When Tariff Refunds Go to the Wrong Party

The legal challenges that have successfully invalidated tariffs levied under the International Emergency Economic Powers Act (IEEPA) have made 2026 a landmark year for American businesses seeking to recover what they overpaid. The case of Learning Resources, Inc. v. Trump sits at the center of this shift, directly confronting the question of how far executive power extends when imposing tariffs under IEEPA, and its resolution has opened a meaningful refund pathway for duties that never should have been collected.¹

Now that U.S Customs and Border Protection (CBP) has begun working through those refunds via its Automated Commercial Environment (ACE) and Consolidated Administration and Processing Entries (CAPE) processing systems, a troubling pattern has become impossible to ignore: the money is landing with Importers of Record rather than with the companies that genuinely absorbed the cost.

This disconnect is not incidental, it is simply how CBP's rules are written. Refunds go to whoever is listed as the Importer of Record on the customs entry, the party that holds formal legal responsibility for the filing. The catch is that this party is frequently not the one that paid the price. Customs brokers, freight companies, suppliers, and distributors routinely act as Importer of Record on behalf of the businesses purchasing the imported goods.

Intermediaries may handle the logistics of importing, but the financial hit from tariffs rarely stays with them. Through higher pricing, invoice markups, or contractual cost-sharing arrangements, that burden gets pushed directly onto the businesses buying the goods. So when CBP issues refunds, interest included, the company collecting the check is often the last one that should be.

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Complications Created by the Tariff Refund Process

The way tariff refunds are currently being handled gives rise to a predictable set of legal and practical problems. The first is a visibility problem. Companies that are not the Importer of Record have no independent access to ACE or CAPE filings, liquidation records, or refund status data. They are entirely dependent on their intermediaries to report what refunds have been issued and how much. That dependence makes it nearly impossible for a downstream business to confirm whether a refund was processed accurately or processed at all.

Second, it raises significant contract and equity issues. Import and brokerage agreements commonly contain provisions that spell out how customs costs are to be handled, including what happens when duties are reduced or refunded. When those agreements include pass-through language, requiring that any refunds, credits, or duty savings be forwarded to the client, an intermediary that pockets a refund instead may be in clear breach of that obligation. Courts have consistently held these kinds of provisions to their plain meaning, especially when the contract establishes that the intermediary's function was purely administrative rather than one that gave it any ownership interest in the funds.

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How Breach of Contract and Unjust Enrichment Come Into Play

Even when a contract lacks specific pass-through language, affected businesses are not without recourse. These situations frequently fall within the doctrine of unjust enrichment, a well-established area of restitution law holding that one party cannot keep a financial benefit obtained at another's expense when doing so would be fundamentally unfair.² When an Importer of Record collects a refund for duties that its client was the one to actually pay, holding onto those funds can amount to exactly that kind of impermissible windfall. Courts have shown little tolerance for intermediaries seeking to retain money in circumstances that would produce a double recovery with no grounding in the actual economic relationship between the parties.³

The question of statutory interest adds another dimension to these claims. When CBP refunds duties, it may attach interest to account for the time value of money over the period the overpayment was held. That interest is generally treated as an extension of the underlying refund; it follows whoever is legitimately entitled to the principal. Therefore, if a downstream business was the true bearer of the tariff cost, its entitlement likely extends to the associated interest as well. An Importer of Record that retains that interest without explicit contractual authority to do so may face separate and independent exposure under both breach of contract and unjust enrichment theories.

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Why Timing and Documentation Can Make or Break Your Claim

While these disputes are ultimately governed by contract and restitution principles, when you act and what records you can produce matter enormously. Import agreements frequently include notice deadlines, limitations periods, and mandatory dispute resolution procedures that can quietly extinguish a claim if not observed. Missing those windows, even unintentionally, can eliminate options that would otherwise be available.

The documentation challenge compounds the urgency. The records most critical to building a claim, CBP entry summaries, refund determinations, and internal allocation documents — are almost always in the hands of the Importer of Record, not the downstream business. The longer a company waits to assert its rights, the harder it becomes to reconstruct the financial trail and connect the refund back to the costs the client originally absorbed.

The overarching legal principle at work here is not complicated: when the government returns money that corrects a prior overpayment, that money belongs to whoever truly paid it. Courts examining these disputes will look past the administrative mechanics and ask whether an intermediary's decision to keep the refund holds up under the terms of the contract or basic principles of fairness. In case after case, breach of contract and unjust enrichment have proven to be reliable and well-worn paths to putting those funds back where they belong.

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Contact Frost Law AZ About Your Tariff Refund Options

If you believe that tariff refunds or associated interest are being withheld by an Importer of Record, prompt legal review is essential. Early evaluation of contractual obligations, refund documentation, and CPB filings can help preserve claims and ensure that recovered duties are properly remitted to the party that actually bore the cost.

Contact Frost Law AZ at (602) 649-3887 or use our contact form to schedule a confidential consultation and evaluate your tariff refund options.