How to Challenge, Seek Refunds, and Navigate the Administrative Remedies Available Under U.S. Customs Law
Current Status (December 2025): All Section 301 maritime fees are suspended for one year effective November 10, 2025, following the Trump-Xi trade agreement. The suspension runs through November 9, 2026. Fees collected between October 14 and November 10, 2025 may be subject to refund.
On April 17, 2025, the Office of the United States Trade Representative (USTR) imposed unprecedented "service fees" on vessels entering U.S. ports based on their connection to China—whether through ownership, operation, or place of construction. These fees took effect on October 14, 2025, and were suspended less than a month later.
This report is not primarily about whether the fees are good policy. It is about what vessel owners can do—the practical administrative remedies available under U.S. customs law to challenge fee assessments, seek refunds, obtain clarifying rulings, and ultimately bring constitutional and statutory questions before the courts.
The remarkable thing about U.S. customs law is that these remedies have existed for over two centuries. Ship masters argued their own cases before the Supreme Court in the 1800s. The procedures for challenging assessments, requesting refunds, and obtaining binding guidance were designed to be accessible to men of trade, not just lawyers. This tradition continues today.
| Date | Event | Citation |
|---|---|---|
| March 12, 2024 | Five labor unions file Section 301 petition | — |
| April 22, 2024 | USTR initiates investigation | 89 FR 29424 |
| January 16, 2025 | USTR report finds China's actions "unreasonable" | 90 FR 8089 |
| February 27, 2025 | Proposed action: fees up to $1.5M per port call | 90 FR 10843 |
| April 17, 2025 | Final determination with scaled-back fees | 90 FR 17114 |
| June 12, 2025 | Proposed modifications to Annexes III and IV | 90 FR 24856 |
| September 16, 2025 | CBP Tonnage Tax Modernization rule | 90 FR 44512 |
| October 3, 2025 | CBP issues payment guidance (TIN #66426145) | — |
| October 14, 2025 | Fees take effect; China announces retaliation | — |
| November 10, 2025 | One-year suspension following Trump-Xi deal | TIN #66748711 |
| November 9, 2026 | Suspension expires (fees may resume) | — |
Understanding your rights under customs law requires understanding its origins. The U.S. Customs Service was the first federal law enforcement agency, established by the First Congress in 1789. For over a century, customs duties were the primary source of federal revenue—until the income tax amendment of 1913.
The Constitution gives Congress exclusive power to "lay and collect Taxes, Duties, Imposts and Excises" (Art. I, § 8, Cl. 1) and to "regulate Commerce with foreign Nations" (Art. I, § 8, Cl. 3). The Tonnage Clause (Art. I, § 10, Cl. 3) restricts even Congress, prohibiting states from laying duties of tonnage without congressional consent.
These provisions reflect the Founders' concern with uniformity and fairness in maritime commerce. As Alexander Hamilton wrote in Federalist No. 11: "A nation, despicable by its weakness, forfeits even the privilege of being neutral." The customs service was designed to be strong but fair—protecting revenue while ensuring due process for trade.
Because of its unique position at the intersection of commerce and sovereignty, customs law developed robust due process protections that predate the Administrative Procedure Act of 1946 by over a century. These include:
This framework was designed for "men of trade"—ship masters, merchants, and their agents—to navigate without the necessity of counsel. Many of the most important customs precedents were established by parties representing themselves before the courts.
The Smoot-Hawley Tariff Act of 1930 (19 USC Chapter 4) remains the structural foundation of modern customs law. Though heavily amended, its core provisions governing entry, assessment, protest, and refund have endured for nearly a century. The Section 301 fees intersect this framework in novel ways, raising questions about which procedures apply.
Key Principle: Customs law has always balanced government authority with private rights. The procedures for challenging assessments are not bureaucratic obstacles—they are constitutional safeguards. CBP is bound by the Administrative Procedure Act to avoid arbitrary or capricious action, and its decisions are subject to judicial review.
The April 17, 2025 determination established three categories of fees, each assessed at the first U.S. port of entry per rotation, with a maximum of five charges per vessel annually:
| Effective Date | Fee per Net Ton |
|---|---|
| October 14, 2025 | $50/NT |
| April 17, 2026 | $80/NT |
| April 17, 2027 | $110/NT |
| April 17, 2028 | $140/NT |
Applies to vessels with Chinese operators or owned by Chinese entities (including 25% beneficial ownership threshold).
| Effective Date | Per Net Ton | Per Container |
|---|---|---|
| October 14, 2025 | $18/NT | $120/container |
| April 17, 2026 | $23/NT | $160/container |
| April 17, 2027 | $28/NT | $205/container |
| April 17, 2028 | $33/NT | $250/container |
Fee assessed is the higher of tonnage-based or container-based calculation.
$150 per CEU (Car Equivalent Unit) capacity for non-U.S.-built vehicle carriers. Modified to $46/NT in October 2025 notice.
Critical Ambiguity: The fees are labeled "service fees" under Section 301 authority, not tonnage taxes or customs duties. This creates uncertainty about which existing refund and protest procedures apply. Owners should pursue all available remedies.
Vessel owners who paid Section 301 fees between October 14 and November 10, 2025 should consider filing for refunds. The suspension announcement did not address refunds for fees already collected, but established customs procedures provide mechanisms for recovery of improperly or excessively collected charges.
The tonnage tax refund procedure provides the closest analogy:
Submit to the Customs officer who received payment. The application must be a "direct request for the refund of a definite sum, showing concisely the reasons therefor."
Vessel nationality and name; date, place, and amount of each payment; specific grounds for refund; supporting documentation.
Application must be filed within one year from date of payment. For October 2025 payments, deadline is October 2026.
If the Port Director denies the application, file a petition to the Commissioner of Customs within 30 days. Further appeal lies to the Court of International Trade within 2 years.
For excessive duties, taxes, or fees, refunds are prepared by CBP when an entry is liquidated and overpayment is found. This procedure includes interest from the deposit date. Owners should request that CBP liquidate any Section 301 fee entries with explicit determination of refund entitlement.
If fees were assessed as a "decision" by CBP (not merely self-remitted), owners may file a formal protest using CBP Form 19 within 180 days. The basis for protest would be "erroneous assessment" due to the retroactive effect of the November 10 suspension or constitutional invalidity. This path leads directly to Court of International Trade jurisdiction if denied.
Owners who can demonstrate U.S. shipbuilding commitments may qualify for remission of fees under the exemption provisions. The USTR remission process requires:
Submit remission requests directly to USTR with supporting documentation. This path is specific to Section 301 and does not require CBP involvement.
Since Section 301 fees were paid via the Pay.gov digital portal, a direct request for "Refund of Overpayment" through the Treasury Department's Bureau of the Fiscal Service may be required alongside, or in addition to, the CBP protest. Reference your original Pay.gov transaction confirmation numbers when filing.
Given the novel nature of Section 301 "service fees," it is unclear which refund procedure CBP will recognize. Owners should consider filing under multiple authorities:
Filing through all available channels creates a comprehensive record and preserves all potential remedies.
The CBP Headquarters Ruling process (19 CFR Part 177) provides a mechanism for obtaining binding guidance on the application of customs law to specific transactions. This procedure is designed to be accessible without legal counsel and has been used for over a century to clarify ambiguous regulations.
Request guidance on a proposed or anticipated transaction. The ruling binds CBP to the stated position if the transaction occurs as described.
When an importer or interested party disagrees with a field office about the application of law to a current transaction, either party can request that Headquarters provide binding guidance.
The Section 301 fees present numerous ambiguities that could be addressed through the HQ ruling process:
"Advice furnished by the Headquarters Office in response to a request therefor represents the official position of the Customs Service as to the application of the Customs laws to the facts of a specific transaction." (19 CFR § 177.11(b)(5))
Within 90 days, CBP must publish the ruling in the Customs Bulletin, making it available as precedent for similar cases.
Historical Note: The CBP ruling system contains precedents dating back decades. Owners can use CBP's own prior rulings to support arguments about the proper scope and application of fees. The CROSS database (rulings.cbp.gov) contains thousands of searchable rulings.
If administrative remedies fail, the U.S. Court of International Trade provides judicial review of CBP decisions. This court, established by the Customs Courts Act of 1980, has exclusive jurisdiction over most trade-related matters.
The protest is the cornerstone of customs administrative remedies. Under Section 1514, customs decisions become "final and conclusive upon all persons" unless:
Written protest filed within 180 days of the decision (liquidation or fee assessment). Must identify the decision contested and grounds for objection.
For novel legal questions, request that CBP Headquarters review the protest. This is similar to the HQ ruling process but applies to completed transactions.
CBP must rule on protests within 2 years. Denial, in whole or in part, triggers the right to judicial review.
File civil action within 180 days of protest denial (or 2 years from cause of action for some matters). The court applies APA standards of review.
Under the Administrative Procedure Act, courts will set aside agency action that is:
Following Loper Bright Enterprises v. Raimondo (2024), courts no longer defer to agency interpretations of ambiguous statutes. CBP's interpretation of Section 301 authority is subject to de novo review.
The CIT has jurisdiction under 28 USC § 1581 over:
For Section 301 fees, which do not fit neatly into traditional tariff categories, § 1581(i) may provide the jurisdictional basis for challenge.
The Section 301 fees present multiple grounds for legal challenge. These arguments can be raised in HQ ruling requests, protests, and ultimately in court.
Article I, § 10, Cl. 3 prohibits tonnage duties without congressional consent. In Polar Tankers, Inc. v. City of Valdez, 557 U.S. 1 (2009), the Supreme Court held that taxes calculated based on vessel capacity constitute tonnage duties. The Section 301 fees, assessed on a per-net-ton basis, walk directly into this prohibition.
"The Tonnage Clause was designed to prevent states from favoring their own vessels, but its restriction on capacity-based charges reflects a broader constitutional concern with the taxation of vessels as vehicles of commerce."
Under Gibbons v. Ogden, 22 U.S. 1 (1824), Congress's power over commerce is exclusive. The fees burden foreign commerce based on ownership nationality in ways that may require more specific congressional authorization than the general delegation in Section 301.
The ownership determination criteria (25% PRC ownership threshold) and undefined terms (CEU capacity) may fail to provide fair notice as required by the Fifth Amendment. FCC v. Fox Television Stations, 567 U.S. 239 (2012).
Article I, § 9, Cl. 5 provides: "No Tax or Duty shall be laid on Articles exported from any State." The Annex II fees, calculated on a per-container basis, may constitute a de facto tax on exports. In United States v. U.S. Shoe Corp., 523 U.S. 360 (1998), the Supreme Court held that the harbor maintenance tax—an excise on port use measured by cargo value—could not constitutionally be applied to exports.
The key distinction is between a prohibited "tax" and a permissible "user fee." A user fee must be "designed as compensation for government-supplied services, facilities, or benefits." The Section 301 fees are not compensation for services—they are punitive measures designed to change behavior. This punitive character likely disqualifies them as user fees, exposing them to Export Clause challenge when applied to vessels loading export cargo.
Section 301 authorizes "fees or restrictions on the services of" the foreign country. The fees target vessels based on build location and ownership, not the provision of services. Chinese-built vessels owned by European companies and operated under Panamanian flag provide no "service of China."
International maritime law, incorporated into U.S. law through Lauritzen v. Larsen, 345 U.S. 571 (1953), recognizes that "the nationality of a vessel is determined by the flag she flies." Fees based on ownership rather than flag conflict with this established doctrine.
The 1980 agreement, as extended, provides for most-favored-nation treatment in port charges. The discriminatory fees may violate these treaty obligations. While Section 301's "notwithstanding" clause may provide domestic override, treaty breach has international consequences.
The fee structure's complexity, undefined terms, and reliance on operator self-assessment without clear guidance may constitute arbitrary agency action.
While USTR held public hearings, the final fee structure differs significantly from the proposal without explanation for all changes. This may violate notice-and-comment requirements under APA § 553.
The tradition of maritime participants defending their rights in U.S. courts extends to the earliest days of the Republic. Ship masters and owners have argued customs cases before the Supreme Court since the 1800s, often representing themselves.
In The Apollon, 22 U.S. 362 (1824), the Supreme Court established fundamental principles of customs jurisdiction. Chief Justice Marshall held that customs authority is territorial—extending only to the nation's waters and ports. This case, arising from a seizure dispute, established limits on customs overreach that remain relevant today.
In Smith v. Turner and Norris v. City of Boston, 48 U.S. 283 (1849), ship owners challenged state taxes imposed on passengers arriving by vessel. The Supreme Court struck down these taxes as violations of federal commerce power, establishing that states cannot burden maritime commerce with their own charges.
The Supreme Court in Cannon v. New Orleans, 87 U.S. 577 (1874), held that municipal charges on vessels, however denominated, constitute tonnage duties if calculated based on vessel capacity. The Court looked to substance over form—a principle directly applicable to the Section 301 "service fees."
The customs protest and ruling systems were designed for participation by trade professionals, not just lawyers. Many landmark rulings arose from requests filed by vessel agents, importers, and ship masters who understood their trades better than any attorney could.
CBP's CROSS ruling database contains decisions dating back decades, many addressing the same fundamental questions now raised by Section 301:
Lesson of History: The American customs system was built on the premise that those engaged in trade have the knowledge and standing to challenge government action. You do not need a lawyer to file a ruling request or protest. The procedures exist precisely to enable direct participation by affected parties.
Review vessel ownership structure, build location, and operation. Document exemption eligibility (MSP enrollment, short-sea shipping, size thresholds).
File ruling request under 19 CFR § 177.2 for prospective guidance on fee applicability. This creates binding precedent if CBP agrees with your position.
If required to pay, do so "under protest" and file formal protest under 19 USC § 1514 within 180 days. Request Application for Further Review to escalate to Headquarters.
If CBP denies protest, file civil action in Court of International Trade within 180 days. Consider coordinating with other affected owners for consolidated litigation.
USTR has opened a comment docket (USTR-2025-0017) regarding the suspension. Submit comments arguing for:
| Resource | URL |
|---|---|
| CBP CROSS Rulings Database | rulings.cbp.gov |
| Federal Register | federalregister.gov |
| USTR Section 301 Page | ustr.gov |
| Court of International Trade | cit.uscourts.gov |
| 19 CFR Part 177 (Rulings) | ecfr.gov |
| 19 CFR Part 4 (Tonnage Tax) | ecfr.gov |
The Section 301 maritime fees represent an unprecedented use of trade law authority. But the remedies available to challenge them are not unprecedented. They are as old as the Republic itself.
U.S. customs law was designed with checks and balances precisely because of the government's broad authority over trade. The protest system, the ruling process, the refund procedures, and judicial review in the Court of International Trade all exist to ensure that even lawful government action is applied fairly and correctly.
Ship masters argued their own cases before the Supreme Court in the 1800s. They did not need lawyers to understand their rights or to articulate why a particular charge was improper. The procedures remain accessible today.
For owners who paid fees during the brief October-November 2025 collection period, the immediate task is to file refund applications. The suspension announcement created ambiguity about refund entitlement—but ambiguity is what the ruling process is designed to resolve. If CBP cannot justify the collection, the fees should be refunded.
For the industry as a whole, the suspension is a reprieve, not a resolution. If fees resume in November 2026, the constitutional and statutory questions remain. The Tonnage Clause, flag state primacy, treaty obligations, and APA requirements do not disappear because fees are temporarily suspended.
Final Word: The American customs system embodies a fundamental principle: the government must justify its exactions. CBP cannot simply collect fees and refuse to explain the legal basis. If owners ask the right questions—through ruling requests, protests, and refund applications—CBP must answer. And if those answers are wrong, the courts will correct them. This is how the system has worked for over two centuries. Use it.