The Trump Administration’s new tariff initiatives are reshaping the importing environment in ways that extend far beyond the tariff rates themselves. Increased duties are driving higher customs bond requirements, new executive actions are signaling a more aggressive enforcement posture, and importers are facing growing pressure to ensure that their compliance programs can withstand heightened scrutiny.

This four-part series examines these developments and their practical implications for multinational companies. This first article addresses one of the most immediate consequences of the current tariff environment: rising customs bond requirements and growing demands from sureties for collateral. As tariff rates increase, many importers are discovering that customs bonds are no longer simply a compliance requirement. They have become a significant capital management, liquidity, and operational issue.

Many importers have seen their continuous bond requirements rise not because import volumes increased, but because higher duties, taxes, and fees increased the amounts counted toward bond sufficiency. Because a customs bond is a financial guarantee to CBP that duties and other obligations will be paid, higher tariff rates can automatically drive higher bond requirements even when shipment patterns remain stable.

This has created a new reality for importers with otherwise steady operations and strong compliance histories. Companies are being required to carry larger bonds, while sureties are often imposing stricter underwriting standards, additional collateral requirements, and larger letters of credit.

To help companies navigate these challenges, this article explains why rising tariff rates are leading to enhanced bonding requirements and outlines practical steps importers can take to manage the resulting financial and operational risks. Subsequent articles in this series will examine how the Administration intends to leverage enhanced customs enforcement authorities, what importers should expect from an increasingly aggressive enforcement environment, and why certain tariff-mitigation strategies that may appear attractive in the short term can create significant legal and financial exposure over the long term.

What Is a Customs Bond?

A customs bond is a three-party financial instrument. The importer serves as the principal, the surety company serves as the guarantor, and CBP, on behalf of the United States government, is the beneficiary. The bond guarantees payment of duties, taxes, fees, penalties, and compliance-related obligations arising under customs law.

Without an active bond, a commercial importer generally cannot secure release of goods through formal entry procedures. There are two primary bond types:

• Single transaction bonds, which apply to one entry only; and
• Continuous bonds, which cover all entries made during a twelve-month period and are the standard bond vehicle for regular importers.

Most commercial importers with ongoing entry activity use a continuous entry bond.

How CBP Calculates the Continuous Bond Amount

CBP generally sets the required amount of a continuous importer bond using a formula based on the importer’s historical duties, taxes, and fees. The baseline calculation is typically 10% of the total duties, taxes, and fees paid or payable over the preceding twelve months, subject to minimum thresholds and rounding rules.

CBP reviews bond sufficiency on a rolling twelve-month basis. If duties, taxes, and fees rise significantly during the year, the agency may determine that the existing bond is insufficient and require an increase before the bond’s anniversary date.

After CBP applies the 10% formula, the number is not left as an exact figure. The amount is subject to a minimum and then rounded upward under fixed rules, with the key points being as follows:

• Minimum requirement: The standard minimum continuous importer bond is $50,000.
• General rounding rule: Bond amounts are generally rounded up to the nearest $10,000 increment.
• Higher-duty accounts: For importers whose annual duties, taxes, and fees exceed $1 million, calculations may be rounded up in $100,000 blocks.

Because CBP rounds upward, the final required bond can exceed the raw 10% calculation. To illustrate:

• If an importer paid $250,000 in duties, taxes, and fees over the prior year, 10% would equal $25,000, but the importer would still need the $50,000 minimum bond.
• If an importer paid $900,000, 10% would equal $90,000, which would generally become the required bond amount.
• If an importer paid $1,150,000, 10% would equal $115,000. Depending on the applicable rounding convention for accounts above the $1 million threshold, the required bond could increase materially above that raw figure.

How Importers Calculate Their Required Continuous Entry Bond Amount

To estimate whether a current continuous bond remains sufficient, importers generally need four core pieces of information:

• the total duties, taxes, and fees paid over the prior twelve months;
• the current trend in duty exposure, including expected tariff increases;
• confirmation of the sufficiency figures reflected in CBP systems, often obtained through the ACE portal or through a licensed customs broker; and
• a reasonable projection of estimated imports and applicable tariffs going forward one year.

It is important to focus on actual duties, taxes, and fees paid to the government, not the entered value of imported merchandise. In a period of tariff volatility, duty trend data may be more important than shipment count alone.

The recent wave of tariff actions has intensified the bond issue because bond sufficiency is directly tied to duties, taxes, and fees. When tariffs increase through executive orders, trade remedies, new Section 301 announcements, or due to new antidumping/countervailing duty orders, the bond formula rises mechanically. This means an importer can face a bond increase even where business volume remains flat.

That is one reason the issue is expected to become even more pronounced if additional Section 301 tariffs take effect. Importers that maintain bonds at or near the minimum required level may face repeated insufficiency notices if expected tariff increases are not built into their forecasts.

Why Surety Underwriting Often Exceeds the CBP Formula

Many importers are finding that the surety market is reacting more aggressively than CBP’s regulatory formula. CBP’s bond requirement is largely mechanical. It is based primarily on historical duties, taxes, and fees and projected bond sufficiency under the agency’s rolling twelve-month methodology. Sureties, however, are not limited to that formula. They underwrite to worst-case exposure, timing risk, collectability risk, and the possibility that liabilities will remain open or increase well after entries are filed.

That distinction is especially important in the current tariff environment. CBP may calculate a bond amount using standard historical metrics, but a surety may conclude that the importer’s actual risk profile is materially higher because of tariff volatility, the possibility of retroactive duty increases, or the extended tail associated with unliquidated entries, audits, protests, and post-entry adjustments. In practice, this means an importer may technically meet CBP’s bond formula and still be asked by the surety to provide collateral, a letter of credit, indemnity support, or additional financial documentation.

In evaluating an importer, sureties may consider:

• Unliquidated entries. Open entries extend the period during which liability can change, particularly where final duty treatment remains uncertain.
• Tariff volatility. Rapid changes in applicable duty rates can increase projected exposure even where shipment volume is stable.
• Financial statements, liquidity, and working capital. Sureties assess whether the importer has the financial strength to absorb higher duty obligations or reimburse the surety if a claim is paid.
• Industry risk. Certain sectors are viewed as higher risk because of enforcement activity, trade remedy exposure, valuation disputes, or country-of-origin complexity.
• Prior claims history. Past bond claims, compliance issues, or payment problems can materially affect underwriting.
• Concentration of sourcing or commodity exposure. Heavy dependence on a single country, supplier base, or tariff-sensitive product category can increase perceived risk.
• Exposure to trade remedies such as antidumping and countervailing duties. AD/CVD issues remain among the most significant drivers of conservative surety underwriting.
• Section 232 exposure. Imports of steel, aluminum, and derivative products, as well as products subject to quota, melt-and-pour, or derivative classification questions, may receive heightened scrutiny.
• Section 301 and IEEPA-related exposure. Sureties may evaluate whether current sourcing patterns are vulnerable to sudden tariff increases or changes in executive trade actions.
• Classification, valuation, and origin complexity. Where the tariff treatment depends on difficult classification issues, substantial assists, transfer pricing questions, or country-of-origin determinations, sureties may see greater risk of post-entry adjustments.
• Importer maturity and business history. Newer companies, rapidly growing importers, and businesses without a long financial or compliance record may face more demanding underwriting.
• Open audits, investigations, or reconciliations. Participation in reconciliation programs, pending Focused Assessments, or other agency reviews can increase concern about unresolved exposure.
• Customs broker and compliance controls. Weak internal controls, limited visibility into ACE data, or lack of a documented compliance program may also affect underwriting outcomes.

Sureties may also react strongly to other indicators of contingent customs liability. These can include:

• significant use of first sale valuation, transfer pricing, or other valuation methods that could be challenged later;
• repeated or high-value post-summary corrections or protests;
• substantial reliance on free trade agreement claims or special tariff programs where eligibility may later be questioned;
• imports involving forced labor, sanctions, export controls, or admissibility concerns, which may signal broader compliance risk;
• high-volume imports from jurisdictions subject to changing trade policy or geopolitical risk; and
• evidence that the importer routinely sizes bonds close to the minimum required threshold rather than building in capacity for duty fluctuations.

The result is that surety underwriting frequently exceeds the narrow CBP formula. CBP’s approach establishes the minimum amount of bond security the agency expects based on historical duties and projected exposure. The surety market, by contrast, prices and underwrites the risk that liability will rise, remain unresolved, or become difficult to recover from the importer. In a period marked by tariff volatility, Section 301 uncertainty, Section 232 complexity, and ongoing AD/CVD enforcement, that distinction has become increasingly important. For many importers, the real constraint is no longer CBP’s minimum bond formula alone, but the broader private-market underwriting standards applied by the surety.

Why AD/CVD Orders and Section 232 Duties Have an Outsized Bond Impact

Importers of merchandise subject to antidumping and countervailing duties often face the most demanding bond and underwriting conditions. AD/CVD exposure creates both duration risk and magnitude risk: entries can remain unliquidated for years because of administrative reviews, litigation, and scope disputes, and final duty liability can increase materially above the cash deposit rate paid at entry. That long-tail exposure is difficult for sureties to quantify and close out, which is why AD/CVD entries frequently trigger heightened scrutiny, larger collateral demands, and, in some cases, bond structures more stringent than the standard continuous bond formula.

This risk is not limited to importers with obvious AD/CVD exposure. Companies operating in sectors commonly affected by AD/CVD orders may also be viewed as higher risk because of the possibility of scope challenges, supplier-specific rate changes, classification disputes, and post-entry adjustments. As a result, even indirect AD/CVD exposure can influence a surety’s willingness to write or expand a bond without substantial security.

Section 232 duties also can have a disproportionate effect on bond requirements, particularly for importers of steel, aluminum, copper, and derivative products. In the current environment, Section 232 is not simply an added duty line item; it is a moving regulatory framework shaped by shifting tariff rates, evolving derivative product coverage, product exclusions, country-specific treatment, quota arrangements, and origin-related requirements. For steel and aluminum in particular, questions involving classification, derivative scope, melt-and-pour rules, smelt-and-cast rules, and the interaction of Section 232 with other duty regimes can make ultimate liability less predictable. Copper-related measures and potential expansions add another layer of uncertainty for importers whose products may fall within changing enforcement priorities or derivative coverage analyses.

That uncertainty matters for bond purposes. Because continuous bond amounts are tied to duties, taxes, and fees, changes in Section 232 treatment can increase the bond amount directly. Beyond the formula itself, sureties may take a more conservative view where imports are exposed to classification disputes, changing scope interpretations, or policy shifts affecting steel, aluminum, copper, and related derivatives. In those cases, the bond amount may reflect not only current duties paid, but also the broader uncertainty associated with future tariff treatment, post-entry review, and unresolved exposure.

Collateral Demands Are Becoming More Common

As bond amounts rise and underwriting standards tighten, more importers are being asked to provide collateral in order to keep bonds in place. Typical forms of collateral include:

• cash collateral;
• irrevocable letters of credit;
• corporate guarantees;
• personal indemnities; or
• combinations of the above.

The letter of credit is the most common structure because it secures the surety’s risk without requiring immediate cash payment to the surety. It does, however, tie up bank capacity, trigger fees, and can affect broader financing arrangements. Cash collateral directly reduces liquidity. In some cases, importers may find that the surety’s collateral demand approaches or even exceeds the amount of the bond required by CBP. This can become a significant capital allocation issue, particularly for smaller and mid-sized importers.

Stacking Liability and Extended Exposure

One of the most important concepts in customs bond underwriting is stacking liability. Each continuous bond term creates a separate period of exposure. When a bond renews annually, liabilities from prior bond periods do not disappear immediately. Entries from earlier periods may remain unliquidated or subject to review for years.

From the surety’s perspective, this means exposure can accumulate across multiple bond periods until all entries are liquidated and no further adjustments are possible. The stacking effect is one reason sureties may demand more collateral than the CBP formula alone would suggest.

This issue is particularly relevant where importers make repeated bond increases mid-term. Frequent upward adjustments can complicate the surety’s risk profile and raise concern about expanding open exposure.

Cash in Lieu of a Surety Bond

Importers are not limited to traditional surety-backed bonds. One lawful and sometimes overlooked alternative is cash in lieu of a surety bond. Under this approach, the importer files the standard customs bond form, commonly Form 301, and secures the bond with cash deposited directly with the U.S. Treasury rather than through a private surety.

This can eliminate private underwriting concerns, including collateral multiples, letters of credit, or personal indemnity requirements. However, the tradeoff is that the importer’s own cash is tied up for the life of the bond and potentially longer while liabilities remain open. The funds generally do not earn interest, and additional cash may need to be posted if CBP later determines that the bond amount must increase.

For some companies, especially where surety underwriting has become difficult or costly, this may still be a practical option.

Hybrid Funding Strategies

Some importers use a hybrid approach, combining surety support with partial cash collateral or bank-issued letters of credit. This can help preserve liquidity while addressing underwriting concerns. Depending on the importer’s balance sheet, trade profile, and banking relationships, hybrid structures may offer a more flexible path than an all-cash or fully collateralized surety model.

Practical Steps for Importers

Given the current environment, importers should consider taking the following steps:

• Review current bond sufficiency using rolling twelve-month duties, taxes, and fees;
• Model expected duty exposure under current and anticipated tariff actions, including Section 301 developments;
• Confirm CBP bond sufficiency data through ACE or a licensed customs broker;
• Prepare internally for collateral requests, including coordination with finance, treasury, and lending partners;
• Evaluate whether mid-term bond increases are likely and whether a larger initial bond may be more prudent;
• Assess AD/CVD exposure carefully, including indirect commodity or sector risk;
• Consider whether cash in lieu of a surety bond is viable if private underwriting becomes too restrictive; and
• Explore hybrid structures that balance liquidity preservation against surety demands.        

Continuous customs bond requirements are driven first by CBP’s formula, which is linked to duties, taxes, and fees, and second by the private surety market’s reaction to risk, timing, and collectability. Elevated tariffs imposed through executive authority in 2025 have increased baseline bond requirements for many importers even where shipment volumes remain stable. At the same time, sureties have responded with tighter underwriting, more collateral demands, and greater sensitivity to open liability and tariff volatility.

For importers, especially smaller and mid-sized companies, customs bond planning is now a strategic issue that intersects with compliance, liquidity, and overall capital management. Companies that understand how bond amounts are calculated, how sureties evaluate exposure, and what options exist for satisfying bond requirements will be better positioned to manage risk and avoid disruption as tariff pressure continues to build.

Of course, importers should understand that the financial pressures associated with rising bond and collateral requirements are only one part of the broader customs enforcement landscape. In addition to CBP’s increased scrutiny of bond sufficiency, duty exposure, and importer compliance, the Department of Justice is becoming a more prominent player in tariff enforcement. The next two articles in this series will focus on the rapidly rising enforcement risks in the importing area.

Would you like more practical compliance tips like these? The Foley International Trade & National Security Team is monitoring all international trade, enforcement, and compliance developments, which we post as they occur on our Tariff & International Trade Resources blog. for our email list to receive future emails and practical international regulatory compliance tips, including our biweekly What Every Multinational Should Know articles.

Our white paper on Managing Import and Tariff Risks During a Trade War outlines a 12-step plan to provide practical steps to help importers navigate the tariff and international trade risks in the current tariff and trade environment, while the companion white paper on Managing Supply Chain Integrity Risks provides practical advice to deal with heightened supply chain risks pertaining to goods imported into the United States, including the increasing use of detentions by Customs.

(And How Importers Can Head Off Its Attempts To Keep Billions of Dollars of Unlawfully Collected IEEPA Tariffs)

For months, the U.S. Government has signaled it would challenge the Court of International Trade’s (CIT) authority to require refunds of IEEPA tariff payments for “finally liquidated” entries (those more than 90 days after liquidation). That challenge has now arrived. In recent CIT filings and in its appeal to the U.S. Court of Appeals for the Federal Circuit (CAFC), the Government has argued that the CIT cannot order the return of finally liquidated IEEPA tariff payments, except for plaintiffs that have filed protective actions under 28 U.S.C. § 1581(i).

A version of this article was initially published as What Every Multinational Should Know About … the Government’s Appeal of Judge Eaton’s Universal IEEPA Tariff Refunds Order (and Why It Is Claiming It Can Keep Billions of Dollars of Unlawfully Collected IEEPA Tariffs) on June 11, 2026.

This position creates significant uncertainty for importers who have not filed protective actions at the CIT:

• The most immediate issue involves “finally liquidated” entries, with the U.S. Government arguing it can retain $30 billion or more in unlawfully collected IEEPA tariffs.
• The concern, however, is not limited to those entries. Other categories outside CAPE Phase 1, including reconciliation entries and entries involving antidumping or countervailing duty (AD/CVD) issues, may also face delayed, uncertain, or disputed refund treatment depending on how CAPE Phases 2 and 3 develop and the full arguments the DOJ chooses to raise on appeal.

More than 3,500 importers have already filed protective actions, but many more have not. Importers with a meaningful volume of entries more than 80 days past liquidation—or with substantial reconciliation or AD/CVD-affected entries — should consider filing a section 1581(i) protective action to preserve refund rights and potentially improve their position for earlier relief, if they have not already filed such actions.

What is the Status of the CIT’s Oversight of IEEPA Refunds?

In late May, Judge Eaton signaled increasing concern about the Government’s pace of complying with the CIT’s IEEPA refund orders. In response to the court’s requests for briefing, the Government stated on May 29^th that it intended to appeal the refund orders as impermissible universal injunctions, arguing that the CIT cannot extend relief to non-parties that did not file protective actions under Section 1581(i). The Government also stated that, for finally liquidated entries, it would seek to limit relief to the named plaintiffs. The number of such entries continues to grow every day.

On June 3, the Government filed its appeals in the Federal Circuit, again pressing its universal-injunction argument. Then, at a June 9^th hearing, a CBP representative stated that CAPE Phase 3 — covering, among other things, finally liquidated entries — will begin processing refunds, but only for importers that filed Section 1581(i) actions.

The net result is straightforward: importers that have filed Section 1581(i) protective actions are best positioned to recover their full IEEPA refunds. Importers that have not filed are likely, at a minimum, to face significant delays while the appeals process unfolds. Depending on the ultimate outcome, they may not recover certain refunds at all.

What is Happening at the Federal Circuit?

It is not yet clear how the Federal Circuit will resolve the Government’s appeal of the CIT’s refund orders. The Government will rely heavily on Trump v. CASA, 606 U.S. 831 (2025), arguing that Judge Eaton’s orders are impermissible universal injunctions because they extend relief beyond the named plaintiffs. The Government also likely will argue that any importer has an adequate remedy by filing its own Section 1581(i) action.

Plaintiffs, by contrast, are likely to argue that CASA does not control because the CIT is not an ordinary district court, and its customs jurisdiction is closely tied to the administration of a uniform tariff regime. From that perspective, requiring CBP to refund unlawfully collected tariffs on a uniform basis is not an improper extension of relief to non-parties, but a necessary consequence of the court’s role in supervising the lawful administration of customs duties. Plaintiffs are also likely to argue that limiting refunds for finally liquidated entries to importers that filed Section 1581(i) actions would undermine the constitutional and statutory requirement of uniformity by allowing the Government to retain unlawful tariff payments from some importers while refunding identical payments to others.

Plaintiffs may also argue that the statutory rules barring refunds of “finally liquidated” entries do not apply in this context at all, as that statutory restriction presupposes any tariff collection was lawful. Here, however, the Supreme Court has ruled the opposite. That creates a substantial argument that the usual rules governing finality of liquidation do not control, or at least cannot override the Supreme Court’s merits ruling.

Another potentially important distinction is that this case does not present the usual concern associated with nationwide or universal injunctions. In the ordinary case, the objection is that a single trial court is effectively making national policy before the merits have been finally resolved. Here, by contrast, the CIT is the only court that can ever consider the IEEPA refunds issue, meaning any ruling is automatically universal.

In practical terms, the appeal divides importers with non-Phase 1 refund claims into two groups: those that have filed protective actions and those that have not. Importers in the latter category may face material delays, additional administrative obstacles, and potentially the loss of refunds for finally liquidated entries or other categories outside CAPE Phase 1.

Why Is the Set of Finally-Liquidated IEEPA Tariff Entries Important?

In some respects, the Government has moved surprisingly quickly to implement refunds. It has represented that more than $95 billion of the approximately $166 billion in IEEPA tariff payments has already been queued for refund through CAPE. The problem is that the entries the Government is now contesting consist of those liquidated more than 80 days ago (90 days minus a ten-day buffer) and are therefore “finally liquidated” under the Government’s current view of CAPE Phase 1.

At first glance, that category might appear relatively narrow because CBP often liquidates entries approximately 314 days after importation. In practice, however, CBP frequently liquidates entries much sooner than 314 days after importation, particularly for lower-value informal entries or those where companies filed post-summary corrections.

As a result, for many importers, the universe of entries more than 80 days past liquidation is much broader than it first appears.

Bottom Line — What Should Importers Do Now to Best Preserve IEEPA Tariff Refunds?

Importers that have not filed protective actions under 28 U.S.C. § 1581(i) may face substantial delays — or potentially no recovery at all — for certain categories of IEEPA tariff refunds outside CAPE Phase 1. Against that backdrop, the most prudent course is twofold: continue pursuing refunds through CAPE, but also consider filing a protective Section 1581(i) action.

The same analysis applies to reconciliation entries and entries involving AD/CVD issues. Although such entries may be addressed in CAPE Phase 2, the timing and scope of that relief remain uncertain. There is also risk that disputes over those categories could become entangled in the Government’s broader appellate arguments about the availability of relief for non-parties. A protective Section 1581(i) action may therefore offer an additional advantage by putting importers in a better position to seek earlier or more targeted relief.

A protective Section 1581(i) action does not require an importer to abandon CAPE or assume that full litigation will be necessary. Rather, it functions as an insurance policy, preserving the importer’s own claim while the courts decide whether the Government can lawfully withhold refunds from non-parties for finally liquidated or otherwise excluded entries.

If you would like more information about potentially filing a Section 1581(i) protective filing, please reach out to the authors or your Foley relationship attorney.

Frequently Asked Questions: Preserving the Right to IEEPA Tariff Refunds

FAQ #1: What are the IEEPA tariffs, and how can companies determine how much they paid?

The IEEPA tariffs were imposed by the Trump Administration in 2025 under the International Emergency Economic Powers Act (IEEPA). These tariffs included:

• Fentanyl-related tariffs announced in February 2025 on China, Mexico, and Canada;
• Global and reciprocal tariffs announced in April 2025 (“Liberation Day”) addressing trade imbalances; and
• Country-specific tariffs announced later in 2025 on India and Brazil.

Although the Supreme Court directly reviewed only the first two tariff programs, the logic of the Court’s decision—that IEEPA does not authorize broad-based tariffs—likely has implications for all tariffs imposed under IEEPA.

Importantly, IEEPA tariffs do not include:

• Section 232 sectoral tariffs (e.g., steel, aluminum, copper, lumber, automotive tariffs);
• Section 301 tariffs on China;
• antidumping or countervailing duties; or
• the normal HTS tariffs in Chapters 1–97.

Companies can determine their IEEPA tariff exposure by reviewing data in Customs’ Automated Commercial Environment (ACE). This typically involves running reports beginning February 1, 2025 and filtering for entries containing the relevant Chapter 99 tariff provisions associated with IEEPA measures (such as 9903.01.xx or 9903.02.xx).

If a company does not have ACE access, its customs broker can typically generate the necessary reports.

FAQ #2: What is the deadline to file a §1581(i) action?

Section 1581(i) actions are generally subject to a two-year statute of limitations under 28 U.S.C. § 2636(i). But there is significant uncertainty as to when that period begins to run, including whether it could be tied to:

• the date duties were paid;
• the date of liquidation; or
• the date of the Supreme Court’s decision.

Because the Government may raise timeliness defenses under any of these theories, importers should consider filing sooner rather than later.

There is also a separate timing concern: Section 1581(i) is a residual jurisdictional provision and may become unavailable if another avenue of review is deemed adequate. For that reason, waiting may create additional risk. The safest course for importers that want to preserve judicial options is to evaluate protective filing promptly.

FAQ #3: Can companies still recover refunds if their entries have already been liquidated?

Possibly, but liquidation creates additional risk. Ordinarily, liquidation makes duties final and conclusive unless the importer files a timely protest. In the IEEPA litigation, however, the CIT has indicated that, at least for importers that filed Section 1581(i) actions, the court may have authority to order relief even for liquidated entries.

The greatest concern now is with finally liquidated entries—that is, entries liquidated more than 90 days earlier, or more than 80 days earlier under CBP’s current CAPE framework. The Government has expressly argued that refunds for those entries should be limited to importers that filed protective Section 1581(i) actions.

That issue is particularly important because the universe of finally liquidated entries is larger than many companies assume. CBP often liquidates entries more quickly than the outer statutory timeline, especially for lower-value or informal entries, and post-summary corrections can also accelerate liquidation.

FAQ #4: Will refunded IEEPA tariffs include interest?

Yes.

FAQ #5: What information is required to file a §1581(i) action?

A typical filing includes a summons, complaint, and supporting disclosures. To complete the filing, importers generally must provide:

• the identity of the importer and its principal place of business;
• the importer’s corporate ownership structure, including publicly held parent companies and affiliates;
• identification of any real party in interest, if different from the importer;
• whether the importer has requested extensions of liquidation from CBP; and
• whether the importer has filed post-summary corrections or protests relating to IEEPA entries.

FAQ #6: What happens if an importer does not file a protective action?

An importer that does not file may face substantial uncertainty. At a minimum, it may have to wait while the Federal Circuit and potentially the Supreme Court address the scope of the CIT’s refund authority. More specifically, it may face:

• the risk that refunds will be limited to parties before the court;
• additional complications arising from liquidation finality;
• delays or uncertainty as to reconciliation and AD/CVD-related entries; and
• reliance on administrative refund mechanisms that may be incomplete or delayed.

In the worst case, an importer that does not file may be unable to recover certain refunds at all.

FAQ #7: Can non-importers of record recover IEEPA tariffs?

Generally, only the importer of record has standing to obtain duty refunds directly from CBP. That said, other parties that ultimately bore the economic burden of the tariffs may have contractual or commercial arrangements with the importer regarding the allocation of any refund recovery.

The Foley International Trade & National Security Practice

The Foley International Trade & National Security Team covers the full gamut of international trade needs, including for tariffs, customs, supply chain/supply chain integrity, trade remedies/antidumping/countervailing duty, export controls, economic sanctions, and CFIUS national security filings. Our Tariff & International Trade blog regularly publishes practical guidance, like this client alert, on all international trade topics and compiles it by topic area on the Foley Tariff & International Trade Resources blog. for our email list to receive future emails and practical international regulatory compliance tips, including our What Every Multinational Should Know articles.

For much of the past year, the principal focus of the IEEPA tariff litigation has been whether the tariffs were lawful and whether importers would ultimately be entitled to refunds. Following the Supreme Court’s February 2026 decision invalidating the tariffs and the subsequent proceedings before the Court of International Trade, those questions have largely been answered. The focus has increasingly shifted from whether refunds should be paid to how those refunds will be processed, administered, and distributed.

As CBP continues implementing refunds through the CAPE process and related reliquidation procedures, however, a new issue is beginning to emerge. For many companies, the most significant disputes associated with IEEPA refunds may no longer involve the government at all. Instead, they may involve customers, suppliers, distributors, shareholders, bankruptcy stakeholders, and other private parties seeking to claim a portion of the resulting recoveries.

At first glance, the answer may appear straightforward. The importer of record paid the duties and therefore receives the refund. From a customs perspective, that is generally correct. CBP’s relationship is with the importer of record, and refund payments are ordinarily made to the party that paid the duties.

The more difficult question is whether other parties may possess contractual, equitable, or commercial claims to some portion of those funds once they are received.

For many companies, that question may prove significantly more complicated than the underlying tariff litigation itself.

Why Refund Ownership May Become the Next Major Dispute

The emerging disputes surrounding IEEPA refunds arise from a fundamental distinction between customs law and commercial reality.

From CBP’s perspective, the analysis is relatively straightforward. The importer of record paid the duties and receives the refund. The customs process generally does not attempt to determine which participant in a supply chain ultimately absorbed the economic burden of those duties.

Commercial relationships, however, often operate very differently.

Over the course of the IEEPA tariffs, many companies took steps to offset the financial impact of the duties. Some imposed tariff surcharges. Others increased product prices. Still others renegotiated supply agreements, implemented cost-sharing arrangements, modified purchasing terms, or otherwise attempted to pass tariff costs through the supply chain. In many industries, the economic burden of the tariffs ultimately moved well beyond the importer of record.

As a result, the party that paid the tariffs to the government may not be the same party that ultimately absorbed those costs. In some situations, the importer may have borne the full burden of the tariffs. In others, the costs may have been passed entirely to customers. In still others, the burden may have been shared among multiple participants throughout the supply chain.

This distinction between paying the tariff and bearing the cost of the tariff lies at the heart of the disputes that are now beginning to emerge. As refunds begin to flow, downstream purchasers, distributors, retailers, consumers, and other commercial counterparties are increasingly asking whether they possess a claim to some portion of those recoveries if they previously reimbursed another party for tariff-related costs.

There is unlikely to be a single answer to that question. Rather, the outcome will often depend on the specific facts surrounding the transaction, including the contractual arrangements between the parties, the manner in which tariff costs were allocated, the existence of tariff pass-through provisions, and the representations that were made when those costs were incorporated into pricing decisions.

Businesses receiving significant IEEPA refunds should therefore begin evaluating not only whether they are entitled to receive the refund from CBP, but also whether other parties may claim an interest in those funds once they are received.

Why Consumer Refund Claims Face Significant Obstacles

A number of consumer class action lawsuits have been filed seeking recovery of tariff-related price increases. Although the legal theories vary, the underlying premise is generally the same: companies allegedly increased prices in response to IEEPA tariffs and therefore should not be permitted to retain tariff refunds if those tariffs are ultimately returned by the government.

At a practical level, this argument has intuitive appeal. Consumers may reasonably ask why a company should be permitted to retain a refund if the economic impact of the tariff was previously reflected in higher prices.

The legal analysis, however, is considerably more complicated.

One of the threshold challenges facing many consumer plaintiffs is establishing that they possess a legal entitlement to any portion of a tariff refund in the first place. Consumers generally purchased products at prevailing market prices, not contractual rights to future tariff recoveries. The fact that a company increased prices while tariffs were in effect does not necessarily create a legal obligation to reduce prices or issue refunds if the company’s costs subsequently decline.

Even if such a theory were recognized, significant evidentiary challenges would remain. During the period in which IEEPA tariffs were in effect, businesses faced numerous factors affecting pricing decisions, including inflation, transportation costs, labor expenses, supply-chain disruptions, inventory management concerns, and broader market conditions. Isolating the precise impact of tariffs on any particular product, transaction, or consumer purchase may prove difficult.

Additional complications arise where tariff costs were incorporated into broader pricing decisions rather than separately identified as a distinct surcharge. In many cases, tariffs became only one of many factors influencing overall pricing decisions. Determining whether a particular consumer paid more as a result of tariffs, and if so by how much, may therefore require a highly fact-intensive analysis.

For these reasons, while consumer litigation is likely to continue, many of these cases may face substantial hurdles long before a court reaches the ultimate question of whether any refund should be passed through to consumers. The central issue may not be whether tariffs affected prices. Rather, it may be whether consumers possess a legally enforceable right to recover funds that were refunded to the importer years after the original purchase occurred.

Why Business-to-Business Claims May Present the Greater Risk

While consumer lawsuits have received significant attention, the more consequential disputes for many companies may arise within commercial supply chains.

Unlike consumer transactions, business-to-business relationships are frequently governed by detailed contracts addressing pricing, tariff allocation, cost-adjustment mechanisms, reimbursement obligations, and other commercial matters. As a result, commercial counterparties often possess legal theories that are considerably stronger than generalized claims of unfairness or unjust enrichment.

Indeed, the key distinction is that consumer plaintiffs frequently rely on broad equitable arguments, while commercial counterparties may possess express contractual rights. As IEEPA refunds begin to flow, reports are already emerging of downstream purchasers asserting that they are entitled to all or a portion of those recoveries because they previously reimbursed suppliers for tariff-related costs.

For many companies, the central question will be whether the parties merely agreed that tariff costs would be passed through to the purchaser, or whether they also addressed what would happen if those tariff costs were subsequently refunded. Unfortunately, many agreements were drafted when the possibility of a large-scale judicial invalidation of tariffs seemed remote, leaving little guidance regarding how future refunds should be allocated.

As a result, companies may find themselves revisiting provisions that were originally drafted to address tariff increases rather than tariff refunds.

Among other things, parties may need to evaluate:

• Whether tariffs were expressly addressed in the contract.
• Whether tariff costs were separately identified and passed through.
• Whether the agreement contained change-in-law provisions.
• Whether tariff surcharges were temporary, permanent, or subject to adjustment.
• Whether the parties addressed the possibility of future tariff refunds.
• Whether pricing adjustments were intended to reimburse actual tariff costs or merely reflect changing market conditions.
• Whether the purchaser agreed to bear the tariff burden permanently or only while the tariffs remained in effect.

The answers to these questions may vary significantly from one contract to another.

Why Cascading Claims Increase Litigation Risks

The complexity increases further because these disputes may not remain confined to a single contractual relationship.

In many industries, tariff costs moved through multiple levels of the supply chain before ultimately reaching the end customer. Manufacturers passed costs to distributors. Distributors passed costs to wholesalers. Wholesalers passed costs to retailers. Retailers passed costs to consumers. If refunds are later paid to an importer near the beginning of that chain, multiple parties may argue that they bore some portion of the economic burden and therefore possess a claim to the resulting recovery.

This creates the possibility of cascading claims throughout the supply chain. A downstream purchaser may seek recovery from its supplier. That supplier may then seek reimbursement from another entity further upstream. Additional parties may in turn attempt to pursue recovery from other participants in the chain.

In complex supply chains involving multiple intermediaries, determining who ultimately absorbed tariff costs may become extraordinarily fact-intensive. The analysis may require reviewing years of pricing decisions, contract amendments, surcharge programs, customer communications, and cost-allocation practices. Matters become even more complicated where products were sourced from multiple countries, tariff costs fluctuated over time, or pricing changes were driven by a combination of tariffs and broader market conditions.

As a result, future disputes may involve a wide range of legal theories, including breach of contract, unjust enrichment, indemnification, contribution, declaratory judgment actions, and other commercial claims. What initially appears to be a straightforward customs refund may therefore evolve into a much broader dispute concerning how tariff costs were allocated throughout the supply chain and who ultimately bore the economic burden of those costs.

For many companies, this may prove to be the most significant unresolved issue arising from the IEEPA refund process. The litigation over whether refunds would be paid may be winding down. The litigation over who ultimately owns those refunds may only be beginning.

Litigation Is Not the Only Risk

Even where no lawsuit is filed, companies should not assume that the receipt of a significant IEEPA refund will be free from scrutiny.

Many organizations spent months or years explaining the impact of IEEPA tariffs to customers, suppliers, investors, lenders, and other stakeholders. In some cases, companies imposed tariff surcharges, implemented price increases, renegotiated contracts, or otherwise communicated that tariffs were increasing costs and affecting commercial decisions. As refunds begin to flow, those same stakeholders may naturally ask what happens next.

Organizations that publicly attributed price increases to IEEPA tariffs may face questions from customers, suppliers, investors, regulators, and the media regarding how refund proceeds are ultimately used. Even where no legal obligation exists to pass refunds through to downstream parties, companies may nevertheless confront commercial pressure to explain why they are retaining recoveries associated with costs that were previously passed through the supply chain.

Conversely, companies that elect not to pursue available refunds may face a different set of challenges. Shareholders, lenders, bankruptcy stakeholders, private equity sponsors, and other interested parties may question whether management exercised appropriate diligence in protecting corporate assets. For some organizations, particularly those facing financial pressure or operating in distressed situations, decisions regarding whether and how to pursue refunds may themselves become the subject of scrutiny.

The result is that many companies may face difficult questions regardless of which path they choose. Pursuing refunds may create expectations among customers, suppliers, or other counterparties regarding how those funds should be allocated. Declining to pursue refunds may generate concerns regarding corporate stewardship and the preservation of value.

As a result, businesses should view IEEPA refunds not merely as a customs issue, but as a broader legal, commercial, financial, and reputational issue. The companies best positioned to navigate this next phase will be those that evaluate refund-related decisions holistically, considering not only what they are legally entitled to receive, but also how those decisions may be viewed by the various stakeholders affected by the original tariff costs.

What Companies Should Be Doing Now

Companies expecting substantial IEEPA refunds should consider undertaking a proactive review of their contractual and commercial arrangements before refunds are received.

Areas warranting particular attention include:

• Tariff pass-through provisions.
• Price-adjustment mechanisms.
• Change-in-law clauses.
• Reimbursement obligations.
• Indemnification provisions.
• Settlement agreements.
• Customer communications regarding tariffs.
• Public statements concerning pricing decisions.
• Internal analyses regarding tariff cost allocation.

Companies should also consider preserving documentation demonstrating how tariff costs were allocated throughout the supply chain and whether those costs were ultimately absorbed, shared, or passed through to other parties.

Organizations that wait until a demand letter arrives may find themselves reconstructing decisions that were made years earlier under very different business conditions.

*          *          *

The litigation surrounding IEEPA tariffs continues to evolve. The initial disputes focused on whether the tariffs were lawful and whether importers would ultimately be entitled to refunds. More recent proceedings have focused on the mechanics of obtaining those refunds, including the scope of CBP’s refund obligations and the procedures for returning unlawfully collected duties.

As those issues move closer to resolution, attention is increasingly shifting to a different set of questions. For many companies, the most significant remaining disputes may no longer involve the government at all. Instead, they may involve customers, suppliers, distributors, shareholders, bankruptcy stakeholders, and other private parties asserting competing claims to the resulting recoveries.

The fact that a refund is paid to the importer of record does not necessarily resolve who ultimately bears the economic benefits or burdens associated with that refund. Those questions may depend on contractual arrangements, tariff pass-through provisions, pricing decisions, commercial communications, and the specific manner in which tariff costs were allocated throughout the supply chain.

As a result, companies receiving substantial IEEPA refunds should view those recoveries not simply as customs matters, but as potential sources of broader legal, commercial, financial, and reputational risk. Organizations that proactively evaluate these issues before refunds are received will generally be better positioned to manage the disputes and stakeholder expectations that may follow.

The principal legal question surrounding IEEPA tariffs was once whether refunds would be paid. Increasingly, the more important question may be who ultimately has the right to keep them.

In 2022, Foley’s Government Enforcement Defense & Investigations International Team first produced a set of interactive international compliance heat maps designed to provide an at-a-glance resource for identifying countries around the world that may present heightened bribery, sanctions, or human rights compliance risks for multinational companies that conduct business in, trade with, or source materials from them.

The maps have been updated in 2024 and again in 2026, with the underlying risk ratings reviewed and revised to reflect relevant legal, regulatory, enforcement, and geopolitical developments. The updated 2026 maps are available below.

Although the maps use a structured methodology to compare risk across jurisdictions, the ratings necessarily involve professional judgment and should be understood as relative risk indicators rather than definitive country assessments. Additional information regarding the methodology is available on request.

Bribery/Corruption Risk Heat Map

This map reflects Foley’s assessment of bribery and corruption risk presented by conducting business in various countries around the world. Countries in maroon are viewed as highest risk; countries in red as high risk; countries in orange as medium/high risk; countries in yellow as medium risk; countries in light blue as low risk; and countries in dark blue as lowest risk. Companies should tailor their compliance programs and control procedures based in part on the perceived risk of bribery and corruption presented in their respective countries of operation, taking into consideration the types of business activities occurring in those countries and the degree of interaction with government officials.

Contacts: David Simon, Olivia Singelmann, John Turlais, and Nick Covek

U.S. Sanctions Risk Heat Map

This map reflects Foley’s assessment of U.S. economic sanctions risk presented by conducting business in various countries around the word. Countries in maroon are comprehensively sanctioned, and potential transactions involving these countries should not proceed without thorough legal review and authorization given the extremely high risk of violating U.S. sanctions; countries in red are deemed high risk due to significant list-based sanctions; countries in orange present moderate risk due to some list-based sanctions, coupled with a relatively high diversion risk; countries in yellow are subject to limited list-based sanctions but present some risk due to a moderate diversion risk; and countries in blue are not sanctioned and present a low diversion risk. Companies should implement screening procedures of relevant parties that take into consideration the countries associated with the transaction and with the relevant parties.

Contacts: Gregory Husisian and John Turlais

Forced Labor/Child Labor Risk Heat Map

This map reflects Foley’s assessment of the pervasiveness of child/forced labor used to produce goods in various countries around the world. Countries in maroon are perceived as having the highest incident rates of products made using child/forced labor; countries in red have high incident rates; countries in orange have medium/high incident rates; countries in yellow have medium incident rates; countries in light blue have low incident rates; and countries in dark blue have the lowest incident rates. Companies should tailor their supply-chain due diligence and monitoring procedures to account for the pervasiveness of child/forced labor in the countries from which they source raw materials and other goods.

Contacts: David Simon, John Turlais, and Nick Covek

If you have questions or concerns concerning this article, please feel free to reach out to any of the authors or your ·¬ÇŃÉçÇř; Lardner attorney.  for our email list to receive future biweekly emails and practical international regulatory compliance tips.

For several months, the U.S. government has been signaling an impending challenge of the Court of International Trade’s (CIT) authority to require refunds of IEEPA tariff payments (i.e., payment refunds for tariffs enacted pursuant to the International Emergency Economic Powers Act) for entries liquidated more than 80 days earlier. Now, the hanging sword has dropped. In recent filings in the CIT and in its appeal to the Court of Appeals for the Federal Circuit (CAFC), the government has stated its intent to argue that Judge Eaton’s refund orders cannot require the return of finally liquidated IEEPA tariff payments except, at most, for plaintiffs that filed protective actions under 28 U.S.C. § 1581(i).

An updated version of this article was published as What Every Multinational Should Know About … The Government’s IEEPA Federal Circuit Appeal on June 18, 2026.

That position creates material uncertainty for importers whose entries are not covered by Phase 1 of Custom and Border Protection’s (CBP) Consolidated Administration and Processing of Entries (CAPE) refund program. Most immediately, the dispute concerns “finally liquidated” entries — i.e., entries liquidated for more than 90 days (80 days under CAPE, which includes a ten-day buffer period). These entries may account for an estimated $30 billion or more in unlawfully collected IEEPA tariff payments. But the concern is broader. Other categories of entries that fall outside CAPE Phase 1, including reconciliation entries and entries involving antidumping or countervailing duty (AD/CVD) issues, also may face delayed, uncertain, or contested refund treatment, depending on how the planned Phase 2 plays out.

The practical consequence is straightforward: importers that have not filed Section 1581(i) protective actions may be at risk of losing, delaying, or complicating their ability to recover certain IEEPA tariff refunds. That risk is most obvious for finally liquidated entries, but it may also extend to other categories outside CAPE Phase 1 if the timing of refunds remains unclear or if those categories become caught up in the government’s broader appellate arguments over the scope of relief available to non-parties. More than 3,000 companies have already filed such actions, but many importers, customs brokers, and individual importers have not. For companies with a meaningful volume of entries that are more than 80 days past liquidation — or with substantial reconciliation or AD/CVD-affected entries — now is the time to seriously consider filing a protective action to preserve refund rights and potentially position themselves to seek earlier relief.

The government’s appeal will likely prolong uncertainty while the CAFC, and potentially the U.S. Supreme Court, consider the scope of the CIT’s refund authority. In the meantime, the liquidation clock continues to run, the number of finally liquidated entries grows by the day, and categories of entries outside CAPE Phase 1 remain in limbo. Accordingly, importers should promptly evaluate whether they need to take affirmative steps to protect their rights, including filing a Section 1581(i) protective action at the CIT if they have not already done so.

The Stage Is Set: What Happened at the CIT in March and April 2026?

On March 27, 2026, following the Supreme Court’s decision in Learning Resources v. United States, 607 U.S. __ (2026), the CIT ordered the government to refund all IEEPA tariff payments, including those for finally liquidated entries — i.e., entries liquidated for more than 90 days. The order was first entered in Atmus Filtration v. United States, Case No. 26-1259. After the plaintiff in Atmus withdrew its complaint, the CIT on April 7 entered a materially similar refund order in Euro-Notions Florida v. United States, Case No. 25-595. This transfer of the order to a new case pushed back the 60-day window for the Department of Justice (DOJ) to appeal and may have materially increased the number of “finally liquidated” entries (those beyond 90 days from entry) as a result.

The CIT partially stayed compliance with that order and instead required the government to provide weekly closed-door status updates on its refund efforts. During those conferences, the government described the development of its CAPE refund system, which appeared designed to process refunds for unliquidated entries and entries liquidated for 80 days or less (entries that had not hit the 90-day post-liquidation mark, taking into account a ten-day buffer period). The government did not explain how it would handle entries liquidated for more than 80 days.

On April 17, Judge Eaton entered similar refund orders, along with similar partial stays, in three additional cases: V.O.S. Selections v. United States, Case No. 25-66; AGS Company Automotive Solutions v. United States, Case No. 25-255; and Grant & Bowman v. United States, Case No. 25-689. Those four cases became the lead matters for ongoing refund-related proceedings.

The Play Reaches the Crisis Point: What Happened at the CIT in May and June 2026?

In late May 2026, Judge Eaton signaled increasing concern with the pace and scope of the government’s compliance. On May 27, in V.O.S. Selections, Judge Eaton ordered briefing on whether the stay should be lifted and whether the government should be required to comply immediately with the refund order. He also directed CBP Commissioner Rodney S. Scott to appear at a June 9 hearing to address the timing of CBP’s compliance. In Euro-Notions, Judge Eaton separately required another CAPE status report and scheduled a June 11 conference.

On May 29, the government asked the CIT to excuse Commissioner Scott’s appearance and allow lower-ranking officials to appear instead. The CIT denied that request. More importantly, in that briefing, the government made explicit what it had previously only implied: it intended to appeal the CIT’s refund orders on the ground that they amounted to an impermissible universal injunction because they ordered relief for both parties and non-parties that had not filed protective Section 1581(i) actions. The government further stated that, as to finally liquidated entries, it would seek a stay of the refund orders except for the named plaintiffs in the cases before the court.

On June 3, the government filed notices of appeal in the Federal Circuit in V.O.S. Selections, Euro-Notions, AGS Company, and Grant & Bowman, and moved to consolidate those appeals. The government also separately appealed the order requiring Commissioner Scott to appear, and the Federal Circuit promptly stayed that order, leading Judge Eaton to modify the order to permit other CBP representatives to appear instead.

Meanwhile, on June 4, the parties in V.O.S. Selections briefed whether the stay of compliance should remain in place. The government again argued that the refund orders were impermissibly universal, while plaintiffs disagreed but acknowledged that immediate full compliance was not necessary while the appeal is pending. Also on June 4, Terry Precision Cycling, a plaintiff in another Section 1581(i) case, moved in V.O.S. Selections to certify a class of importers with IEEPA tariff refund claims not currently eligible for processing through CAPE, taking advantage of an exception to the universal injunction rule that allows for class actions with universal application to a class of plaintiffs. The government’s response is due June 25, 2026.

At the June 9 hearing, a CBP representative testified that CAPE Phase 3 entries — a category of entries including finally liquidated entries — will start being processed for refunds. The CBP representative repeated the government’s earlier argument that such entries could only be processed for importers that have filed Section 1581(i) actions before the CIT. The representative also stated that CAPE Phase 2 entries — a category of entries including reconciliation entries and entries involving AD/CVD issues — will launch on June 29.

The Ending of the Play Is Unknown: Action Moves to the Federal Circuit

It is not clear how the Federal Circuit will resolve the government’s appeal of the CIT’s refund orders. Based on its recent submissions, the government likely will rely heavily on the Supreme Court’s decision in Trump v. CASA, 606 U.S. 831 (2025), arguing that Judge Eaton’s orders operate as impermissible universal injunctions by requiring relief for importers beyond the named plaintiffs before the court. The government will likely also argue that it is complying with the CIT’s orders to the extent administratively feasible through CAPE and that any importer seeking refunds for finally liquidated entries has an adequate path to relief by filing its own Section 1581(i) action.

Plaintiffs, by contrast, are likely to argue that CASA does not control. The CIT is not an ordinary district court, and its statutory jurisdiction over customs matters is uniquely tied to the administration of a uniform tariff regime. From that perspective, an order requiring CBP to refund unlawfully collected tariffs on a uniform basis is not an improper extension of relief to strangers to the case but a necessary consequence of the court’s role in supervising the lawful administration of customs duties. Plaintiffs are also likely to argue that limiting refunds for finally liquidated entries to importers that filed protective Section 1581(i) actions would undermine the constitutional and statutory requirement of uniformity in customs duties by allowing the government to retain unlawful tariff payments from some importers while refunding identical payments to others.

There also is room for Plaintiffs to argue that the statutory provisions blocking refunds of “finally liquidated” entries are not applicable at all. The entire Customs and tariff statutory structure is premised on the presumption that the tariffs collected were lawful, with the statute then setting 90 days after liquidation as the date that liquidation becomes final for these lawful tariffs. Here, however, the Supreme Court has stated that the IEEPA tariffs were unlawful from the start. There accordingly is room to argue that any rules regarding the finality of liquidation are moot in this particular context. Or, to put it another way, in case there is any tension between the Supreme Court’s ruling and the statute when it comes to refunds, the Supreme Court decision trumps the statute, not the other way around.

An additional distinction that may prove important is that this case does not present the usual concern animating objections to nationwide or universal injunctions. In the ordinary case, the objection is that a single trial court is effectively making policy for the entire country before the merits have been finally settled. Here, by contrast, the merits have already been resolved by the Supreme Court: the IEEPA tariffs were unlawful. The question is therefore not whether relief should be granted in the first instance, but whether the CIT may require the government to implement that merits determination on a uniform basis. That posture may make this case materially different from the paradigm case addressed in CASA.

Even if plaintiffs ultimately have the better legal argument, however, the government’s appeal introduces real uncertainty — and potentially significant delays — for importers that have not already filed Section 1581(i) protective actions. Although our view is that plaintiffs ultimately have the stronger legal argument, there is no question that the filing of the appeal divides the world of IEEPA tariff refunds that fall outside of Phase 1 into two categories: the IEEPA tariff refund “haves” (those that have filed protective Section 1581(i) actions at the CIT) and the “have-nots” (those that have not filed such actions). Ongoing litigation could lead to material delays and other administrative hurdles for importers that have not filed Section 1581(i) actions in the CIT and, perhaps, an inability to claim refunds of finally liquidated or other non-Phase 1 entries.

Why Is the Set of Finally Liquidated IEEPA Tariff Entries Important?

In some respects, the government has moved surprisingly quickly to implement refunds. It has represented that more than $95 billion of the approximately $166 billion in IEEPA tariff payments has already been queued for refund through the CAPE system. CBP has stated that, by the end of June, more than $40 billion should actually have been paid out. For many importers, significant money in the bank is significant and welcome progress.

The problem is that the category of entries the government is now contesting is still very large — potentially more than $30 billion. That category consists of entries that were liquidated more than 80 days ago and are therefore “finally liquidated” under the government’s current view of CAPE Phase 1.

At first glance, that category might appear relatively narrow. CBP often liquidates entries within approximately 314 days after importation. Because the earliest IEEPA tariffs took effect on February 4, 2025, one might assume that only a limited set of early 2025 entries could have become finally liquidated by the time the Supreme Court struck down the tariffs in late February 2026.

In practice, however, CBP frequently liquidates entries much sooner than 314 days after importation. In some cases — particularly lower-value or informal entries — liquidation may occur automatically and on a faster timetable. The filing of post-summary corrections also can result in earlier liquidation. As a result, for many importers, the universe of entries that may already be more than 80 days past liquidation is much broader than it first appears.

That is why the dispute matters so much. For importers with significant volumes of lower-value or quickly liquidated entries, the amount at stake may be considerable, and the risk is not limited to a small pool of early-2025 imports.

Bottom Line: What Should Importers Do Now to Best Preserve IEEPA Tariff Refund Opportunities?

The government’s position is now established: there may never be a CAPE Phase 2, or, if there is, it may not ever cover all remaining (non-Phase 1) entries. Although CBP has made meaningful progress in processing refunds for entries within CAPE Phase 1, CBP will align with the position of the DOJ that importers that have not filed protective actions under 28 U.S.C. § 1581(i) should wait, perhaps forever, for certain categories of IEEPA tariff refunds.

For that reason, the most prudent course for importers that want to maximize and preserve their refund rights is twofold: first, continue pursuing refunds through the government’s CAPE process; and second, seriously consider filing a protective Section 1581(i) action in the CIT. CAPE may well deliver refunds for many entries, but a Section 1581(i) action remains the best available tool for preserving an importer’s independent right to seek recovery if the government continues to resist broader relief for finally liquidated entries or other categories outside CAPE Phase 1.

This calculus also extends to other categories of entries that do not appear to be included in CAPE Phase 1, most notably reconciliation entries (which are subject to planned coverage in CAPE Phase 2) and entries involving AD/CVD issues. The timing for refunds of those entries remains uncertain, and there is at least some possibility that disputes over those categories could become wrapped into the government’s broader appellate arguments about the scope of relief available to non-parties. For importers with significant volumes of reconciliation entries or AD/CVD-affected entries, there may therefore be an additional advantage to filing a protective Section 1581(i) action: parties before the CIT may be better positioned to seek earlier or more targeted relief for those entries, while non-parties may be forced to wait and see how the litigation develops.

This is especially important for importers that have a meaningful number of entries liquidated more than 80 days ago, importers with large volumes of lower-value entries that may have liquidated quickly, and importers with entries subject to reconciliation or AD/CVD complications. For those companies, the downside of inaction may be significant: absent a protective filing, the importer could find itself dependent on the outcome of appellate litigation over the scope of the CIT’s authority, with no guarantee that refunds for all affected entries will be preserved.

A protective Section 1581(i) filing does not require an importer to abandon CAPE or to assume that litigation will ultimately be necessary on every entry. Rather, it serves as an insurance policy. It preserves the importer’s own claim to relief while the courts sort out whether the government can lawfully withhold refunds from non-parties for finally liquidated or otherwise excluded entries. In the current environment, where the government has appealed and is expressly challenging the availability of broader relief, that protection may prove critical.

If you would like more information about potentially filing a Section 1581(i) protective filing, please reach out to the authors or your Foley relationship attorney.

As an accompaniment to our biweekly series on What Every Multinational Should Know About various international trade, enforcement, and compliance topics, below find an update to our “Five Compliance Best Practices” series, which provides quick-hit advice on how organizations (particularly multinational companies) can implement compliance best practices to enhance their compliance programs and internal controls.

Customs valuation is the process of determining the customs value of imported goods for the purpose of assessing duties and taxes. It is essential to get the valuation correct, as in most cases the amount of tariffs due are calculated as a percentage of the declared entered value. Five common issues you should evaluate to ensure correct evaluation include:

• Ensure Your Company Is Correctly Valuing Imports. The primary method for customs valuation is the transaction value method, which uses the actual price paid or payable for the imported goods when sold for export to the country of importation. You should ensure your entries are correctly valued, including that the transaction value is correctly picking up all necessary adjustments from the purchase price, including mandatory adjustments for elements such as commissions, royalties, assists, and certain packing costs.
• Ensure You Are Accurately Tracking Assists, Indirect Costs, and Royalties. Customs valuation includes the value of any assists (production aids, such as tools, dies, and molds) provided by the buyer to the seller or the value of royalties paid by the buyer to the seller as part of the transaction value. These elements must be included in the customs value of imported goods. Many importers forget about these elements because they do not appear on the commercial invoice. You should check to see that these off-invoice elements are being tracked and correctly apportioned to impacted entries.
• Ensure Your Purchasing Team and Other Relevant Import Stakeholders Properly Understand Incoterms. To correctly calculate the entered value, it is important to understand how Incoterms influence the entered value and which adjustments need to occur to calculate it. As an aid to correct valuation and unexpected tariff surprises, it is a compliance best practice to pick and use a consistent Incoterm, such as free on board (FOB) or cost, insurance, and freight (CIF).
• Ensure You Have a Customs Transfer Pricing Study for Related-Party Transactions. When the buyer and seller are related parties, customs authorities may examine the transaction value to ensure that it reflects a bona fide sale under normal commercial conditions. This generally requires that companies that frequently import from related parties have a Customs transfer price study in place to validate the arms-length nature of their related-party pricing. Because Customs and the IRS use different methodologies, it is not permissible to rely on an IRS transfer pricing study to validate related-party pricing for Customs purposes.
• Ensure Your Transfer Pricing Study is Consistently Followed. In addition to having a Customs transfer pricing policy in place, it is important to analyze its conclusions and apply any required adjustments consistently when determining entered value, across all related-party imports.

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On May 18, 2026, a jury in the Central District of California convicted Dr. Violetta Mailyan of orchestrating to defraud Medicare through fraudulent Botox injection claims. While the fraud itself was bold enough, what makes this case a bellwether is how the government caught her.

The Department of Justice’s (DOJ) Health Care Fraud Section’s Data Analytics Team flagged Mailyan after its analysis showed she collected more Medicare payments for Botox injections than any other doctor in the country. At trial, prosecutors drove the point home with a peer comparison exhibit — a graph showing Mailyan as an extreme statistical outlier who raked in more than $24 million over four years, which was six times more than the next highest group of providers. The visual is striking, intuitive, and devastating. It reduced a complex fraud scheme to a single, irrefutable data point: this doctor is not like others:

The Mailyan case is not an isolated success story. It is the most recent illustration of a fundamental shift in how the federal government detects and prosecutes health care fraud — a shift from reactive investigation to proactive, data-driven identification of fraudulent actors.

The Rise of the Data Analytics Team

The DOJ’s Health Care Fraud Unit’s Data Analytics Team was established to enhance the Unit’s ability to detect, investigate, and prosecute complex health care fraud schemes. Since its founding, the team has grown in both capacity and ambition. According to the DOJ’s 2025 Year in Review, the Data Analytics Team completed 2,085 data requests and 164 proactive data referrals in 2025 alone — referrals that aided charging decisions, resolution of significant matters, and asset seizures.[1]

The term “proactive referral” is the key phrase. Traditional health care fraud enforcement has long followed a “pay and chase” model — the government pays claims, receives a tip or complaint, investigates after the fact, and then attempts to recover funds that have often already been dissipated. Proactive data referrals work to invert this paradigm. The Data Analytics Team identifies statistical anomalies, billing outliers, and suspicious patterns in claims data before a complaint is filed and, in some cases, before the money even goes out the door.

The Mailyan case is a textbook example. Nobody filed a whistleblower complaint. No disgruntled employee called a tip line. The data itself raised the alarm.

What This Means for Health Care Providers

The practical implications for health care providers are significant. The DOJ is no longer primarily dependent on whistleblowers, patient complaints, or traditional investigative leads to initiate cases. The government is actively mining Medicare and Medicaid claims data to identify outliers — and it is doing so continuously.

The Mailyan trial exhibit, a peer comparison graph showing the defendant multiple standard deviations from her peers, is a preview of what juries will see in future cases. It is simple, visual, and powerful. A provider who is a dramatic statistical outlier will face the immediate inference that something is wrong, and the burden of explaining away that data will fall squarely on the defense.

For compliance purposes, providers should assume that their billing data is being analyzed and compared against their peers at all times. Internal compliance programs should incorporate the same types of analytics the government is using — peer comparisons, outlier detection, and trend analysis — to identify and remediate potential issues before the government comes calling. As the DOJ’s enforcement record makes clear, it is far better to be the one who finds the anomaly first.

Conclusion

The conviction of Dr. Mailyan is a milestone not because of the fraud itself but because of what it represents about the future of health care fraud enforcement. The government found this case not through a tip, not through a whistleblower, but through data. And it proved the case at trial not primarily through cooperators or paper trails, but through a graph showing that the defendant’s billing was so far from the norm as to be inexplicable by any legitimate practice.

As the DOJ continues to invest in its Data Analytics Team and AI-powered detection capabilities, providers should expect that the era of “pay and chase” is giving way to an era of “detect and prevent”. The peer comparison chart in the Mailyan trial may prove to be one of the most consequential trial exhibits in recent health care fraud enforcement — not for what it showed about one doctor but for what it signals about how the government intends to find and prosecute the next one.

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On May 27, 2026, the Assistant Attorney General in charge of the Department of Justice’s (DOJ) Civil Division, Brett Shumate, that civil lawyers within the DOJ and U.S. Attorney’s Offices will need to fast-track and prioritize sealed False Claims Act (FCA) qui tam cases involving fraud against federally funded state administered benefits programs. According to the DOJ’s announcement, the Civil Division intends to evaluate these sealed matters within 60 days where possible, and no later than 120 days, pursuant to a March 2026 executive-order-driven enforcement initiative. This directive will require the DOJ’s civil lawyers to issue subpoenas, review records, and conduct interviews in an unusually compressed timetable.

This development has immediate consequences for recipients of Civil Investigative Demands (CIDs). For these state-based benefit matters, this directive will require companies and other entities that receive CIDs for documents, interrogatory responses, or testimony to mobilize quickly, preserve relevant information immediately, and make early strategic decisions about response scope and privilege. Extended deadline continuances may become harder to obtain if the DOJ is operating under internal review clocks tied to sealed-case decision points.

This accelerated decision schedule will necessarily shift the burden of litigation to relators and their lawyers requiring them to handle the resulting litigation with a minimal burden on the government. That reality makes the pre-intervention phase more consequential: presentations to the DOJ during the CID and seal period may now have an even greater impact on whether the government intervenes, narrows its theories, or declines the case altogether.

The DOJ’s leadership emphasized in the memorandum that a “whole-of-government” approach would apply: the DOJ will coordinate quickly with criminal prosecutors, fraud enforcement units, and affected agencies to evaluate criminal, civil, and administrative remedies, including payment suspensions and program-specific analysis. Overall, the goal is to accelerate meritorious benefits fraud cases and focus government resources on the most serious and complex schemes.

It will be essential for companies and individuals who receive these CIDs to retain counsel and start collecting the responsive records immediately upon receipt.

Practical Implications for Providers, Contractors, and Managed-Care Participants

Organizations participating in Medicaid, Medi-Cal and other state-administered benefit programs should expect faster information demands and less tolerance for slow internal collection efforts once a CID or related inquiry arrives. Entities that rely on decentralized claims, eligibility, utilization-management, pharmacy, or subcontractor data may face greater challenges because the government’s timeline will not pause while records are gathered across business units.

Three practical implications stand out:

• Preservation and collection must begin immediately. Legal, compliance, and business teams should identify custodians, systems, and third-party data sources at the outset rather than waiting for rolling negotiations over scope.
• Early case assessment becomes more important. Counsel should quickly test the factual theory, reimbursement pathway, damages assumptions, and any materiality arguments before the DOJ reaches an intervention decision.
• Parallel-enforcement planning should occur on day one. Because the DOJ has signaled closer coordination across enforcement channels, responses should account for potential criminal, administrative, suspension, and overpayment ramifications at the same time.

Given the importance of FCA matters to the healthcare industry, in-house counsel at such organizations should be extra attentive when CIDs arrive regarding Medicaid and Medi-Cal in light of these new, compressed deadlines. 

The U.S. government has fundamentally changed how Section 232 tariffs apply to steel, aluminum, and certain derivative products, replacing a content-based tariff methodology with a far broader entered-value approach that could significantly increase duty exposure for many importers.

Beginning June 2025, importers of certain steel and aluminum derivative products were required to calculate Section 232 duties based on the value of the “steel content” or “aluminum content” contained in the imported article. While conceptually straightforward, importers faced substantial uncertainty regarding how to calculate content values, allocate mixed-material costs, document sourcing information, and defend those calculations to U.S. Customs and Border Protection (CBP).

The Trump administration now has replaced that methodology with a new Section 232 metals tariff framework. Section 232 duties now generally apply to the full entered value of the imported product, with the applicable tariff rate determined by the product’s HTS classification and the corresponding Section 232 tariff category assigned to that product. To approximate the metal content, different HTS numbers subject to the Section 232 duties have differing tiered tariff rates.

This shift has significant implications for multinational companies. Although the revised methodology simplifies administration, it often materially increases Section 232 duty liability because lowered Section tariff rates can be more than offset by the fact that the Section 232 tariffs now generally apply to the entire entered value of the imported article rather than only its underlying metal content. The new framework also places even greater importance on accurate tariff classification, product scoping, landed-cost modeling, supplier documentation, and broader Customs compliance processes.

This article examines the revised Section 232 framework, explains how the new tariff structure operates in practice, and highlights the key compliance and risk-management considerations multinational companies should be evaluating now to cope with the new Section 232 metal tariff rules.

How We Got Here

The current revisions to the Section 232 framework are best understood against the backdrop of the government’s broader effort to expand steel and aluminum tariffs into downstream products. When Section 232 tariffs were first imposed, they focused on primary forms of steel and aluminum, gradually expanding to cover a growing list of derivative products that contain substantial amounts of metal content.

When many of these steel and aluminum derivative products were added in June and August of 2025, the Section 232 duties applied only to the steel or aluminum portion of the imported good. Conceptually, the approach aligned with the national security rationale underlying Section 232 by focusing on the steel or aluminum content. In practice, however, the methodology proved difficult to administer, partially because CBP provided only limited formal direction but mostly because the approach was unworkable. Although CBP stated in a Section 232 FAQ that importers should rely on “the invoice paid by the buyer of the steel or aluminum content,” this information often was not available to the importer of record and potentially not even known to foreign manufacturers, which often purchase steel inventory from a variety of sources.

As a result, importers were left with difficult judgment calls regarding which data sources to rely upon, including mill invoices, supplier invoices, transfer-pricing information, cost-accounting records, or other internal allocation methodologies. At the same time, importers were attempting to reconcile these approaches with existing Customs valuation principles and ensure consistency across products, suppliers, and entry filings. This increased compliance burden required extensive coordination among procurement, finance, logistics, engineering, and trade compliance personnel to identify, calculate, document, and support declared metal-content values. The combination of ambiguity, administrative complexity, and heightened enforcement exposure created growing pressure for a more predictable and administrable system.

In April 2026, the administration responded by fundamentally revising how Section 232 metal tariffs apply to derivative products. The revised framework abandons the requirement to calculate the value of steel or aluminum content and instead adopts a classification-based methodology that applies Section 232 duties to the full entered value of the imported product, with the applicable tariff rate determined by the product’s HTS classification and relevant Section 232 tariff category.

The shift reflects a policy judgment that a simpler and more uniform framework, even if less precise in targeting the actual metal content of a product, will prove more administrable. The revised approach, however, often imposes significantly higher tariffs, as detailed below.

How Section 232 Duties Now Will Be Calculated

The revised structure was established through the April 2, 2026, Presidential Proclamation and its associated annexes. Effective for goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on April 6, 2026, Section 232 duties apply to the full customs value of covered steel, aluminum, copper, and derivative articles, regardless of the actual value of the embedded metal content. The revised Section 232 framework replaces the former complex content-based valuation exercise with a more standardized, classification-driven tariff methodology. Rather than requiring importers to isolate, calculate, and substantiate the value of steel or aluminum inputs embedded within imported merchandise, the revised system generally applies Section 232 duties to the full entered value of the imported product. The applicable tariff rate is then determined based on the product’s HTS classification, which effectively serves as a proxy for the extent to which the product is composed of steel, aluminum, or copper.

In practical terms, the government has shifted away from attempting to measure the actual value of embedded metal content and instead adopted a tariff structure that ties duty exposure directly to tariff classification. Products classified in HTS provisions associated with primary metal goods or products consisting predominantly of steel, aluminum, or copper are subject to higher Section 232 rates. By contrast, downstream derivative products that merely incorporate covered metals as one component among many generally receive lower rates. The result is a tiered tariff framework in which HTS classification now plays the central role in determining Section 232 liability.

The new Section 232 metals tariffs framework generally operates as follows:

• 50% Duty on Full Customs Value – Annex I-A. Annex I-A applies a 50% Section 232 duty to the full customs value of covered aluminum and steel articles, most copper articles, and certain steel and aluminum derivative products. This category generally includes products made entirely or almost entirely of the covered metal, including many Chapter 72 steel products, certain Chapter 73 steel articles, Chapter 76 aluminum products, and Chapter 74 copper products.
• 25% Duty on Full Customs Value – Annex I-B. Annex I-B applies a 25% Section 232 duty to certain copper articles and derivative steel and aluminum products that remain within the Section 232 derivative regime but are not treated as predominantly metal articles. These products typically incorporate covered metals as one component within a broader manufactured good.
• Temporary 15% Treatment – Annex III. Certain steel and aluminum derivative products identified in Annex III receive temporary reduced treatment through December 31, 2027, meaning that the Section 232 duty is reduced so the combined ordinary Column 1 duty rate plus the Section 232 duty equals 15%. If the applicable Column 1 duty rate is already 15% or greater, no additional Section 232 duty applies under this temporary framework.
• 10% Rate for Qualifying U.S.-Origin Metal Inputs. Covered products manufactured abroad using qualifying U.S.-origin metal inputs may qualify for a reduced 10% Section 232 rate. For steel products, this generally requires that the steel be U.S. melted and poured. For aluminum and copper products, the applicable standard generally requires U.S. smelted-and-cast metal.
• Special Reduced Rates for Certain U.K. Products. Certain qualifying U.K.-origin steel and aluminum products receive reduced Section 232 rates pursuant to the applicable U.S.-U.K. arrangements. Products otherwise subject to the 50% Annex I-A rate may qualify for a reduced 25% rate, while products otherwise subject to the 25% Annex I-B rate may qualify for a reduced 15% rate, provided the applicable U.K. melt-and-pour or smelt-and-cast requirements are satisfied.
• Low Metal Content Exception. Products listed in the annexes, other than goods classified in HTSUS Chapters 72, 73, 74, or 76, are generally excluded from the revised Section 232 duties if they contain less than 15% aggregate weight of the applicable covered metal or metals. CBP has also confirmed that products listed in the annexes but containing no steel, aluminum, or copper are not subject to the duties.
• No “Metals-on-Metals” Stacking. Where a product qualifies as an article or derivative of more than one covered metal, only one Section 232 metals duty applies. CBP has expressly confirmed that Section 232 duties do not stack where products contain combinations of aluminum and steel, aluminum and copper, steel and copper, or all three metals.

Although the revised framework eliminates the need to calculate the value of embedded metal content, product composition remains highly relevant in several important respects. Most notably, the low-metal-content exception continues to require importers to substantiate the percentage by weight of steel, aluminum, or copper contained in covered products. Accordingly, companies claiming eligibility for these exceptions should expect to maintain supporting engineering data, bills of materials, technical specifications, supplier certifications, testing data, or other records sufficient to substantiate the composition and weight of their products.

From an operational standpoint, the revised framework significantly changes where compliance risks arise. Under the prior regime, enforcement disputes frequently centered on how importers calculated the value of steel or aluminum inputs. Under the new system, CBP scrutiny is likely to focus far more heavily on HTS classification decisions, particularly where multiple classifications may reasonably apply or where classification outcomes materially affect Section 232 duty exposure. Importers should also expect increased attention to documentation supporting exceptions and reduced-rate claims, including evidence relating to product composition, weight percentages, and qualifying U.S.-origin metal inputs.

What Importer Should Be Doing Now

Importers should treat the April 2026 revisions as a trigger for a fresh and comprehensive Section 232 review. The revised framework simplifies one important aspect of compliance because companies no longer need to calculate the value of embedded steel or aluminum content. At the same time, however, the revisions fundamentally change the duty base, alter the applicable tariff rates, and place significantly greater emphasis on HTS classification, product composition, sourcing, origin substantiation, and documentation controls.

In light of these changes, importers should consider the following steps:

• Map all imported products against the new annexes. Companies should confirm whether imported products fall within Annex I-A, I-B, II, III, or IV and should not assume that prior Section 232 treatment remains unchanged. CBP guidance states that the revised duties apply to the full customs value of covered steel, aluminum, copper articles, and derivative products effective April 6, 2026.
• Reconfirm HTS classifications. Because the revised framework uses HTS classification to determine the applicable Section 232 rate, classification decisions now directly determine whether a product is subject to 50%, 25%, 15%, 10%, or no Section 232 duty. Companies should pay particular attention to products where multiple classifications may plausibly apply or where classification outcomes materially affect duty exposure.
• Implement heightened classification governance controls. Importers should consider enhanced internal review procedures for high-risk classifications, including escalation protocols for borderline classifications, periodic audits of classification decisions, and greater coordination among engineering, procurement, legal, and trade compliance teams. The revised framework significantly increases the commercial importance of classification accuracy.
• Model the new landed-cost impact. For many derivative products, Section 232 duties now apply to the full customs value of the imported merchandise rather than only the value of the embedded metal content. This change may materially increase tariff exposure for high-value finished goods containing relatively modest amounts of steel, aluminum, or copper.
• Reevaluate sourcing and supply-chain strategies. Becausethe revised framework substantially changes Section 232 duty exposure, companies should reassess sourcing arrangements, supplier locations, manufacturing footprints, and product-design decisions that may have been developed under the prior content-based methodology. In some cases, the revised framework may alter the relative cost advantages associated with particular sourcing strategies or manufacturing locations.
• Identify products that may qualify for the low-metal-content exception. Products listed in the annexes, other than goods classified in Chapters 72, 73, 74, or 76, may fall outside the Section 232 metals tariffs if they contain less than 15% aggregate weight of the applicable covered metal or metals. Companies should gather bills of materials, engineering specifications, testing data, supplier certifications, and weight calculations necessary to support any claimed exception.
• Confirm whether reduced rates are available. Products manufactured using qualifying U.S.-origin or U.K.-origin metal inputs may qualify for reduced Section 232 rates. Importers should confirm whether they can substantiate the applicable melt-and-pour or smelt-and-cast requirements through supplier certifications and supporting origin documentation.
• Review supplier-data collection processes. Although importers no longer need to calculate the value of embedded metal content, companies may still need supplier certifications, composition data, engineering specifications, and origin records to support reduced-rate claims, low-metal-content exceptions, and other Section 232 positions. Importers should confirm that suppliers can consistently provide the required information and that internal systems can capture and maintain it.
• Update HTS classification indexes, ERP systems, and broker instructions. Importers should ensure that brokers are using the correct HTS numbers, Chapter 99 provisions, product flags, origin indicators, and exception claims. Companies should also review whether ERP systems, tariff databases, landed-cost models, and reporting systems accurately reflect the revised Section 232 framework.
• Check for mixed-metal products. CBP has confirmed that products listed as articles or derivatives of more than one covered metal are subject to only one applicable Section 232 metals duty rate, even where the product contains steel, aluminum, and copper together. Companies should review mixed-metal products carefully to ensure the correct treatment is being applied.
• Review transition-period entries and contracts. Importers should examine entries made around the April 6, 2026, effective date, including warehouse withdrawals and in-transit merchandise, to confirm that the revised tariff framework was correctly applied. Companies should also assess whether existing purchase agreements, transfer-pricing structures, or customer contracts negotiated under the prior methodology require adjustment.
• Review FTZ and drawback treatment. Covered products admitted into foreign trade zones after the effective date generally must be entered in privileged foreign status, which may limit the ability to benefit from subsequent tariff reductions or classification changes. Companies should also evaluate whether drawback remains available for affected products and whether revised Section 232 treatment alters existing FTZ or drawback strategies.
• Establish post-entry review and correction procedures. Because HTS classification and exception claims now directly drive Section 232 exposure, importers should implement procedures to identify and correct potential entry errors through post-summary corrections (PSCs), protests, or other available mechanisms where appropriate.
• Assess enforcement exposure. The revised framework is likely to increase CBP scrutiny of HTS classification decisions, reduced-rate claims, low-metal-content exceptions, and origin documentation. Importers should expect increased use of CF-28 requests, audits, investigations, and potential penalty exposure in cases involving unsupported classifications or exception claims. Given the magnitude of the applicable duty rates, the revised framework may also increase False Claims Act and whistleblower risk.
• Build a comprehensive audit file. Even though the revised methodology is operationally simpler in certain respects, importers should maintain robust documentation supporting classification decisions, product composition analyses, origin determinations, claimed exceptions, supplier certifications, broker instructions, and reasonable-care analyses. Companies should assume that CBP may later request documentation supporting the basis for Section 232 treatment.

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The revised Section 232 framework for steel, aluminum, copper, and derivative products trades one form of complexity for another. The new system eliminates the difficult and often highly subjective exercise of calculating embedded metal-content value but replaces it with a framework in which HTS classification, product composition, origin substantiation, and supporting documentation now play the central role in determining duty exposure. For some importers, the revised approach will welcome administrative clarity and greater predictability. For others, particularly companies importing high-value finished goods that incorporate steel, aluminum, or copper as only one component among many, the application of Section 232 duties to the full entered value of the product may significantly increase tariff liability.

The revised framework also reflects a broader shift in how Section 232 compliance risk is likely to be enforced going forward. Under the prior regime, disputes frequently focused on how companies calculated and documented the value of embedded metal content. Under the new framework, CBP scrutiny is likely to focus far more heavily on HTS classification decisions, reduced-rate claims, origin documentation, low-metal-content exceptions, and the sufficiency of importer reasonable-care processes. In many respects, the revised methodology transforms Section 232 compliance from primarily a valuation exercise into a broader classification, sourcing, and supply-chain governance issue.

Companies therefore should not view the April 2026 revisions as merely another tariff-rate adjustment. The administration has effectively introduced a new operating model for Section 232 compliance. Importers that respond proactively, including by reassessing classifications, reviewing sourcing strategies, strengthening documentation controls, updating broker instructions and ERP systems, and reevaluating landed-cost assumptions, will be best positioned to manage both the commercial and enforcement risks associated with the revised framework.

As an accompaniment to our biweekly series on What Every Multinational Should Know About various international trade, enforcement, and compliance topics, below find an update to our “Five Compliance Best Practices” series, which provides quick-hit advice on how organizations (particularly multinational companies) can implement compliance best practices to enhance their compliance programs and internal controls.

Customs recordkeeping requirements are encoded in the Customs regulations and are mandatory for importers. To conduct a quick check on the adequacy of your Customs recordkeeping, consider conducting the following Five Things:

• Ensure You Have a Written Customs Recordkeeping Policy, Whether as Part of Your Customs Manual or Within the Destruction Schedule of Your Records Information Management Policy. Customs recordkeeping is not just a good idea; it is explicitly mandated by the Customs regulations. If you have not recently reviewed your recordkeeping policy, a quick review to ensure that you have one and that it is consistently followed is a good idea.
• Ensure Your Policy Covers All Required Customs Recordkeeping Requirements. Customs regulations that you maintain full information supporting the full payment of the tariff, the valuation of the goods, the country of origin, and duty/tax payments. Relevant documents include copies of such import/export documents as commercial invoices, packing lists, bills of lading, air waybills, and other data supporting the information declared on your Form 7501 Entry Summary. Among other requirements, these documents should accurately describe the goods being imported or exported, their value, quantity, origin, and other relevant details. Other documents relevant to the transaction can include records related to the transportation of goods, such as shipping contracts, freight invoices, transportation receipts, and delivery confirmations. Even emails that help set up the terms of sale may be relevant. Ensure all required elements are covered in your written recordkeeping requirements by comparing them to the Customs regulations and Customs guidance.
• Evaluate Whether You Are Maintaining Required Origination Information and Licenses/Permits. Many free trade agreements, including the U.S.-Mexico-Canada Agreement require that importers have certificates of origin on hand at the time of importation for goods benefiting from free trade preferences. You should have procedures in place to ensure that your company is maintaining copies of certificates of origin and other supporting documentation that verify the origin of imported goods. These documents may be required to qualify for preferential tariff treatment under free trade agreements or other trade programs or to respond to Customs inquiries about the same.
  
  You also should confirm that your company maintains all required importation licenses and permits. If your import patterns include goods where there are licensing or permitting requirements to allow for importation, or certificates required for the importation or exportation of specific goods, such as controlled substances, hazardous materials, or restricted items, then you should check that these documents are regularly archived and kept for the minimum required period.
• Check Whether Your Company Maintains All Required Financial Records. Customs regulations require that importers maintain certain financial transactions related to international trade, including invoices, receipts, payment records, and bank statements. These records should demonstrate the payment of duties, taxes, and other fees associated with customs clearance.
• Check that Your Company Maintains Correspondence and Communications with Customs and Other Third Parties. Your company should maintain records of all correspondence and communications with customs authorities, suppliers, freight forwarders, customs brokers, and other parties involved in international trade transactions. This includes emails, letters, faxes, and other forms of communication.

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