WASHINGTON, March 7 — A US Customs and Border Protection (CBP) official told a federal court yesterday the agency is preparing a new system to process tariff refunds — and a judge has granted it time to do so.

The CBP aims to have this system ready for use in 45 days, its executive director of trade programmes Brandon Lord said in a filing.

It will be more efficient than currently available processes, he said, adding that the agency is unable to immediately begin refunding a swath of President Donald Trump’s tariffs that were ruled illegal by the Supreme Court last month.

This is because despite the Court of International Trade’s order on Wednesday to begin initial refunds, the CBP lacks capability to handle the “unprecedented volume” of cases.

“Its existing administrative procedures and technology are not well suited to a task of this scale and will require manual work that will prevent personnel from fully carrying out the agency’s trade enforcement mission,” Lord said.

After considering Lord’s comments, Judge Richard Eaton suspended his directive for refunds “to the extent that it directs immediate compliance,” giving CBP room to set up its new system.

In his earlier order this week, Eaton told CBP to stop calculating the illegal tariffs for imports where payments were not fully finalised.

While the scope of his directive was not immediately clear, trade lawyers said the ruling could apply to almost all imports where the now-illegal duties were paid.

Lord noted yesterday that more than 330,000 importers had made over 53 million entries where they deposited or paid duties that have since been struck down.

These tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), collected approximately US$166 billion (RM655 billion) in duties and estimated deposits as of Wednesday, when Judge Eaton’s order was first issued.

Around 20.1 million entries were yet to be finalised as of Wednesday.

Lord said CBP’s systems cannot immediately prevent such payments from being finalised without the IEEPA tariffs, and that attempts to do so would create complications.

A coalition of US small businesses, We Pay the Tariffs, had cheered the initial directive for tariff refunds.

It said: “A full, fast, and automatic refund process is what these businesses are owed and anything less is unacceptable.” — AFP