Launch of U.S. Tariff Refund Mechanism

Further to our client updates dated April 7, 2025, and August 18, 2025, we would like to update you on recent developments concerning the refund of tariffs imposed on importers in the United States under the tariff policy of President Trump.

As noted in our previous updates, on April 1, 2025, the President of the United States signed executive orders imposing reciprocal tariffs, pursuant to the International Emergency Economic Powers Act (IEEPA). Under these measures, a baseline tariff of 10% was imposed on imports from countries that do not have significant trade deficits with the United States, alongside increased tariffs at varying rates on more than 50 countries with significant trade deficits with the United States, including Israel, for which a tariff rate of 17% was initially established (and later revised to 15%).

Following the imposition of the tariffs, several legal proceedings were initiated, in the context of which the US Supreme Court determined, on February 20, 2026, that President Trump’s use of his authority under the IEEPA to impose reciprocal tariffs was unlawful.  Implementation of that decision, including the mechanism for the U.S. Customs and Border Protection (CBP) refund the IEEPA tariffs collected, was remanded to the Court of International Trade to manage and it ordered CBP to comply.

Further to the above, on April 20, 2026, U.S. CBP announced that the tariff refund mechanism would be implemented gradually using a new system with the acronym CAPE. In the first phase, the refund mechanism will generally apply to import entries that have not yet undergone liquidation (a process that is typically completed within about 10 months following release) and those that have liquidated less than 80 days before the filing is made to CAPE and therefore are not yet administratively “final”.

At this stage, the mechanism does not apply to import entries for which a protest or drawback claim has been filed, entries that were liquidated more than 80 days previously, and certain other cases.

The system is expected to recalculate the applicable customs duties and process refunds, together with interest, to the designated bank account provided in the application. The estimated processing time for refunds is approximately 60–90 days from the date of approval of the request.

Israeli exporters are not eligible to independently submit applications for tariff refunds. Only the U.S. “importers of record” are authorized to submit a CAPE Declaration request.  To the extent that Israeli companies have US affiliates who are the importers, the US affiliate must make the request.  If a US business partner requested reduction in prices to offset the IEEPA tariffs, business discussions may be appropriate.  Each situation must be reviewed on a case-by-case basis.

To read the full announcement published by U.S. CBP, please click here.

It should be noted that notwithstanding the cancellation of tariffs previously imposed under the IEEPA framework, a 10% tariff currently applies to virtually all imports into the United States. This is due to the re-imposition of tariffs on February 24, 2026, pursuant to Section 122 of the Trade Act of 1974.  It is expected that by July those tariffs will be replaced by tariffs individualized to each country, similar to the prior situation with the IEEPA tariffs, pursuant to pending procedures under Section 301 of the Trade Act of 1974.

We continue to monitor developments in this area and will be pleased to assist with any questions you may have.