What Every Multinational Should Know About …Managing the Aftermath of the Supreme Court’s Historic IEEPA Tariff Decision (Part VI)

The Supreme Court’s decision invalidating the IEEPA tariffs resolved the central legal question surrounding those measures. The focus is now shifting to the next (and for many companies, more consequential) phase: how to recover the billions of dollars in duties that were paid while the tariffs were in effect.

As discussed in the first two installments of this eight-part series, the refund process is unlikely to be simple. It will likely involve a combination of Court of International Trade (CIT) litigation, administrative procedures, and the creation of new refund mechanisms, all against a backdrop of jockeying behind the scenes to determine who actually gets to keep IEEPA tariff refunds.

To help companies navigate the aftermath of the Supreme Court’s IEEPA decision, the Foley International Trade & National Security and Supply Chain teams are providing a seven-article series regarding how to manage the aftermath of the Supreme Court’s IEEPA decision. The series covers:

• Part I: Understanding the New Section 122 Tariffs and Preserving IEEPA Refund Rights (found here)
• Part II: Preserving the Right to IEEPA Tariff Refunds (found here)
• Part III: Contractual Issues for Companies That Are Importers of Record (found here)
• Part IV: Customs & Supply Chain Issues for Importers of Record (found here)
• Part V: Refund-Related Issues for Companies That Indirectly Paid IEEPA Tariffs (found here)
• Part VI: Avoiding Common Pitfalls When Dealing with Refund-Related Issues

• Part VII: Understanding the Future Landing Spot for Tariffs
• Part VIII: What Steps Should Importers Owed Refunds Be Taking to Prepare

To help companies navigate this landscape, this alert draws together key themes from across the series into a set of common pitfalls to avoid. These pitfalls fall into four broad categories: (1) Customs and refund strategy errors; (2) supplier and contractual recovery errors; (3) errors in pursuing recovery when not the importer of record (IOR); and (4) supply chain and operational strategy errors.

Avoiding Common Pitfalls When Dealing with Refund-Related Issues

For companies that acted as importers of record, the most immediate risk is procedural: failing to take the steps necessary to preserve and secure refund rights. The Supreme Court’s decision does not automatically result in refunds, and the process will be shaped by ongoing litigation at the CIT and potential administrative actions. Given the fast-moving changes at the CIT, including the order by Judge Eaton that Customs and Border Protection (CBP) has 45 days to establish a refunds mechanism, the items below should be updated to reflect new developments as they occur.

Keeping this in mind, companies should be mindful of the following common pitfalls:

• Assuming refunds will be automatic
  • The Supreme Court invalidated the tariffs but did not establish any refund mechanism or timeline
  • Refunds will likely require affirmative action and may be limited based on procedural posture
• Failing to file protective actions under 28 USC § 1581(i)
  • Waiting for clarity on the refund process may result in loss of jurisdictional rights
  • Companies that do not file may be excluded if relief is ultimately limited to plaintiffs
• Not actively tracking liquidation and protest deadlines
  • Once entries liquidate, duties generally become final unless timely protested or covered by judicial relief
  • Failure to monitor liquidation status can result in permanent loss of recovery
• Incomplete identification of affected entries
  • Companies often overlook entries due to decentralized brokers, multiple importer entities, or port-level fragmentation
  • Missing entries directly reduces recoverable amounts and weakens overall claims
• Relying solely on administrative remedies
  • Post-summary corrections (PSCs) and protests may not be sufficient depending on how the CIT addresses exhaustion and adequacy of remedies
  • Over-reliance on administrative paths may leave companies procedurally exposed
• Inconsistent or unreliable data across systems
  • Discrepancies between ACE data, broker filings, and internal financial systems can delay or undermine claims
  • Lack of a centralized “single source of truth” creates risk in both litigation and administrative processes
• Overlooking audit and enforcement risk tied to refund claims
  • Large refund requests are likely to trigger scrutiny from CBP
  • Errors in classification, valuation, or origin may be surfaced during the refund process
• Continuing legacy classification or origin practices without revalidation
  • Enforcement remains heightened, particularly around country of origin and tariff applicability
  • Positions taken during the IEEPA period may be revisited under current enforcement priorities
• Failing to monitor developments at the CIT and CBP in real time
  • Key issues — including scope of relief, exhaustion requirements, and refund mechanics — are still being litigated
  • Companies that do not track developments risk missing required actions or deadlines
• Focusing on historical refunds while ignoring new tariff exposure
  • The administration has already pivoted to new tariff authorities (Sections 122, 232, and 301 of the Trade Act of 1974)
  • Companies may be simultaneously pursuing refunds while incurring new and potentially larger liabilities

Supplier & Contractual Recovery Errors for Importers of Record

Even where importers of record successfully obtain refunds from the government, a second set of issues arises: whether, and to what extent, those funds must be shared with customers or other downstream parties.

During 2025, many companies passed through IEEPA tariffs via price increases or surcharges, often relying on contractual provisions that were not designed to address tariff reversals. As a result, refund recovery may quickly give rise to contractual disputes, customer claims, and broader commercial considerations.

Companies should be mindful of the following common pitfalls:

• Assuming refunds can be retained without analysis
  • Receipt of a refund from CBP does not necessarily establish entitlement to retain those funds
  • Contractual obligations or commercial expectations may require partial or full pass-through
• Failing to review contract language before taking positions
  • Early communications with customers may inadvertently concede legal or commercial positions
  • Statements regarding entitlement or retention can be difficult to unwind
• Overlooking asymmetry in contract provisions
  • Many agreements address tariff increases but are silent on decreases or reversals
  • This asymmetry creates ambiguity — and risk — when determining refund obligations
• Ignoring how tariffs were implemented in practice
  • Course of dealing, invoices, and communications may shape how contractual provisions are interpreted
  • Surcharges described as “temporary” or tariff-specific may support customer claims
• Inconsistent treatment across customers or business units
  • Different approaches for similarly situated customers may create legal and reputational risk
  • Inconsistency can undermine defenses in negotiations or disputes
• Underestimating customer claims for reimbursement
  • Downstream purchasers may actively seek recovery, particularly where tariff costs were clearly identified
  • Claims may arise quickly once refunds become more visible
• Lack of coordination across internal stakeholders
  • Misalignment between legal, sales, and finance teams can weaken the company’s position
  • Commercial teams may inadvertently make commitments that create exposure
• Failing to clearly document tariff pass-through
  • Weak or inconsistent documentation complicates both defense and negotiation
  • Lack of clarity around pricing adjustments increases dispute risk
• Overlooking contractual timing and notice requirements
  • Contracts may impose procedural requirements for price adjustments, claims, or credits
  • Failure to follow these requirements may affect rights and obligations
• Escalating disputes prematurely or unnecessarily
  • Immediate confrontation may damage relationships and reduce flexibility
  • Structured, strategic engagement often leads to better commercial and legal outcomes

Errors in Seeking Recovery When Not the Importer of Record

For companies that did not serve as the IOR, pursuing recovery of IEEPA-related duties presents a more attenuated — and often more legally complex — path. Because refund rights generally run to the IOR, downstream parties must carefully evaluate their legal standing, contractual rights, and evidentiary posture before taking action. Missteps at this stage can result in wasted effort, weakened commercial leverage, or foreclosed recovery opportunities.

Companies should be mindful of the following common pitfalls:

• Assuming there is standing to pursue refunds directly
  • CBP refund rights typically run to the IOR, not downstream purchasers
  • Companies that were not the IOR may lack privity or statutory standing to seek refunds from the government
• Failing to identify the actual IOR
  • Many companies operate through distributors, related parties, or customs brokers, obscuring IOR status
  • Misidentifying the IOR can delay strategy and complicate recovery pathways
• Delaying engagement with the IOR
  • Waiting until refunds are imminent may reduce negotiating leverage
  • Early coordination is often necessary to preserve commercial and legal options
• Overlooking contractual recovery rights
  • Supply agreements, distribution contracts, or pricing provisions may allocate tariff risk
  • Failure to review contract language may result in missed reimbursement opportunities
• Relying on informal commercial understandings
  • Past practices or verbal assurances may not create enforceable recovery rights
  • Lack of written support weakens both negotiation and litigation posture
• Insufficient documentation of tariff pass-through
  • Companies must be able to demonstrate that tariff costs were actually borne
  • Weak invoice support or cost allocation records undermine recovery claims
• Ignoring potential alignment issues with the IOR
  • The IOR may have different incentives regarding refund pursuit
  • Lack of alignment can create delays, disputes, or incomplete recovery efforts
• Failing to structure cooperation agreements where appropriate
  • Downstream parties may need formal arrangements governing refund pursuit and allocation
  • Absence of clear agreements increases the risk of later disputes
• Overlooking statute of limitations and procedural posture
  • Recovery strategies may depend on whether the IOR preserved protest or litigation rights
  • Downstream parties that wait too long may find practical recovery pathways foreclosed
• Escalating prematurely without a coordinated strategy
  • Immediate legal demands may strain commercial relationships without improving recovery odds
  • A phased, evidence-driven approach often produces better commercial outcomes
• Treating recovery as purely legal rather than commercial
  • Many successful recoveries are achieved through structured commercial negotiations
  • Companies that ignore business dynamics may miss practical resolution opportunities

Supply Chain & Operational Strategy Errors

Companies should avoid treating the IEEPA decision as a one-time event. Instead, it represents a structural shift toward ongoing tariff volatility, with new measures already emerging under alternative authorities.

Companies that focus solely on recovering past tariffs, without adapting their supply chains and operating models, risk replacing prior exposure with new and potentially greater liabilities.

Against this backdrop, common pitfalls include:

• Treating the IEEPA decision as the end of tariff risk
  • New tariffs under Sections 122, 232, and 301 are already reshaping the landscape
  • Companies that assume a return to “normal” may be caught unprepared
• Failing to reassess supply chain concentration risk
  • Continued reliance on single-country or single-supplier sourcing increases vulnerability
  • Concentration risk is magnified in a volatile tariff environment
• Lack of viable alternative sourcing options
  • No qualified backup suppliers or production locations if tariffs shift
  • Limited optionality reduces negotiating leverage and operational flexibility
• Ignoring country-of-origin flexibility
  • Inability to adjust sourcing or production to achieve different origin outcomes
  • Lack of origin planning can lock in unfavorable tariff treatment
• Overlooking tariff engineering opportunities
  • Product design, component sourcing, or manufacturing decisions not aligned with tariff optimization
  • Missed opportunities to reduce duty exposure through legally supportable strategies
• Not integrating tariff considerations into procurement decisions
  • Sourcing decisions made without real-time input from trade compliance or legal teams
  • Disconnect between procurement strategy and tariff risk
• Failure to update landed cost and pricing models
  • Outdated duty assumptions can erode margins or distort pricing decisions
  • Finance and commercial teams may be operating on inaccurate cost structures
• Underutilizing duty mitigation programs
  • Missed opportunities to leverage foreign-trade zones (FTZs), bonded warehouses, or duty drawback
  • Existing programs may not be optimized for the current tariff environment
• Slow operational response to tariff changes
  • Inability to adjust sourcing, logistics, or pricing quickly in response to new measures
  • Delays can result in sustained exposure and margin compression
• Lack of cross-functional coordination
  • Disconnects between legal, trade compliance, procurement, supply chain, and finance teams
  • Fragmented decision-making increases both compliance risk and commercial inefficiency.

The Supreme Court’s IEEPA decision has created a rare moment in which past tariff exposure, current compliance obligations, and future supply chain strategy are all in flux at the same time. Companies that approach this moment holistically — by preserving refund rights, managing contractual relationships, and strengthening supply chain resilience — will be best positioned to recover value and mitigate risk.

At the same time, the complexity of these issues — spanning customs procedure, contract law, supply chain strategy, and dispute risk — means that missteps can have significant consequences.

If you have questions about these developments, including strategies for securing refunds, managing supplier relationships, or adapting supply chains to evolving tariff regimes, the Foley International Trade & National Security and Supply Chain teams are ready to assist. Please feel free to reach out to the authors or your Foley & Lardner relationship attorney.

Frequently Asked Questions

FAQ #1: What is the most common mistake companies are making right now?

The most common error is assuming that refunds will eventually occur without action. Companies that wait for complete clarity before taking steps, such as identifying affected entries or preserving litigation rights, risk:

• losing jurisdictional rights,
• missing protest deadlines, or
• weakening their recovery position.

In the current environment, strategic preparation is often more important than perfect information. Further, the current system that CBP is developing has an opt-in mechanism that affirmative requires that importers download their IEEPA tariff imports and provide CBP with a spreadsheet, meaning that importers who fail to do so will potentially lose their right to refunds. We will be covering this topic in detail in Part VIII of this series.

FAQ #2: Why is it important to track liquidation and protest deadlines?

Once an entry liquidates and the protest period expires, the duties assessed generally become final. If liquidation occurs before refund mechanisms are established, companies that have not preserved their rights may find that recovery is procedurally barred. Monitoring liquidation status and protest windows is therefore a critical element of any refund strategy.

FAQ #3: If we receive a refund, can we automatically retain the money?

Not necessarily. Even where the government refunds duties to the importer of record, contractual or commercial obligations may require that some or all of those funds be shared with customers. Many contracts were drafted to address tariff increases, but not tariff reversals, which can create ambiguity regarding refund entitlement. Companies should carefully analyze relevant contracts before making statements about retaining or distributing refunds.

FAQ #4: Why is it important to review how tariff surcharges were implemented in practice?

Courts and counterparties often look not only at the contract language but also at the course of dealing between the parties. For example:

• invoices showing explicit tariff surcharges,
• emails describing charges as “temporary,” or
• pricing notices tied directly to tariffs

may influence how contractual obligations are interpreted. As a result, companies should review both formal agreements and real-world pricing practices.

FAQ #5: What risks arise when companies are not the importer of record?

Companies that did not serve as the importer of record typically cannot seek refunds directly from CBP. Instead, recovery may depend on:

• contractual rights against suppliers,
• coordination with the importer of record, or
• commercial negotiations regarding tariff pass-through.

Companies that misidentify the importer of record or delay engagement with that party may lose practical recovery opportunities.

FAQ #6: Why is it important to coordinate internally across business functions?

Refund-related issues often involve multiple departments, including:

• legal;
• procurement;
• supply chain;
• finance; and
• sales.

Without coordination, companies may encounter problems such as:

• inconsistent positions taken with suppliers or customers;
• incomplete data regarding affected entries; or
• commercial teams making commitments that create legal exposure.

FAQ #7: What operational steps can companies take to reduce future tariff exposure?

Companies may consider:

• diversifying sourcing locations;
• developing alternative suppliers;
• evaluating country-of-origin strategies;
• reviewing tariff engineering opportunities; and
• incorporating tariff considerations into procurement decisions.

The goal is to build supply chain resilience in an environment of continuing tariff volatility.

FAQ #8: What should companies be doing right now?

Companies should consider taking several immediate steps:

• identifying entries potentially affected by IEEPA tariffs;
• evaluating whether refund rights have been preserved;
• reviewing supplier and customer contracts for tariff provisions;
• organizing supporting documentation and customs data;
• aligning internal teams on refund and dispute strategy; and
• monitoring developments at the CIT and CBP.

Companies that act early will be better positioned to secure refunds, manage contractual obligations, and reduce future tariff risk.

FAQ #9: How should companies incorporate tariff risk into supply chain planning?

Companies should begin treating tariff exposure as a core supply chain variable, alongside cost, quality, and logistics. Practical steps include:

• diversifying sourcing across multiple countries or regions;
• developing backup suppliers in different jurisdictions;
• assessing country-of-origin flexibility in manufacturing processes; and
• incorporating tariff scenarios into sourcing and procurement decisions.

Supply chains that rely heavily on a single country or supplier may face disproportionate exposure when tariff policy changes.

FAQ #10: Should companies reconsider how tariffs are addressed in contracts?

Yes. One of the lessons from the IEEPA episode is that many contracts were not drafted with tariff volatility in mind. Companies should consider revisiting contract language related to:

• tariff and duty allocation;
• change-in-law provisions;
• price adjustment mechanisms;
• surcharge structures; and
• refund or rebate obligations.

Future agreements may need to address both tariff increases and tariff reversals in order to avoid disputes similar to those now emerging.

FAQ #11: How can companies improve their ability to respond quickly to new tariffs?

Companies that respond quickly to tariff changes typically have:

• centralized customs and trade data;
• strong coordination between legal, procurement, and finance teams;
• clear internal processes for evaluating tariff impacts; and
• visibility into supplier sourcing and manufacturing locations.

Organizations that lack these capabilities often face slow response times and higher compliance risk when tariffs change.

FAQ #12: How can companies build internal structures that better manage tariff risk?

Many companies are establishing cross-functional tariff risk teams that include:

• legal and trade compliance;
• procurement and supply chain;
• finance and pricing teams; and
• senior management responsible for strategic sourcing.

These teams can evaluate tariff developments in real time and help ensure that sourcing decisions, pricing strategies, and compliance obligations remain aligned.

FAQ #13: What lessons should companies take from the IEEPA experience?

Several lessons stand out:

• tariff policy can change quickly and unpredictably;
• contracts often fail to anticipate tariff reversals or refunds;
• supply chain concentration increases vulnerability to trade policy shifts; and
• companies with strong internal coordination are better positioned to respond.

Companies that treat tariffs as an ongoing strategic issue rather than a compliance afterthought will be better positioned to manage future disruptions.

FAQ #14: How should companies account for potential refunds in their financial statements?

Accounting treatment may depend on several factors, including the degree of certainty regarding recovery, and the company’s applicable accounting standards. In many cases, companies will need to evaluate whether expected refunds should be treated as:

• contingent assets;
• recoverable duties; or
• other adjustments to cost of goods sold.

Finance and accounting teams should coordinate with legal and trade compliance teams to ensure that financial assumptions regarding refunds are consistent with the company’s litigation and administrative strategy.

FAQ #15: Could disputes over tariff refunds lead to litigation between commercial partners?

Yes. Because tariffs were frequently passed through the supply chain, refund recovery may lead to disputes regarding who is entitled to the returned funds. Potential disputes could arise between:

• importers and their customers;
• distributors and suppliers; and
• even related entities within corporate groups.

These disputes may involve issues such as contract interpretation, the course of dealing between the parties, the history of price increases and how they were communication, and commercial expectations regarding tariff pass-through. Companies should therefore approach refund recovery with both legal analysis and commercial strategy in mind. A careful review of all communications around price increases, including how they were communication and what was said, is an important starting point.

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. Click Here to Register for our email list to receive future emails and practical international regulatory compliance tips, including our biweekly What Every Multinational Should Know articles.

The Foley Supply Chain Practice

The Foley Supply Chain Team helps create, strengthen, and protect every link of your supply chain. Our multidisciplinary group of attorneys brings vast experience across sectors and industries and provides practical, business‑focused legal support across every aspect of supply chain operations — from commercial contracts and compliance to logistics, supply of goods, manufacturing, and risk management. For insights on other trending supply chain topics and to get to know our supply chain team, please feel free to reach out to the authors or to visit Foley’s Supply Chain Team page.