The Refund Files: What Paid Out, What Still Bounces, and What Comes Next
A May 25 field guide for furniture, rug, and textile importers: the IEEPA refund pipeline, the still-stressed Hormuz freight map, and the duty stack that remains after the headline tariff fell away.
Bottom line — CAPE is real money now, not a promise: CBP reported about $35.46 billion in refunds plus interest for reliquidated entries, with 69% of declarations clearing file validation. But the importers who win the next sixty days are the ones treating refunds, freight, and remaining duties as one landed-cost problem.
The refund story has crossed the line from legal theory into operating cash. The IEEPA tariff layer is being removed from eligible entries, Treasury has begun sending payments, and the first wave of importers can now point to bank activity instead of court language.
That does not mean the problem is over. It means the problem has changed shape. The question for furniture, rug, textile, lighting, mirror, and home decor importers is no longer only, Will the refund system work? It is now: How much cash is actually through the pipe, which claims are getting stuck, what happens if the government appeals, and what duty or freight cost is still sitting underneath the refund?
This is the May 25 read: one article, three balance-sheet problems. First, what CAPE has paid out and where the refund pipeline narrows. Second, why a possible Hormuz reopening has not yet translated into lower freight. Third, what the new duty stack looks like after IEEPA, including the quiet Section 122 problem forming behind the current refund round.
What CAPE Has Actually Paid Out
Start with the number that matters. In a May 12 declaration filed with the Court of International Trade, Brandon Lord of U.S. Customs and Border Protection reported that, as of 7 a.m. ET on May 11, CAPE had received 126,237 declarations. Of those, 86,874 passed file validation. Those accepted declarations covered 15,123,221 entries accepted for removal of IEEPA duties, and 8,338,081 entries had been liquidated or reliquidated without IEEPA duties.
The resulting anticipated refund and interest amount: $35.46 billion. That figure includes principal and associated interest for the entries that had reached the liquidated/reliquidated stage. It does not mean every dollar had landed in every importer account by May 11. CBP also said only a portion had been consolidated and sent to Treasury, and that 1,880 consolidated refunds were not transmitted because ACH account information had not been provided.
Source: CBP declaration filed May 12, 2026, data as of May 11. Bar widths illustrate stage attrition and reader flow; declarations, entry lines, and dollars are different units.
The operational takeaway is blunt: filed, validated, reliquidated, queued, transmitted, and received are not the same status. The importers who talk about CAPE as one bucket are going to miss where their money is actually sitting.
What We Said In April vs. Where It Landed
In early April, the refund story was still mostly a readiness story. Would the portal launch? Would CBP have enough usable infrastructure? Would a court-ordered process turn into a real payment pathway? The answer is now yes, but with friction.
| Question | Early April | May 25 |
|---|---|---|
| Is the portal live? | Not yet; readiness was the central question. | Live since April 20; CAPE opened in ACE at 7:11 a.m. ET. |
| Has any money moved? | No. The refund was still an expected outcome. | Yes. CBP identified $35.46B in refund plus interest for reliquidated entries, with payments moving through Treasury. |
| Where is the friction? | Build risk and timing. | Validation failures, ACH gaps, complex entries, and Phase 2 uncertainty. |
| What is the biggest legal date? | The implementation timetable. | The government appeal window around June 7, plus separate Section 122 litigation. |
| Is there a second refund story? | Not the main event. | Yes. Section 122 is now contested, though relief remains narrow and uncertain. |
Why Almost A Third Of Claims Bounce
The 69% file-validation pass rate may be the most useful operating number in the whole CAPE update, because the 31% that fail are mostly failing for reasons an importer can fix before filing. Based on the source material and broker patterns, the recurring issues are not exotic. They are customs hygiene.
That is why a refund is not just a legal entitlement. It is an operations test. The companies with clean entry records, mapped HTS codes, broker authority in place, and working ACH setup will pull cash out of the system faster than companies that have to reconstruct the paper trail after the fact.
The Pass-Through Lawsuits Are A Different Fight
There is also a second, messier arrow of liability: customers suing companies, not companies suing the government. The theory is simple enough. If a retailer, marketplace, logistics provider, or brand passed tariff surcharges through to customers when IEEPA was in force, and later receives a refund, customers may argue the company cannot keep both the surcharge and the refund.
The practical risk is not only who "deserves" the money. It is whether invoices, terms, purchase orders, checkout language, and customer communications clearly say how tariffs and future refunds are allocated. A company that treated tariff surcharges as temporary pass-through costs in public copy may have a very different litigation posture from a company that treated them as part of final price.
Phase 2, And The Second Domino Behind The First
Everything above is mostly Phase 1: cleaner eligible entries that CAPE can handle now. Phase 2 is harder. It includes finally liquidated entries outside the easy reliquidation window, reconciliation entries, drawback claims, entries tangled with antidumping or countervailing duties, and other cases where the refund cannot simply flow through the same straight pipe.
The second domino is Section 122. After the Supreme Court removed IEEPA as the tariff foundation, the administration moved to a 10% global surcharge under Section 122 of the Trade Act of 1974. On May 7, the Court of International Trade found that Section 122 use unlawful in cases brought by importer plaintiffs, but the relief is narrow and the government has appealed. Skadden's May 20 summary notes that most importers remain subject to the 10% surcharge while the appeal plays out, and that the surcharge expires by statute on July 24.
Hormuz: The Gap Between The Announcement And The Water
The freight side has its own version of the same problem: headlines moved faster than operations. President Trump said on May 23 that a deal with Iran and the reopening of the Strait of Hormuz had been "largely negotiated," while Iranian-linked reporting quickly disputed how final or complete that claim was. AP's reporting captured the core tension: the outlines of a deal may be visible, but the Strait does not normalize because a statement lands on a Saturday.
For importers, the better signal is the market. If the war were easing in a way carriers and insurers believed, the first place to see it would be rates. Instead, Drewry's May 21 World Container Index rose 6% to $2,712 per 40-foot container, the third weekly increase that month. Shanghai-to-Rotterdam jumped 15% to $2,773, Shanghai-to-Genoa rose 10% to $4,082, Shanghai-to-New York rose 2% to $4,317, and Shanghai-to-Los Angeles rose 1% to $3,385.
Source: Drewry World Container Index, assessed May 21, 2026. Spot rates only; contract rates and surcharges differ.
The workarounds carriers built are another sign that nobody is waiting for a clean reopening. Services have shifted toward land bridges, port swaps, overland Gulf routing, and longer Cape of Good Hope itineraries. Even if the Strait reopens, mines, stranded vessels, insurance repricing, schedule bunching, and carrier redeployment can keep the freight bill elevated for months.
Origin Is Destiny Right Now
The buying-desk question is not "what is happening in the Strait?" It is "does this hit my goods?" The answer depends almost entirely on origin and routing.
Turkish rugs and many Turkish furniture exports can sail Mediterranean-to-Atlantic into the U.S. without touching Hormuz or Suez. That routing advantage is real, especially against Asia-to-Europe and Asia-to-Med pressure.
Indian rugs regain duty competitiveness after the 50% era, but west-coast routing, energy exposure, and polyester/wool cost pressure keep the landed-cost picture volatile.
China, Vietnam, Malaysia, Indonesia, and Thailand do not need Hormuz or Suez for U.S. West Coast routings, but they still face tariff, compliance, and capacity pressure.
Bangladesh textile and jute-related flows are more exposed to Red Sea/Suez disruption for Europe-bound traffic, and jute costs remain a separate carpet-backing issue.
Your New Duty Stack, Decoded
The most expensive mistake in the post-IEEPA environment is thinking of "the tariff" as one number. It is not one number. It is a stack: base/MFN duty, Section 122 if applicable, Section 301 on many China-origin goods, Section 232 on covered furniture and derivatives, AD/CVD where applicable, and a transshipment penalty if Customs decides the origin story is fake.
Losing the IEEPA layer helped. It did not reset the landed-cost math to 2023. A Chinese upholstered sofa can still carry a punishing stack because Section 301 and Section 232 remain. A Turkish machine-made rug may land with a much lighter duty burden, and its freight routing avoids the eastern chokepoints. An Indian handmade rug looks materially better than it did during the punitive 50% period, but it still needs a live HTS read, freight quote, and surcharge check.
Illustrative landed-duty examples only, not duty quotes. Actual liability depends on precise HTS classification, customs value, exclusions, origin treatment, and current stacking rules.
The 40% Trap Under China + 1
The duty stack also changes how to think about China + 1. Some movement into Vietnam, Malaysia, Cambodia, Thailand, and Indonesia is real manufacturing. Some is Chinese goods making a paperwork stop to launder origin. Customs knows the difference, and the penalty can be worse than the duty that sourcing move was meant to avoid.
For some product lines, a sloppy origin move is now more dangerous than buying direct from China and pricing the known duty. A known 25% Section 301 line is painful but modellable. A transshipment finding, a non-mitigable penalty, and a fraud problem can damage a bank relationship, a retailer relationship, and an importer record all at once.
Already Paid vs. Still Ahead
The best way to read the next quarter is not only by rate. It is by timing: which costs are already embedded in prices, and which ones are still waiting to hit.
IEEPA duties already paid, much of the Section 301/232 burden, 2025 pricing resets, and sourcing changes made during the India 50% period are already in the system. Refunds may create cash relief without fully undoing shelf-price inflation.
Section 122 uncertainty, new Section 301 investigations, peak-season freight surcharges, war-risk insurance, and any post-Hormuz congestion wave are not settled yet. Q3 landed cost can still move even if IEEPA cash comes back.
What To Do Now
Less philosophy, more desk work. If you import furniture, rugs, textiles, lighting, mirrors, or home decor, this is the near-term checklist.
Standing Caveats Before You Act
This article is a trade and landed-cost briefing, not legal advice. CAPE eligibility, protest strategy, liquidation timing, refund allocation, and Section 122 preservation all depend on importer-specific facts. Confirm every material customs step with your broker and trade counsel before filing, suing, allocating refunds, or changing customer communications.
The signal is not that the crisis is over. The signal is that it has become operational. The money is moving, but so are the deadlines, the ships, the lawsuits, and the replacement tariff theories. Treat the refund as one part of the landed-cost file, not the whole file.