builds a large-scale tariff refund system following the ruling that the tariffs were unlawful, import and export companies also need to prepare a practical response.
In particular, because the scale of the tariff refund reaches approximately 246 trillion won, it is important to review the refund procedure, contractual relationships, and the structure of the tariff burden together.
Unlawful Tariffs, Key Matters to Review
Item to Review | Content |
Confirm transactions subject to refund | Confirm whether the import is one on which an IEEPA-based tariff was actually imposed |
Organize customs clearance and payment records | Prepare related documents such as customs declarations and tariff payment records |
Review attribution of refund rights | Confirm the party bearing the tariff under the contract and the structure for subsequent settlement |
Monitor future tariff policy | Confirm whether additional tariff policy and refund procedures change |
Unlawful Tariffs, the Assistance of Daeryun Law Firm LLP
As tariff refund procedures and changes in trade policy proceed at the same time following the ruling that the tariffs were unlawful, import and export companies need to review not only customs clearance procedures but also their contract structures and the way the tariff burden is allocated.
At Daeryun Law Firm LLP, customs experts who hold a licensed customs broker (Gwansesa) qualification work together with international trade attorneys to provide advice on a range of matters, including responses to tariff refunds, customs clearance disputes, and responses to international trade regulations.
The firm also works together with the U.S. local law firm SJKP to provide prompt advice on changes in the U.S. tariff system and on refund procedures.
If you need a legal review regarding tariff refund procedures or changes in trade regulations, you are welcome to arrange a consultation through 🔗Customs Attorney Legal Consultation Booking.
