July Newsletter | Section 301 Tariffs Are Here to Stay

TOP NEWS: 

Section 301 Tariffs

On June 15, 2026, the U.S. Supreme Court declined to hear an appeal challenging the legality of the Section 301 tariffs on Chinese imports. While the Court did not issue a ruling on the merits, its decision leaves in place the lower court rulings that upheld the tariffs, effectively ending years of litigation and confirming that the duties will remain in effect for the foreseeable future.

For importers, the Supreme Court's action provides certainty, even if it is not the outcome many hoped for. Unlike the recent court decisions involving IEEPA tariffs, the Section 301 tariffs are now on solid legal footing and should be viewed as a long-term component of the importing landscape.

As a result, importers should focus less on the possibility of tariff refunds and more on managing duty exposure. This includes ensuring products are properly classified, customs values are accurately declared, and country-of-origin determinations are well documented. Companies should also evaluate available duty-saving opportunities, including duty drawback, free trade agreements where applicable, and supply chain adjustments.

With CBP continuing to increase its focus on trade enforcement, importers should expect greater scrutiny of classification and valuation practices. Regular compliance reviews can help identify errors, reduce risk, and ensure that duties are being paid correctly. Going forward, importers should assume these duties are here to stay and make tariff compliance and duty optimization a key part of their overall import strategy.

CAPE REFUNDS: PHASE 2

Not all reconciliation entries will qualify 

Phase 2 of CBP’s CAPE system was launched on June 29, 2026 and is designed specifically to address entries flagged for Reconciliation that were excluded from Phase 1. Unlike Phase 1, which focused on unliquidated entries and recently liquidated entries, Phase 2 will allow importers to seek refunds of invalidated IEEPA tariffs on reconciliation-related entries where the underlying entry is either unliquidated or was liquidated within 80 days of the Phase 2 filing date, and where the Type 09 reconciliation entry has not yet been filed. 

CBP estimates that Phase 2 could cover approximately 2.8 million additional entries and return roughly $28.7 billion in IEEPA tariff refunds. However, not all reconciliation entries will qualify. Older entries that liquidated more than 80 days before the June 29 launch date generally fall outside the scope of Phase 2 and may need to be addressed through a later CAPE phase or other legal remedies. 

For importers with reconciliation programs, it will be important to identify potentially eligible entries in advance and coordinate with customs brokers to ensure CAPE declarations are submitted promptly once Phase 2 becomes available. CBP has indicated that approved refunds will generally be issued within 60–90 days after acceptance of a CAPE declaration. 

EXPORT CONTROLS & TECHNOLOGY RESTRICTIONS 

Avoid detentions, penalties, or shipment seizures

CBP is increasingly serving as the enforcement arm for U.S. export controls, working closely with BIS, State, and OFAC to police shipments involving sensitive technologies. The primary focus is on advanced semiconductors, AI-related hardware, dual-use technologies, and any exports tied to restricted end users or jurisdictions. Enforcement now extends beyond physical goods to include deemed exports and technology transfers, with greater scrutiny of data access, software, and technical collaboration. 

CBP is leveraging automated targeting in ACE and interagency data sharing to flag compliance issues earlier, often before export departure. For exporters and importers alike, the expectation is clear: precise classification, verified end-use/end-user documentation, and strong internal export compliance programs are now essential to avoid detentions, penalties, or shipment seizures.