Aftermath of IEEPA Tariffs: Refunds, calculation of U.S. export price & impact on anti-dumping duty

The U.S. Department of Commerce’s (‘Commerce’) experiment with tariffs imposed under the International Emergency Economic Powers Act (‘IEEPA’) has created an unusual dilemma for anti-dumping proceedings.

In 2025, the United States imposed tariffs on imports from most of its trading partners under the IEEPA. In February 2026, the Supreme Court held that IEEPA did not authorize the President of U.S. to impose tariffs.^[1] The decision raised questions extending beyond customs administration and tariff refunds.

One such question concerns anti-dumping duty calculations. Under Section 772(c)(2)(A) of the Tariff Act of 1930, the Commerce deducts U.S. import duties from export price and constructed export price when calculating dumping margins. Commerce has continued to deduct IEEPA duties notwithstanding the Supreme Court's ruling, reasoning that the duties had been paid and had not been refunded during the period of investigation. Such deduction artificially lowers U.S. price and inflates dumping margins.

This approach gives rise to a broader legal issue: can payments made under a tariff regime subsequently held unlawful continue to be treated as ‘United States import duties’ for purposes of calculating dumping margins? The answer cannot depend solely on whether the Customs and Border Protection (‘CBP’) has issued a refund.

The Supreme Court’s ruling: What does it mean for anti-dumping calculations?

IEEPA empowers the President of the U.S. to take specified actions, including regulating importation, in response to certain threats.^[2] President Trump relied on it to impose two sets of tariffs in 2025. The Supreme Court held that authority to regulate importation did not include authority to levy tariffs. Congress holds that power and had not delegated it through IEEPA.

The judgment does not invalidate duties imposed under statutes that authorize them, such as Sections 201 and 232. Nor does it decide whether payments collected under IEEPA qualify as ‘United States import duties’ under Section 772. That requires interpretation of the anti-dumping statute. Yet the judgment establishes that the executive branch lacked tariff authority. This is an important aspect for the Commerce to consider when deciding whether to reduce IEEPA tariff from the U.S. price for calculating the export price to the U.S. in accordance with Section 772(c)(2)(A) of the Tariff Act of 1930.

Section 772(c)(2)(A): Can unlawful tariffs qualify as deductible import duties?

A. The statutory requirement

Section 772(c)(2)(A) of the Tariff Act of 1930^[3] requires Commerce to reduce export price and constructed export price by:

‘...the amount, if any, included in such price, attributable to any additional costs, charges, or expenses, and United States import duties, which are incident to bringing the subject merchandise from the original place of shipment in the exporting country to the place of delivery in the United States.’

Section 772 requires deductions for amounts included in those prices attributable to specified costs, charges, expenses and U.S. import duties incurred in bringing goods to the U.S.

B. Whether an unlawful tariff qualifies for deduction

An import duty ordinarily rests on authority granted by Congress. IEEPA tariffs lacked that authority. Deducting them solely because the CBP collected them would preserve the effect of an unauthorized measure. Section 772 should not be read to produce that result without examining the character of the payment. Unlawfully collected IEEPA duties are not ‘import duties’ under Section 772(c)(2)(A), and they undeniably would have the effect of creating or artificially inflating the margin when those duties are refunded or are set to be refunded upon liquidation.

Commerce's current position appears to focus on the fact that the statute concerns amount incurred in importation, even if the tariff was later invalidated. A seller may have included the charge in its price, and an importer may have paid it. Therefore, the duties were collected at the time of importation, were reflected in the import transaction. Accordingly, they are treated as deductible import duties irrespective of subsequent judicial developments.

Those facts are important; however, payment and classification differ in nature. An IEEPA collection is not necessarily deductible merely because it appeared on an entry summary.

C. Alternative statutory characterization

Even if the charge is not an ‘import duty’, the Commerce might characterize it as another ‘cost, charge, or expense’ incident to importation. That interpretation faces its own difficulties. The phrase ‘costs, charges, or expenses’ must be interpreted in its statutory context and alongside the separate reference to ‘United States import duties.’ If every unauthorized border charge could be deducted as a generic import-related expense, the distinction drawn by Congress between duties and other import-related costs would lose much of its significance.

Moreover, such an interpretation would substantially diminish the effect of the Supreme Court's ruling. An amount that cannot qualify as a lawful import duty should not automatically acquire a basis for deduction merely through relabeling.

D. The significance of refunds

The existence of a refund significantly strengthens the argument against the deduction the IEEPA tariffs. Where the person bearing the duty has recovered it, deduction may reduce U.S. price for a cost that has been reversed.

However, the identity of the party that ultimately bore the duty is also a critical consideration. A refund to the importer-on-record does not necessarily reimburse the exporter. Terms of sale, reimbursement arrangements and price changes must be examined.

Accordingly, a refund should not automatically determine the deduction analysis. Rather, it should form part of a broader inquiry into whether the payment retains the legal and economic characteristics of a deductible import duty. Nevertheless, where a duty has been refunded, or where refund is legally mandated and reasonably certain, the justification for continuing to deduct that amount from U.S. price becomes considerably weaker.

The Federal Circuit’s approach: Lessons from Wheatland Tube and Borusan Mannesmann

A. Wheatland Tube Co. v. United States

In Wheatland Tube Co. v. United States, the Federal Circuit upheld not to deduct Section 201 safeguard duties as ‘United States import duties’ under Section 772(c)(2)(A). The court observed that deducting safeguard duties could produce overlapping trade-remedy effects by increasing an existing dumping margin or even creating a margin where none otherwise existed.

The significance of Wheatland Tube lies not in its treatment of safeguards as such, but in its recognition that the label ‘tariff’ does not automatically resolve whether a charge must be deducted from export price. The court looked beyond the mechanical fact that the duties were collected at the border and examined the purpose and function of the measure within the broader trade-remedy framework.

That reasoning is relevant to IEEPA duties. The issue is not whether IEEPA tariffs resemble safeguard measures. Rather, Wheatland Tube demonstrates that Section 772(c)(2)(A) requires an inquiry into the legal character and practical effect of a particular measure before it is treated as a deductible import duty.

B. Borusan Mannesmann v. United States

Borusan Mannesmann reached a different result. The Federal Circuit upheld deduction of Section 232 duties. It considered the statutory authorization and the proclamation’s direction that the duties applied in addition to other duties.^[4]

Executive Order 14257 relating to IEEPA also stated that its tariffs would apply in addition to other duties, subject to exceptions.^[5] That language favors the argument for deduction. However, Section 232 authorized the measure examined in Borusan. The Supreme Court's IEEPA decision reached the opposite conclusion, holding that IEEPA conferred no authority to impose tariffs. An executive order may define the scope and operation of a tariff measure, but it cannot supply authority that the underlying statute does not provide.

For that reason, Borusan Mannesmann may ultimately support both sides of the debate. While it confirms that valid supplemental tariffs can qualify as deductible import duties, it also underscores the importance of a lawful statutory basis for the measure being deducted.

C. Legal principle emerging from the cases

Neither judgment resolves the IEEPA question. Together, they require attention to the authorizing statute, the measure’s terms and the relationship with anti-dumping remedies. Courts must interpret Section 772 rather than accept Commerce’s reading merely because the text admits competing interpretations.^[6]

Commerce’s approach in Silicon Metal from Australia: The limits of its reasoning

In the June 2026 final determination concerning Silicon Metal from Australia, Commerce deducted the tariff for determining the export price. The respondent argued that IEEPA tariff would be refunded. Commerce found no evidence directly linking that charge to IEEPA, or showing that a refund had been received during the period of investigation. The seller’s terms of sale covered U.S. duties, and the charge had not been invoiced separately to the buyer.^[7] Consequently it treated the charge as included in U.S. price. It declined to calculate on the assumption that a refund might occur later.

IEEPA refunds and liquidation: When administrative procedures affect dumping margins

The Refund timing creates a further issue. Refunds may arise after the investigation period, while Commerce must decide a case on its record and under its procedural rules. Exporters should therefore establish the connection between each entry, the duty payment, the reported sale and any refund. They must also raise the statutory objection.

A. CAPE and the timing of refunds

After the Supreme Court’s ruling, the Court of International Trade ordered the CBP to liquidate unliquidated entries without IEEPA duties and to reliquidate entries whose liquidation was not final. The CBP developed the Consolidated Administration and Processing of Entries (‘CAPE’) refund mechanism.^[8]

B. Interaction with anti-dumping proceedings

Importers generally deposit anti-dumping duties upon entry. Where an administrative review is requested, the assessment rate is determined later. Liquidation may remain suspended and may be enjoined during judicial review.^[9]

A conflict that follows is that Commerce may rely on the absence of a refund to deduct an IEEPA payment, while the CBP may defer that refund until liquidation. The deduction may increase the margin under challenge, even though the payment is refundable. A delay in administering refunds should not determine the charge’s character under Section 772.

C. Aditya Birla Chemicals litigation

In Aditya Birla Chemicals USA Inc. and Pack Perfect Inc. v. Trump, the importers asked the Court of International Trade to confirm refund entitlement for IEEPA payments and direct the CBP to provide refunds before liquidation. They cited the Commerce’s Silicon Metal determination^[10] and the adverse consequences that could arise if refunds remained pending while Commerce continued to deduct the duties from U.S. price calculations.

The litigation is significant because it highlights the tension between customs administration and anti-dumping law. If unlawfully collected duties remain unreimbursed during the period of investigation, Commerce may treat them as deductible amounts notwithstanding the Supreme Court's determination that the tariffs lacked statutory authorization. Delays in the refund process may therefore affect dumping margin calculations even where the underlying duties are ultimately returned.

However, the motion concerns refund timing and process, not a ruling on the legality of Commerce’s deduction. The verified filing does not establish that the court ordered the requested mechanism.

Implications for Indian exporters and their U.S. importers

For Indian exporters facing U.S. anti-dumping investigations or reviews, deducting IEEPA payments may lower U.S. export price and increase dumping margins. The first step is to identify whether each charge was included in the reported price and who ultimately bore it.

Exporters should retain entry summaries, duty records, invoices, terms of sale, refund evidence and intercompany accounts. These records should support both the legal objection and any adjustment requested in the U.S. sales database. Objections must be preserved under Commerce’s procedures and, where applicable, for review.^[11] A pending refund should not, by itself, affect the dumping margin.

Conclusion: A deduction requires a legal basis

The Supreme Court’s ruling should affect more than repayment of IEEPA collections. Section 772 must be applied to the legal character of the charge, its inclusion in U.S. price and the effect of refunds. Wheatland Tube and Borusan require analysis, not automatic deduction. Indian exporters and their U.S. importers should challenge deductions based solely on collection records and establish who bore the amount. The CBP refund process may affect the facts of a particular case, but it should not substitute for statutory interpretation.

[The authors are Associate and Partner, respectively, in International Trade & WTO practice at Lakshmikumaran & Sridharan Attorneys]

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^[1] Learning Resources, Inc. v. Trump, 607 U.S. 229 (2026), judgment dated 20 February 2026. The Supreme Court held that IEEPA did not authorize the President to impose tariffs. The Court affirmed the Federal Circuit’s judgment in V.O.S. Selections and vacated the District Court judgment in Learning Resources on jurisdictional grounds (https://www.supremecourt.gov/opinions/25pdf/24-1287_new_3135.pdf ).

^[2] International Emergency Economic Powers Act, 50 U.S.C. § 1702(a)(1)(B), concerning presidential authority over specified transactions and property, including importation and exportation. (https://uscode.house.gov/us/usc/t50/s1702)

^[3] Section 772(c)(2)(A) of the Tariff Act of 1930, codified at 19 U.S.C. § 1677a(c)(2)(A). The provision governs deductions from export price and constructed export price for amounts included in those prices and attributable to specified import-related costs and duties. (https://uscode.house.gov/us/usc/119-124/t19/s1677a)

^[4] Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States, 63 F.4th 25 (Fed. Cir. 2023), particularly the discussion concerning the character of the duty imposed through Proclamation 9705 and its treatment under Section 772(c)(2)(A). (https://www.cafc.uscourts.gov/opinions-orders/21-2097.OPINION.3-15-2023_2094841.pdf)

^[5] Executive Order 14257, Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits, 90 Fed. Reg. 15041 (7 April 2025), particularly Section 3(c), concerning duties imposed in addition to other applicable duties, subject to exceptions. (https://www.federalregister.gov/documents/2025/04/07/2025-06063/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and)

^[6] Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). The Supreme Court overruled the Chevron deference framework and held that courts must exercise independent judgment when interpreting statutes administered by agencies. It also explained that earlier judgments relying on Chevron were not automatically reopened. (https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf)

^[7] Silicon Metal from Australia: Final Affirmative Determination of Sales at Less Than Fair Value, 91 Fed. Reg. 39593 (30 June 2026); accompanying Issues and Decision Memorandum dated 25 June 2026, Comment 9, pages 16–17, concerning duties charged under IEEPA. (https://www.federalregister.gov/documents/2026/06/30/2026-13118/silicon-metal-from-australia-final-affirmative-determination-of-sales-at-less-than-fair-value)

^[8] Atmus Filtration, Inc. v. United States, CIT Court No. 26-01259, Order dated 4 March 2026, ECF No. 21, subsequently amended; see also the order dated 20 March 2026, ECF No. 49. The CBP subsequently developed CAPE to process IEEPA refunds. (https://www.dwt.com/-/media/files/2026/04/atmusfiltration_032026.pdf?hash=230C7736BA1554A88E8A14140B50E93F&rev=24adf11e8d384a048315bba84dea5a2b) (https://content.govdelivery.com/accounts/USDHSCBP/bulletins/412cc7f) 

^[9] 19 U.S.C. § 1675(a)(1)–(3), concerning administrative reviews and assessment of anti-dumping duties; and 19 U.S.C. § 1516a(c)(2), concerning injunctions against liquidation during judicial review. (https://uscode.house.gov/us/usc/119-124/t19/s1675) (https://uscode.house.gov/us/usc/119-124/t19/s1516a) 

^[10] Aditya Birla Chemicals USA Inc. and Pack Perfect Inc. v. Trump, CIT Court No. 26-00134, Motion to Lift Stay and for Issuance of Order Clarifying Refunds, ECF No. 9, filed 27 July 2026, particularly pages 2–4. The applicants requested relief concerning repayment of IEEPA duties on Type 03 entries before liquidation. (https://diaztradelaw.com/wp-content/uploads/2026/09/gov.uscourts.cit_.18221.9.0.pdf)

^[11] 19 U.S.C. § 1516a, concerning judicial review of determinations in anti-dumping and countervailing duty proceedings, including the requirements for review of administrative determinations. (https://uscode.house.gov/us/usc/119-124/t19/s1516a)