July 14, 2026 · LightSource + Butzel Webinar Recap
The Supreme Court struck down the IEEPA tariffs. $170 billion in duties are moving back toward importers. If your first reaction was relief, you're not alone, and you're probably underestimating what comes next.
That was the opening premise of today's webinar, co-hosted by LightSource and Butzel, where Spencer Penn sat down with Mitchell Zajac, trade counsel at Butzel and a former engineer at a Detroit Three automaker. Mitch has been inside the IEEPA litigation, the Section 232 expansion, and the enforcement wave that followed. What he laid out was not reassuring, but it was clarifying.
Here's what the conversation covered or watch the full replay here.
What the IEEPA ruling actually means
The International Emergency Economic Powers Act gave the Trump administration broad authority to implement tariffs quickly, without the full administrative process required under other trade statutes. From February 2025 onward, those tariffs generated roughly $170 billion in collected duties across three categories: reciprocal tariffs, country-specific tariffs, and tariffs tied to trafficking.
The Supreme Court found the IEEPA tariffs exceeded the statute's scope. Within a day of the ruling, CBP stopped collecting them. That part moved fast.
The refund process has also moved faster than most people expected from a government agency. By April 20, CBP had stood up the CAPE portal (the Consolidated Administration and Processing of Entries system) for Phase 1 refunds. Within three weeks, refunds started going out. As of today, more than $40 billion has been returned.
That sounds like progress. It is. But $40 billion out of $170 billion means roughly 75% is still unresolved and whether it comes back depends on deadlines most companies aren't tracking.
How the refund process actually works and where it breaks down
CAPE operates in phases based on the status of each import entry. Phase 1, which opened in April, covers entries that had not yet reached "final liquidation" the point at which CBP closes the books on an entry and loses the ability to administratively modify it. Phase 2, which opened June 29, covers reconciliation entries, where the full value of an import wasn't known at the time of entry.
Phase 3 is expected later this month. It's intended to cover entries that are fully liquidated and outside CBP's administrative reach but only for importers who have filed a lawsuit with the Court of International Trade. That's not a bureaucratic technicality. It means that for a significant slice of the $170 billion, the path to a refund runs through the federal court system.
The protest window is another option: 180 days from liquidation, you can file a formal protest. But filing a CIT lawsuit may actually be faster for Phase 3 access, because CBP has indicated it will process refunds for companies that can show a case number and matching entry numbers.
Two things complicate the refund picture for most companies. First, the importer of record the entity legally responsible for tendering duties at the border is the only party that can operate in CAPE. If your supplier was the importer of record, and your commercial agreement doesn't address where the refund goes, you have a contract dispute, not a refund. Second, the money was almost certainly not held in reserve. It went into general government revenue. Getting it back means navigating a system that is moving, but not automatically toward you.
Tariffs are not going away
This is the part of the conversation that matters most for forward-looking sourcing decisions.
Section 232 (national security tariffs on steel, aluminum, autos, semiconductors, and pharma) and Section 301 (tariffs targeting intellectual property theft, primarily targeting China) both survived judicial scrutiny. The Supreme Court upheld Section 301 last month, finding that the required administrative process investigation, public comment, agency review was followed correctly. That process is what makes these tariff authorities durable in a way that IEEPA was not.
Section 122 came into effect within hours of the IEEPA ruling as a stopgap. It allows the president to impose up to a 15% tariff to address balance of trade issues, but it's capped at 150 days. That clock expires July 24. Congressional extension is theoretically required for it to continue.
The more likely outcome, according to Mitch, is that Section 122 simply gets replaced by expanded 232 and 301 coverage. There are currently 60-plus active Section 301 investigations across most major trading partners, and Section 232 has been expanding beyond its original steel and aluminum scope. The tariff rates may shift. The countries in scope may shift. The legal architecture underlying them is not going anywhere.
The April 2 rule change that's catching manufacturers off guard
On April 2, the administration restructured how Section 232 tariffs apply to steel, aluminum, and copper products. Before that date, there was a derivative exception: if you were importing a finished product that contained steel or aluminum, the 232 tariff was applied only to the value of the metal content, not the full product value.
A $100 aluminum component that started as $5 worth of raw aluminum would attract tariffs on that $5 not on the full $100 after machining, assembly, and value-add.
That rule is gone. Since April 2, the tariff is determined by HTS code, applied to the full value of the product. Whether that's more or less than what you were paying before depends entirely on where your products land in the tariff schedule. For some manufacturers, the change is favorable. For others particularly those producing highly processed metal components it's a material cost increase that isn't reflected in current contracts.
What to do now: the practical playbook
Mitch's guidance was direct. These actions apply regardless of which tariff regime is in scope.
Pull your import data first. Your customs broker or your own ACE account can generate a report of every entry, the tariffs paid, the dates, and the current status. Until you have that, you can't know where your exposure or refund opportunity actually sits. Most companies haven't done this systematically.
Review your HTS codes. HTS classification is a human process, and it's not always right. Reclassifying a product to a more accurate code can change the tariff rate. This isn't gaming the system it's compliance. Mitch noted that some companies have found meaningful savings by doing a methodical review.
Look at your import valuation. The default approach for most importers is to use the final transaction price as the dutiable value. That's often not required. First-sale valuation using the price paid at the earliest point in the supply chain, before U.S. overhead and margin are added can reduce the dutiable value significantly. This analysis is painstaking, but it has paid off for companies that have worked through it.
Know who owns the tariff liability contractually. If you've been absorbing tariff costs on behalf of a customer, or if your supplier has been absorbing them on your behalf, your contracts may not address what happens to refunds. This is active litigation territory. Assign ownership now, not when the refund check arrives.
Designate an internal owner. Tariff management is now a cross-functional discipline: legal for interpretation, procurement for classification and sourcing, finance for cost modeling. Someone needs to own it. The companies getting ahead of this are the ones that treated it like a real operational function, not a quarterly finance line item.
Think about tariff optimization in sourcing decisions. Reshoring final assembly, breaking assemblies into separately classified components, using foreign trade zones, and evaluating first-sale opportunities are all strategies companies are using actively. Each one requires a cost-benefit analysis against the tariff savings it produces. At 50% tariffs on some categories, the math has changed.
The question everyone is actually asking
When Section 122 expires July 24, what replaces it?
Mitch's answer: the 232 and 301 investigations that are already underway will almost certainly fill the gap for most major trading partners. Unless a specific bilateral trade deal gets worked out country-by-country, the tariff exposure for those countries shifts to a different legal authority, not to zero.
The framing that drove this whole session: tariffs aren't going away. They're changing form. The companies that are building systems to track, model, and respond to those changes will have a structural cost advantage over the ones treating each rule change as a one-time event.
Watch the full session
This recap covers the key points, but the full Q&A including a live question about FedEx claiming IEPA refunds on behalf of consignees, and a detailed breakdown of protest timelines and CIT filings is worth watching in its entirety.
[Watch the recording →]
See how LightSource helps manufacturers model tariff exposure
LightSource is a direct procurement operating system built for manufacturers navigating supply chains where cost assumptions shift fast. If you want to understand your tariff exposure across your supply base and stress-test sourcing decisions before you make them, we'd like to show you how it works.
LightSource is a direct procurement operating system. Learn more at lightsource.ai.
Mitchell Zajac is a Shareholder at Butzel and a registered patent attorney. He advises manufacturers and supply chain leaders on USMCA, Section 301 and 232 tariffs, IEEPA, and customs compliance. More resources at butzel.com/resources-trade.
July 14, 2026 · LightSource + Butzel Webinar Recap
The Supreme Court struck down the IEEPA tariffs. $170 billion in duties are moving back toward importers. If your first reaction was relief, you're not alone, and you're probably underestimating what comes next.
That was the opening premise of today's webinar, co-hosted by LightSource and Butzel, where Spencer Penn sat down with Mitchell Zajac, trade counsel at Butzel and a former engineer at a Detroit Three automaker. Mitch has been inside the IEEPA litigation, the Section 232 expansion, and the enforcement wave that followed. What he laid out was not reassuring, but it was clarifying.
Here's what the conversation covered or watch the full replay here.
What the IEEPA ruling actually means
The International Emergency Economic Powers Act gave the Trump administration broad authority to implement tariffs quickly, without the full administrative process required under other trade statutes. From February 2025 onward, those tariffs generated roughly $170 billion in collected duties across three categories: reciprocal tariffs, country-specific tariffs, and tariffs tied to trafficking.
The Supreme Court found the IEEPA tariffs exceeded the statute's scope. Within a day of the ruling, CBP stopped collecting them. That part moved fast.
The refund process has also moved faster than most people expected from a government agency. By April 20, CBP had stood up the CAPE portal (the Consolidated Administration and Processing of Entries system) for Phase 1 refunds. Within three weeks, refunds started going out. As of today, more than $40 billion has been returned.
That sounds like progress. It is. But $40 billion out of $170 billion means roughly 75% is still unresolved and whether it comes back depends on deadlines most companies aren't tracking.
How the refund process actually works and where it breaks down
CAPE operates in phases based on the status of each import entry. Phase 1, which opened in April, covers entries that had not yet reached "final liquidation" the point at which CBP closes the books on an entry and loses the ability to administratively modify it. Phase 2, which opened June 29, covers reconciliation entries, where the full value of an import wasn't known at the time of entry.
Phase 3 is expected later this month. It's intended to cover entries that are fully liquidated and outside CBP's administrative reach but only for importers who have filed a lawsuit with the Court of International Trade. That's not a bureaucratic technicality. It means that for a significant slice of the $170 billion, the path to a refund runs through the federal court system.
The protest window is another option: 180 days from liquidation, you can file a formal protest. But filing a CIT lawsuit may actually be faster for Phase 3 access, because CBP has indicated it will process refunds for companies that can show a case number and matching entry numbers.
Two things complicate the refund picture for most companies. First, the importer of record the entity legally responsible for tendering duties at the border is the only party that can operate in CAPE. If your supplier was the importer of record, and your commercial agreement doesn't address where the refund goes, you have a contract dispute, not a refund. Second, the money was almost certainly not held in reserve. It went into general government revenue. Getting it back means navigating a system that is moving, but not automatically toward you.
Tariffs are not going away
This is the part of the conversation that matters most for forward-looking sourcing decisions.
Section 232 (national security tariffs on steel, aluminum, autos, semiconductors, and pharma) and Section 301 (tariffs targeting intellectual property theft, primarily targeting China) both survived judicial scrutiny. The Supreme Court upheld Section 301 last month, finding that the required administrative process investigation, public comment, agency review was followed correctly. That process is what makes these tariff authorities durable in a way that IEEPA was not.
Section 122 came into effect within hours of the IEEPA ruling as a stopgap. It allows the president to impose up to a 15% tariff to address balance of trade issues, but it's capped at 150 days. That clock expires July 24. Congressional extension is theoretically required for it to continue.
The more likely outcome, according to Mitch, is that Section 122 simply gets replaced by expanded 232 and 301 coverage. There are currently 60-plus active Section 301 investigations across most major trading partners, and Section 232 has been expanding beyond its original steel and aluminum scope. The tariff rates may shift. The countries in scope may shift. The legal architecture underlying them is not going anywhere.
The April 2 rule change that's catching manufacturers off guard
On April 2, the administration restructured how Section 232 tariffs apply to steel, aluminum, and copper products. Before that date, there was a derivative exception: if you were importing a finished product that contained steel or aluminum, the 232 tariff was applied only to the value of the metal content, not the full product value.
A $100 aluminum component that started as $5 worth of raw aluminum would attract tariffs on that $5 not on the full $100 after machining, assembly, and value-add.
That rule is gone. Since April 2, the tariff is determined by HTS code, applied to the full value of the product. Whether that's more or less than what you were paying before depends entirely on where your products land in the tariff schedule. For some manufacturers, the change is favorable. For others particularly those producing highly processed metal components it's a material cost increase that isn't reflected in current contracts.
What to do now: the practical playbook
Mitch's guidance was direct. These actions apply regardless of which tariff regime is in scope.
Pull your import data first. Your customs broker or your own ACE account can generate a report of every entry, the tariffs paid, the dates, and the current status. Until you have that, you can't know where your exposure or refund opportunity actually sits. Most companies haven't done this systematically.
Review your HTS codes. HTS classification is a human process, and it's not always right. Reclassifying a product to a more accurate code can change the tariff rate. This isn't gaming the system it's compliance. Mitch noted that some companies have found meaningful savings by doing a methodical review.
Look at your import valuation. The default approach for most importers is to use the final transaction price as the dutiable value. That's often not required. First-sale valuation using the price paid at the earliest point in the supply chain, before U.S. overhead and margin are added can reduce the dutiable value significantly. This analysis is painstaking, but it has paid off for companies that have worked through it.
Know who owns the tariff liability contractually. If you've been absorbing tariff costs on behalf of a customer, or if your supplier has been absorbing them on your behalf, your contracts may not address what happens to refunds. This is active litigation territory. Assign ownership now, not when the refund check arrives.
Designate an internal owner. Tariff management is now a cross-functional discipline: legal for interpretation, procurement for classification and sourcing, finance for cost modeling. Someone needs to own it. The companies getting ahead of this are the ones that treated it like a real operational function, not a quarterly finance line item.
Think about tariff optimization in sourcing decisions. Reshoring final assembly, breaking assemblies into separately classified components, using foreign trade zones, and evaluating first-sale opportunities are all strategies companies are using actively. Each one requires a cost-benefit analysis against the tariff savings it produces. At 50% tariffs on some categories, the math has changed.
The question everyone is actually asking
When Section 122 expires July 24, what replaces it?
Mitch's answer: the 232 and 301 investigations that are already underway will almost certainly fill the gap for most major trading partners. Unless a specific bilateral trade deal gets worked out country-by-country, the tariff exposure for those countries shifts to a different legal authority, not to zero.
The framing that drove this whole session: tariffs aren't going away. They're changing form. The companies that are building systems to track, model, and respond to those changes will have a structural cost advantage over the ones treating each rule change as a one-time event.
Watch the full session
This recap covers the key points, but the full Q&A including a live question about FedEx claiming IEPA refunds on behalf of consignees, and a detailed breakdown of protest timelines and CIT filings is worth watching in its entirety.
[Watch the recording →]
See how LightSource helps manufacturers model tariff exposure
LightSource is a direct procurement operating system built for manufacturers navigating supply chains where cost assumptions shift fast. If you want to understand your tariff exposure across your supply base and stress-test sourcing decisions before you make them, we'd like to show you how it works.
LightSource is a direct procurement operating system. Learn more at lightsource.ai.
Mitchell Zajac is a Shareholder at Butzel and a registered patent attorney. He advises manufacturers and supply chain leaders on USMCA, Section 301 and 232 tariffs, IEEPA, and customs compliance. More resources at butzel.com/resources-trade.
July 14, 2026 · LightSource + Butzel Webinar Recap
The Supreme Court struck down the IEEPA tariffs. $170 billion in duties are moving back toward importers. If your first reaction was relief, you're not alone, and you're probably underestimating what comes next.
That was the opening premise of today's webinar, co-hosted by LightSource and Butzel, where Spencer Penn sat down with Mitchell Zajac, trade counsel at Butzel and a former engineer at a Detroit Three automaker. Mitch has been inside the IEEPA litigation, the Section 232 expansion, and the enforcement wave that followed. What he laid out was not reassuring, but it was clarifying.
Here's what the conversation covered or watch the full replay here.
What the IEEPA ruling actually means
The International Emergency Economic Powers Act gave the Trump administration broad authority to implement tariffs quickly, without the full administrative process required under other trade statutes. From February 2025 onward, those tariffs generated roughly $170 billion in collected duties across three categories: reciprocal tariffs, country-specific tariffs, and tariffs tied to trafficking.
The Supreme Court found the IEEPA tariffs exceeded the statute's scope. Within a day of the ruling, CBP stopped collecting them. That part moved fast.
The refund process has also moved faster than most people expected from a government agency. By April 20, CBP had stood up the CAPE portal (the Consolidated Administration and Processing of Entries system) for Phase 1 refunds. Within three weeks, refunds started going out. As of today, more than $40 billion has been returned.
That sounds like progress. It is. But $40 billion out of $170 billion means roughly 75% is still unresolved and whether it comes back depends on deadlines most companies aren't tracking.
How the refund process actually works and where it breaks down
CAPE operates in phases based on the status of each import entry. Phase 1, which opened in April, covers entries that had not yet reached "final liquidation" the point at which CBP closes the books on an entry and loses the ability to administratively modify it. Phase 2, which opened June 29, covers reconciliation entries, where the full value of an import wasn't known at the time of entry.
Phase 3 is expected later this month. It's intended to cover entries that are fully liquidated and outside CBP's administrative reach but only for importers who have filed a lawsuit with the Court of International Trade. That's not a bureaucratic technicality. It means that for a significant slice of the $170 billion, the path to a refund runs through the federal court system.
The protest window is another option: 180 days from liquidation, you can file a formal protest. But filing a CIT lawsuit may actually be faster for Phase 3 access, because CBP has indicated it will process refunds for companies that can show a case number and matching entry numbers.
Two things complicate the refund picture for most companies. First, the importer of record the entity legally responsible for tendering duties at the border is the only party that can operate in CAPE. If your supplier was the importer of record, and your commercial agreement doesn't address where the refund goes, you have a contract dispute, not a refund. Second, the money was almost certainly not held in reserve. It went into general government revenue. Getting it back means navigating a system that is moving, but not automatically toward you.
Tariffs are not going away
This is the part of the conversation that matters most for forward-looking sourcing decisions.
Section 232 (national security tariffs on steel, aluminum, autos, semiconductors, and pharma) and Section 301 (tariffs targeting intellectual property theft, primarily targeting China) both survived judicial scrutiny. The Supreme Court upheld Section 301 last month, finding that the required administrative process investigation, public comment, agency review was followed correctly. That process is what makes these tariff authorities durable in a way that IEEPA was not.
Section 122 came into effect within hours of the IEEPA ruling as a stopgap. It allows the president to impose up to a 15% tariff to address balance of trade issues, but it's capped at 150 days. That clock expires July 24. Congressional extension is theoretically required for it to continue.
The more likely outcome, according to Mitch, is that Section 122 simply gets replaced by expanded 232 and 301 coverage. There are currently 60-plus active Section 301 investigations across most major trading partners, and Section 232 has been expanding beyond its original steel and aluminum scope. The tariff rates may shift. The countries in scope may shift. The legal architecture underlying them is not going anywhere.
The April 2 rule change that's catching manufacturers off guard
On April 2, the administration restructured how Section 232 tariffs apply to steel, aluminum, and copper products. Before that date, there was a derivative exception: if you were importing a finished product that contained steel or aluminum, the 232 tariff was applied only to the value of the metal content, not the full product value.
A $100 aluminum component that started as $5 worth of raw aluminum would attract tariffs on that $5 not on the full $100 after machining, assembly, and value-add.
That rule is gone. Since April 2, the tariff is determined by HTS code, applied to the full value of the product. Whether that's more or less than what you were paying before depends entirely on where your products land in the tariff schedule. For some manufacturers, the change is favorable. For others particularly those producing highly processed metal components it's a material cost increase that isn't reflected in current contracts.
What to do now: the practical playbook
Mitch's guidance was direct. These actions apply regardless of which tariff regime is in scope.
Pull your import data first. Your customs broker or your own ACE account can generate a report of every entry, the tariffs paid, the dates, and the current status. Until you have that, you can't know where your exposure or refund opportunity actually sits. Most companies haven't done this systematically.
Review your HTS codes. HTS classification is a human process, and it's not always right. Reclassifying a product to a more accurate code can change the tariff rate. This isn't gaming the system it's compliance. Mitch noted that some companies have found meaningful savings by doing a methodical review.
Look at your import valuation. The default approach for most importers is to use the final transaction price as the dutiable value. That's often not required. First-sale valuation using the price paid at the earliest point in the supply chain, before U.S. overhead and margin are added can reduce the dutiable value significantly. This analysis is painstaking, but it has paid off for companies that have worked through it.
Know who owns the tariff liability contractually. If you've been absorbing tariff costs on behalf of a customer, or if your supplier has been absorbing them on your behalf, your contracts may not address what happens to refunds. This is active litigation territory. Assign ownership now, not when the refund check arrives.
Designate an internal owner. Tariff management is now a cross-functional discipline: legal for interpretation, procurement for classification and sourcing, finance for cost modeling. Someone needs to own it. The companies getting ahead of this are the ones that treated it like a real operational function, not a quarterly finance line item.
Think about tariff optimization in sourcing decisions. Reshoring final assembly, breaking assemblies into separately classified components, using foreign trade zones, and evaluating first-sale opportunities are all strategies companies are using actively. Each one requires a cost-benefit analysis against the tariff savings it produces. At 50% tariffs on some categories, the math has changed.
The question everyone is actually asking
When Section 122 expires July 24, what replaces it?
Mitch's answer: the 232 and 301 investigations that are already underway will almost certainly fill the gap for most major trading partners. Unless a specific bilateral trade deal gets worked out country-by-country, the tariff exposure for those countries shifts to a different legal authority, not to zero.
The framing that drove this whole session: tariffs aren't going away. They're changing form. The companies that are building systems to track, model, and respond to those changes will have a structural cost advantage over the ones treating each rule change as a one-time event.
Watch the full session
This recap covers the key points, but the full Q&A including a live question about FedEx claiming IEPA refunds on behalf of consignees, and a detailed breakdown of protest timelines and CIT filings is worth watching in its entirety.
[Watch the recording →]
See how LightSource helps manufacturers model tariff exposure
LightSource is a direct procurement operating system built for manufacturers navigating supply chains where cost assumptions shift fast. If you want to understand your tariff exposure across your supply base and stress-test sourcing decisions before you make them, we'd like to show you how it works.
LightSource is a direct procurement operating system. Learn more at lightsource.ai.
Mitchell Zajac is a Shareholder at Butzel and a registered patent attorney. He advises manufacturers and supply chain leaders on USMCA, Section 301 and 232 tariffs, IEEPA, and customs compliance. More resources at butzel.com/resources-trade.
Faster sourcing. Lower cost. Less chaos.
See how LightSource connects engineering, procurement, and suppliers in one operating system to help you launch faster at lower cost.
SOC 2
Kearney #1 2024
Gartner Cool Vendor
Procuretech 100
G2 Top Rated
Faster sourcing. Lower cost. Less chaos.
See how LightSource connects engineering, procurement, and suppliers in one operating system to help you launch faster at lower cost.
SOC 2
Kearney #1 2024
Gartner Cool Vendor
Procuretech 100
G2 Top Rated
Faster sourcing. Lower cost. Less chaos.
See how LightSource connects engineering, procurement, and suppliers in one operating system to help you launch faster at lower cost.
SOC 2
Kearney #1 2024
Gartner Cool Vendor
Procuretech 100
G2 Top Rated
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