US-Mexico Trade: Tariff Refunds, Port Expansion & New Manufacturing Plant
WASHINGTON – A recent U.S. Supreme Court ruling striking down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) has triggered a scramble among importers seeking to recover an estimated $166 billion in duties, although also creating legal uncertainty over the refund process. The February 20th decision, which invalidated tariffs linked to fentanyl enforcement, migration, and broader reciprocal trade measures with Mexico, Canada, and China, is reshaping U.S. Tariff authority, according to legal experts.
Attorneys at Venable LLP hosted a webinar this week outlining the implications of the ruling. Elizabeth K. Lowe, a partner at the firm, explained that while the court’s decision was “broad and clear with respect to the legality of IEEPA-based tariffs,” it offered no guidance on how refunds would be handled. “But the decision did not speak at all to remedies. That remains an open issue,” Lowe stated.
The ruling has prompted importers to assess their eligibility for refunds, with U.S. Customs and Border Protection (CBP) data indicating approximately 330,000 importers could be affected. Although, recovering the funds is proving complex. Ashley Craig, also a partner at Venable, noted, “There are more questions right out of the gate than we have answers.”
CBP has proposed a recent refund mechanism within its Automated Commercial Environment (ACE) system, requiring importers to file claims for review, and recalculation. Even under optimistic projections, the system’s launch could take at least 45 days, with actual refunds potentially taking months or longer. Recent rulings by the U.S. Court of International Trade (CIT) have broadened refund eligibility, with Judge Richard Eaton ordering CBP to liquidate or reliquidate qualifying entries on March 4th. However, the CIT ruling stipulates that only unliquidated entries or those within a 90-day reliquidation window are covered by the administrative process, potentially leaving billions in duties outside the streamlined pathway.
Venable attorneys suggest that filing claims directly with the CIT may be the most reliable option for importers with entries outside the 90-day window. Lowe advised, “There are some folks who are wanting to be exceptionally conservative…and file protests in addition to going the Court of International Trade route. But…filing at the CIT is the best way to ensure that you will have access to refunds for all of your entries, regardless of liquidation status.”
Despite the court rulings, the administration is expected to resist or delay the refund process. The Justice Department has already attempted to delay proceedings, and Treasury officials have indicated refunds could take over a year, despite acknowledging sufficient funds are available. President Trump has suggested the issue could remain in litigation for years, while officials explore options to limit payouts.
Wes Sudduth, a partner at Venable, cautioned, “I feel the overall point is we can expect the administration to push back and to be more candid, to fight tooth and nail, to delay and to carve away as many entries as it can that would ultimately be paid back to importers as refunds.”
In related news, APM Terminals has inaugurated Phase II of its container terminal at the Port of Lázaro Cárdenas in Mexico, and announced plans for Phase III, backed by over $350 million in investment. Phase II adds capacity and automation, increasing annual throughput to 2 million TEUs. Phase III will extend the terminal’s quay to 1,200 meters and is expected to generate 4,000 jobs during construction and support 1,700 direct jobs by 2029.
Also in Mexico, German industrial technology firm Phoenix Contact has opened a new $95 million manufacturing plant in Querétaro, creating 700 jobs. The facility will produce connectors, cables, and sensors for automation and industrial electronics, serving the U.S. Market.