Customs and Border Protection opened Phase 2 of its CAPE refund process on June 29. The phase covers roughly $28.7 billion in potential IEEPA tariff refunds across about 2.8 million reconciliation entries. Timing is everything: importers must claim within a narrow eligibility window, and filing a Type 09 reconciliation too early can make an entry ineligible for the refund.
What Phase 2 covers: Phase 2 expands the refund mechanism to reconciliation (Type 09) entries. It is the second large tranche after Phase 1, which opened earlier this spring. Phase 1 already includes about $90 billion in accepted claims. About $23 billion has been sent to the Treasury, and the first ACH payments arrived last month, according to Holland & Knight’s advisory.
Together, Phases 1 and 2 cover roughly $130 billion of the $166 billion in IEEPA duties CBP has collected.
The eligibility test: Two conditions must be met for an entry to qualify, according to testimony from CBP’s trade office at the Court of International Trade. An entry is eligible only if:
It is unliquidated, or liquidated within 80 days of the filing date; and
Its Type 09 reconciliation entry has not yet been filed
The second condition is the one importers are most likely to miss. CBP’s guidance is to hold the Type 09 filing unless its deadline falls within 30 days, so the CAPE declaration processes first. If the reconciliation deadline is approaching, file the Type 09 but exclude the IEEPA duty increases.
The earliest IEEPA entries, those filed before roughly May 31, 2025 under a standard 314-day liquidation cycle, have already liquidated beyond the 80-days limit and fall outside Phase 2.
The mechanics: Declarations go through the CAPE tab in the ACE portal. Importers must also enrol separately to receive refunds by ACH or the money will be approved but not paid. More than 4,000 refunds are already blocked because ACH details are missing, according to BDO.
The appeal risk: DOJ has filed appeals at the Federal Circuit. It argues that the Court of International Trade’s universal refund orders go beyond the limits set in Trump v. CASA and that relief should apply only to the roughly 4,000 importers that sued, not all 330,000.
Phases 1 and 2 are not directly in the line of fire. Phase 3, which covers finally liquidated entries worth more than $30 billion, is where the appeal matters. CBP says it will process Phase 3 only for importers who filed Section 1581(i) actions.
KPMG’s Kelly Nelson told Supply Chain Dive that CBP’s ability to refund finally liquidated entries may now hinge on a final court order. Holland & Knight has advised importers not to treat CAPE participation and CIT litigation as competing strategies.
Importers are using the proceeds in different ways:
BJ's Wholesale: used refunds to lower prices by about half a point, creating roughly a $20 million margin benefit
e.l.f. Beauty: plans to use its $58.5 million in refunds to lower prices and drive volume
Phase 3, covering finally-liquidated entries, is targeted for late July.
