___________________________________________________________

Analysis: Judge Eaton's CIT Order: What it Says — and What Happens Next

On March 4, 2026, the U.S. Court of International Trade issued one of the most consequential orders yet in the litigation over the Trump administration’s IEEPA tariffs.

Judge Richard Eaton ordered U.S. Customs and Border Protection (CBP) to liquidate affected entries without applying the IEEPA tariffs. The order potentially affects tens of millions of import entries and more than $166 billion in collected duties.

Since the order issued, several developments have clarified — but not fully resolved — how the government may respond to the ruling:

• March 4: Judge Eaton issued the original order.

• March 5: The court issued a slightly revised version of the order.

• March 6: CBP filed a sworn declaration describing the agency’s systems and operational constraints.

• Later on March 6: Judge Eaton “suspended” the March 4/5 order “to the extent that it directs immediate compliance,” in light of operational challenges detailed in the CBP declaration.

Together, these filings provide the clearest picture yet of how tariff refunds might actually occur — and the key uncertainties that remain.

1. The March 4 Order

As explained in a prior Grayhawk Law tariff litigation update, Judge Eaton’s order directs CBP to “liquidate all unliquidated entries that were entered subject to the IEEPA tariffs without applying those duties.”

The order applies nationwide, not just to the plaintiffs before the court. In practical terms, this would require CBP to liquidate affected entries as if the IEEPA tariff rate were zero percent.

That is an unusually sweeping form of relief in customs litigation. Normally, importers challenge duties through the protest process, followed by litigation if the protest is denied. The court’s order instead directs CBP to adjust liquidation outcomes across the board, potentially affecting a massive number of entries simultaneously. For reasons detailed in a prior litigation update, there is a significant chance that the government appeals and the Federal Circuit or Supreme Court reverses the order’s universal scope.

2. The March 5 Amended Order

On March 5, Judge Eaton issued a slightly revised version of the order.

The modification did not materially change the substance of the ruling. Instead, it clarified the precise scope of entries covered by the order and confirmed that CBP must liquidate affected entries without regard to the IEEPA duties.

In other words, the amended order reaffirmed the court’s central directive.

3. What CBP Revealed in Its March 6 Declaration

On March 6, CBP filed a detailed declaration describing how the agency’s systems currently process entries and why implementing the order immediately would be unrealistically burdensome.

The declaration contains several striking data points.

As of March 4, 2026:

• Over 330,000 importers had paid IEEPA duties.

• A total of 53,173,939 entries included IEEPA duties.

• The government collected approximately $166 billion in those duties.

• Approximately 20.1 million entries remain unliquidated. 

CBP also explained that its current Automated Commercial Environment (ACE) system cannot simply remove IEEPA duties across all entries automatically.

Processing refunds using existing systems would require:

• manual recalculation of duties on many entries

• processing tens of millions of refunds individually

• more than 4.4 million hours of work by CBP personnel. 

To avoid that outcome, CBP says it is working to develop new ACE functionality that could streamline the refund process.

CBP aims to build this capability within approximately 45 days. 

4. Liquidations Are Continuing in the Meantime

While CBP develops that system capability, entries are continuing to liquidate.

According to the declaration:

• Over 700,000 entries were scheduled to liquidate on March 6.

• Of those, approximately 339,000 included IEEPA duties.

• Another 333,000 entries with IEEPA duties are scheduled to liquidate on March 13. 

This implies that roughly 330,000 entries with IEEPA duties are liquidating each week.

If that pace continues, the implications are significant. Because CBP estimates it will need 45 days to implement the new ACE functionality, roughly six weeks of additional liquidations will occur in the meantime.

At the current pace, more than 2 million additional entries could liquidate during that period. Those entries could fall outside any system-wide adjustment and instead require importers to pursue refunds through protests or litigation, even if CBP thereafter processes unliquidated entries by subtracting IEEPA duties.

In total, that would mean that tens of millions of IEEPA entries would be liquidated before CBP’s new administrative process is established—and thus could fall outside the scope of that administrative process, seemingly requiring protests, litigation, or both.

5. CBP’s Proposed Refund System

The declaration also provides an important clue about how CBP may ultimately implement refunds.

Rather than automatically adjusting all entries, CBP describes a potential process in which:

1. Importers file a declaration in ACE identifying entries for which IEEPA duties were paid.

2. ACE recalculates the duties owed without the IEEPA tariffs.

3. CBP reviews the submission and verifies the calculations.

4. ACE liquidates or reliquidates the entries and issues refunds with interest. 

Notably, this proposed system would require importers themselves to identify the entries and request refunds.

In other words, it appears to be an opt-in claims process, not an automatic adjustment of all affected entries.

The proposed ACE declaration process resembles the administrative refund system Customs implemented after the Supreme Court held the Harbor Maintenance Tax unconstitutional as applied to exports in United States v. U.S. Shoe Corp. Importantly, the HMT refund system bypassed the liquidation and protest framework because the HMT was not was not assessed through the import entry liquidation process. As a result, it remains unclear whether CBP will adopt a similarly broad administrative process here.

6. What the Government Has — and Has Not — Said

During the court hearing that preceded the order, government lawyers suggested that importers would need to pursue individual litigation to obtain refunds. The government further stated that it intends to appeal the order insofar as it applies to importers who have not sued.

CBP’s declaration, in turn, does not state that CBP intends to apply its administrative mechanism to all importers automatically. Instead, the declaration describes a process in which importers themselves file declarations in ACE identifying entries for which refunds are sought.

Together, the filings leave open a critical question:

Who will actually be eligible to use the new system?

7. Three Possible Paths Forward

Based on the court’s order and the government’s filings, several plausible scenarios could unfold.

Scenario 1: Broad Implementation of the Court’s Order

CBP could build the new ACE functionality and apply it to all remaining unliquidated entries.

Under this approach, entries would be liquidated with IEEPA duties set to zero, effectively implementing the court’s order across the board.

This scenario would provide relief to a large number of importers, but it would also be difficult to reconcile with the government’s earlier statements suggesting that refunds must occur through litigation.

Scenario 2: Relief Only for Importers Who File CIT Actions

Another possibility is that CBP could use the new system capability only for importers who bring cases in the Court of International Trade under 28 U.S.C. § 1581(i).

In that scenario, the system would exist but would be used to implement refunds only for importers who file suit. Once the CIT orders CBP to reliquidate a specific importer’s entries, CBP would then ask the importer to submit a declaration to assist CBP in processing the court-ordered refund.

That approach would align more closely with the government’s statements during the hearing than the universal relief offered by Scenario 1.

Scenario 3: Relief Through the Protest Process

A third possibility is that the system could be used only after importers pursue the traditional protest process.

Under that framework:

1. importers file protests with CBP;

2. CBP denies the protests;

3. importers sue in the Court of International Trade under § 1581(a)

If the court then rules in favor of those importers, CBP could use the new system capability to implement the resulting judgments. Like Scenario 2, this approach would align more closely with the government’s statements during the hearing than the universal relief offered by Scenario 1.

Reading CBP’s declaration in light of the government’s statements during the hearing, Scenario 1 may be less likely than Scenarios 2 and 3. If that bears out, then importers will need to either protest, sue, or both for all their entries — not just those that are liquidated before CBP's new system is in place.

8. What Importers Should Be Thinking About Now

At this stage, one thing is clear:

The government has not committed to issuing automatic refunds to all importers.

Meanwhile, CBP is continuing to liquidate entries without subtracting IEEPA duties — and millions of additional entries may liquidate before CBP completes its new system capability.

Because liquidation determines the procedural path for obtaining refunds, the timing of each importer’s entries could significantly affect available options.

As a result, many companies that paid IEEPA tariffs are now evaluating protective protest and litigation strategies to ensure their refund rights are preserved. Because liquidation continues while these issues are resolved, the timing of each importer’s entries may significantly affect the available path to obtaining refunds.

The Bottom Line

Judge Eaton’s order raises the possibility of large-scale tariff refunds, but the legal validity of that order remains highly uncertain, as does the mechanism for issuing those refunds.

CBP’s declaration suggests the agency is developing a new system for processing refunds, but it does not clarify who will ultimately be able to use that system — or under what circumstances. Government lawyers, in turn, indicated their view that only importers who sue will be eligible for refunds.

The next several weeks will likely determine whether tariff refunds occur directly through CBP’s proposed administrative process — or only through protests and litigation.

___________________________________________________________

March 5, 2026

Analysis: States Challenge New Section 122 Tariffs

Today, a coalition of more than twenty states filed a new lawsuit in the U.S. Court of International Trade challenging the Trump administration’s latest tariff program.

The case—State of Oregon v. Trump—targets the administration’s new attempt to impose tariffs under Section 122 of the Trade Act of 1974, after the Supreme Court recently invalidated the earlier tariffs imposed under the International Emergency Economic Powers Act (IEEPA). A copy of the complaint is available here.

The lawsuit is the first major challenge to the administration’s new tariff authority and could become the central litigation over the current tariff program.

Background

On February 20, 2026, the Supreme Court held that the President lacked authority under IEEPA to impose tariffs.

Later that same day, the administration announced a new tariff program under Section 122, imposing a 10 percent tariff on most imports, with plans to increase the rate to 15 percent.

Section 122 has existed since 1974 but has never previously been used to impose tariffs. 

The statute allows temporary import restrictions only in narrow circumstances—primarily when the United States faces “large and serious balance-of-payments deficits.” 

The States’ Legal Arguments

The complaint argues that the administration’s use of Section 122 exceeds the authority granted by the statute. Unlike the IEEPA litigation, the plaintiff states do not contend that Section 122 does not authorize tariffs at all. Instead, they argue that the statutory conditions under which tariffs may be imposed have not been satisfied.

1. No balance-of-payments crisis

The states argue that the administration relied primarily on the U.S. trade deficit, which is only one component of the balance of payments. According to the complaint, a trade deficit alone does not constitute a balance-of-payments deficit. 

The complaint asserts that once capital and financial flows are included, the United States’ overall balance-of-payments position is close to zero and does not resemble the type of crisis contemplated by the statute. 

2. A statute designed for a different monetary system

The complaint also argues that Section 122 was designed for the fixed-exchange-rate system that existed prior to the mid-1970s. Under today’s floating exchange-rate system, the states argue that the type of balance-of-payments crisis contemplated by the statute is unlikely to arise in the same way.

3. Failure to comply with other statutory limits

The lawsuit also argues that the tariff program violates additional statutory constraints, including requirements that tariffs be applied in a broadly uniform and nondiscriminatory manner. The proclamation includes numerous country-specific and product-specific exceptions that the states argue are inconsistent with those statutory limits.  

What the States Are Asking the Court to Do

The states ask the Court of International Trade to:

• declare the tariffs unlawful;

• block their enforcement;

• vacate Customs’ implementation of the tariffs; and

• order refunds of tariffs already collected. 

Implications for Importers

The lawsuit could determine whether the administration’s new tariff program ultimately survives judicial review.

However, even if the tariffs are eventually invalidated, the refund process will likely involve a number of procedural steps. Those steps will occur within Customs and Border Protection and in the Court of International Trade. Importers are currently navigating those procedural steps regarding refunds of the IEEPA tariffs that the Supreme Court already held were unlawful.

For that reason, many companies are continuing to evaluate whether they should take steps to preserve potential refund rights while the litigation proceeds.

— Matthew A. Seligman, Principal, Grayhawk Law

___________________________________________________________

March 4, 2026

Analysis: The CIT’s Zero-Duty Order and the CASA Problem

Earlier today, the Court of International Trade ordered Customs and Border Protection to liquidate all as-yet unliquidated entries subject to the IEEPA tariffs at zero duties — for all importers, not just the plaintiffs before it.

The order is aggressive, and there is a significant chance the administration will obtain a stay from the Federal Circuit — or, if necessary, the Supreme Court — in the coming days.

The order raises two issues.

The first is whether the court can order that relief at all, because it bypasses the normal protest process. Under the customs statutes, importers ordinarily must challenge duties through the protest process. By ordering liquidation at zero for all unliquidated entries, the court effectively bypasses that framework.

The second — and the issue the administration will likely seek to stay immediately — is whether the court can grant relief for all importers, rather than limiting relief to the plaintiffs before it.

The Court of International Trade judge acknowledged the Supreme Court’s recent decision limiting nationwide injunctions, writing:

“In Trump v. CASA, Inc., the Supreme Court held ‘that universal injunctions are impermissible.’ … That holding, however, does not apply to the orders that will be issued in this case.”

That is a striking statement.

The opinion attempts to distinguish the Court of International Trade from other federal courts on the policy ground that the trade court has exclusive jurisdiction over customs disputes, and therefore there is no risk of conflicting rulings across different courts.

Whatever the merits of that policy argument, the Court of International Trade — like all federal courts — possesses only the powers granted by statute. And the opinion does not cite or address the statute that defines those powers:

“The Court of International Trade shall possess all the powers in law and equity of, or as conferred by statute upon, a district court of the United States.”

— 28 U.S.C. § 1585

In CASA, the Supreme Court held that district courts lack authority to issue equitable relief extending beyond the parties before them. Section 1585 provides that the Court of International Trade possesses the same powers as a district court — and no more. It is therefore difficult to see how the order can be reconciled with CASA.

The Federal Circuit — and especially the Supreme Court, which has shown strong interest in enforcing limits on nationwide injunctions and ensuring that lower courts follow its decisions — may therefore be receptive to the administration’s request for a stay.

The coming days will be significant. If the appellate courts stay the order, importers will need to rely on the protest process and Court of International Trade litigation to preserve refund rights — making it all the more important to act before applicable deadlines expire.

— Matthew A. Seligman, Principal, Grayhawk Law

___________________________________________________________

March 4, 2026

Update: Court Orders Zero-Duty Liquidation for IEEPA Tariffs — Stay Likely

Earlier today, the Court of International Trade issued an order directing U.S. Customs and Border Protection to liquidate all as-yet unliquidated entries at zero duties under the tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA). The court’s order can be found here.

If implemented as written, the order would effectively require Customs to treat the invalidated tariffs as zero for all importers, not just the plaintiffs in the case.

The government is expected to seek an immediate stay of the order from the U.S. Court of Appeals for the Federal Circuit — and potentially the Supreme Court — in the coming days.

The order raises two significant legal issues that will likely be addressed on appeal:

• whether the court can bypass the statutory protest process governing tariff disputes

• whether relief can extend beyond the plaintiffs in the case

Because the statute governing the Court of International Trade provides that the court possesses the same equitable powers as a federal district court, the order’s attempt to grant relief beyond the parties appears to conflict with the Supreme Court’s decision last year in Trump v. CASA limiting nationwide injunctions.

Companies that paid duties under the invalidated tariff program should continue evaluating whether to file protests to preserve potential refund claims before applicable liquidation deadlines.

Grayhawk Law is advising companies on strategies to preserve and pursue refunds of duties paid under the invalidated tariff program. Companies evaluating potential tariff refund claims may contact Grayhawk Law at info@grayhawklaw.com for additional information.

___________________________________________________________

Disclaimer: This page is provided for general informational purposes only and does not constitute legal advice. Legal rights and obligations depend on the specific facts and applicable law. Deadlines and procedural requirements may vary by importer and entry. You should consult counsel regarding your particular circumstances.