IEEPA Tariff Refunds for Toy and Consumer Products Importers

The toy industry has a unique distinction in the IEEPA tariff story: the company that brought the case to the Supreme Court — Learning Resources, Inc. — is a toy company. When the Court ruled 6-3 that IEEPA tariffs were unconstitutional, it was a toy importer that made that happen. And it’s toy and consumer product importers who stand to recover some of the largest refunds relative to their revenue.

The reason is simple. The toy industry is almost entirely dependent on Chinese manufacturing. Over 80% of toys sold in the United States are manufactured in China. When IEEPA tariffs pushed duty rates to 34%, 54%, and eventually 145% on Chinese goods, toy companies absorbed costs that fundamentally threatened the viability of their businesses. Margins in the toy industry typically run 5-15% on branded products and even thinner on private label. A 34% tariff on a product with a 10% margin doesn’t just reduce profit — it eliminates it entirely.

Now that those tariffs have been struck down, the recovery opportunity for toy and consumer product importers is substantial. But the window to file is not unlimited, and the process has nuances specific to this industry.

Toy Industry IEEPA Exposure: By the Numbers

To understand the scale of what’s recoverable, consider the tariff timeline as it applied to Chinese imports:

A mid-size toy importer bringing in $20 million in Chinese goods annually would have paid anywhere from $2 million to $29 million in IEEPA tariffs depending on when shipments cleared customs. Even at the post-pause rate of 30%, that’s $6 million in duties that are now refundable.

HTS Chapter 95: Where Most Toys Live

Most toys are classified under HTS Chapter 95 — specifically headings 9503 (dolls, toys, puzzles, models) and 9504 (video games, arcade equipment, playing cards). These headings were covered by the IEEPA tariff provisions under HTS 9903.01 (fentanyl tariffs) and 9903.01 (reciprocal tariffs).

But not every consumer product is in Chapter 95. Here’s where common toy-adjacent products are classified:

Each of these may have a different IEEPA rate and a different recovery timeline. If your product line spans multiple chapters, your Impact Assessment needs to evaluate each HTS classification separately.

The Seasonal Import Pattern Problem

Toy importers don’t import evenly throughout the year. The industry has one of the most pronounced seasonal patterns in all of consumer goods. The bulk of annual imports arrive between June and October to stock shelves for the holiday season.

This seasonal concentration creates a specific challenge for IEEPA recovery: a disproportionate share of your annual import volume may have cleared customs during a narrow window when rates were at a particular level. If your holiday inventory arrived in July-September 2025, when the effective IEEPA rate was 30% (post-pause), your refund calculation is straightforward. If some shipments arrived in April-May 2025 before the pause, those entries may have been assessed at rates as high as 145%.

Why Seasonal Patterns Affect Your Deadline

The seasonal import spike also means a seasonal spike in liquidation dates — and therefore a seasonal spike in protest deadlines. If 60% of your annual entries were filed between July and September 2025, those entries will liquidate roughly between May and July 2026, and the 180-day protest windows will expire roughly between November 2026 and January 2027.

That sounds like plenty of time. But here’s the catch: if you have hundreds of entries liquidating within a three-month window, you need to have your documentation, broker coordination, and filing strategy ready before the first deadline hits. Filing hundreds of protests in a compressed window requires preparation that starts now.

See our 180-day protest window guide for deadline calculation methodology.

CPSC, Safety Testing, and the Tariff Recovery Intersection

Toy imports are subject to Consumer Product Safety Commission (CPSC) regulations, including mandatory third-party testing for lead, phthalates, and other hazards. This regulatory layer doesn’t directly affect your tariff refund eligibility, but it does affect the documentation chain.

CPSC testing costs are separate from duty costs and are not refundable through the IEEPA recovery process. However, the entry documentation that supports your CPSC compliance — General Certificates of Conformity (GCCs), test reports, and entry summaries — often contains the same data points needed for tariff recovery. If you’ve maintained CPSC compliance files for your entries, you likely have much of the documentation already organized.

Where CPSC Testing Does Matter

One area where CPSC intersects with tariff recovery is in product classification disputes. If CBP reclassified any of your imports during the IEEPA period (for example, reclassifying an item from a non-dutiable heading to a dutiable one), the reclassification may have also affected your IEEPA duty assessment. Classification disputes that were resolved during the tariff period should be reviewed as part of your recovery analysis to ensure the IEEPA refund amount reflects the correct HTS code.

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Learning Resources: The Case That Changed Everything

It’s worth understanding the case that made all of this possible, because it underscores why the toy industry’s exposure was so significant.

Learning Resources, Inc. is a Vernon Hills, Illinois-based educational toy company. Their products — math manipulatives, science kits, classroom supplies — are manufactured almost entirely in China. When IEEPA tariffs took effect, Learning Resources faced a duty burden that exceeded their annual profit margin. They joined a coalition of importers challenging the tariffs and became the lead plaintiff.

The core legal argument was straightforward: the International Emergency Economic Powers Act authorizes the President to regulate “economic transactions” with foreign nations during a declared emergency, but it does not authorize the imposition of tariffs or duties. The Supreme Court agreed, holding that IEEPA’s text and legislative history do not grant tariff authority.

The ruling in Learning Resources, Inc. v. Trump applies to all IEEPA tariffs, not just those on toys. But the toy industry’s total dependence on Chinese manufacturing meant toy companies were among the hardest hit — and now stand to be among the biggest beneficiaries.

Private Label vs. Branded: Different Recovery Dynamics

Toy importers generally fall into two categories, and the recovery dynamics differ:

Branded Toy Companies (Mattel, Hasbro, Spin Master, etc.)

Large branded toy companies are typically the importer of record on their entries. They work with established customs brokers, have sophisticated supply chain teams, and maintain detailed entry records. The recovery process for these companies is primarily a data consolidation exercise — pulling entry data across multiple brokers and product lines, mapping each entry to its IEEPA exposure, and filing through the appropriate recovery path.

The scale of recovery for major toy companies can be enormous. A company importing $500 million annually from China at a blended IEEPA rate of 30% has approximately $150 million in refundable duties. Even for large companies, that’s a material number that affects quarterly earnings.

Private Label and Smaller Importers

Smaller toy companies and private label brands (the companies making store-brand toys for retailers) face a different challenge. They may have used multiple brokers, changed sourcing arrangements during the tariff period, or had entries filed by trading companies acting as IOR.

If a trading company was the IOR, the refund rights technically belong to the trading company. Recovering your share requires a written agreement or assignment. This is a common scenario in the toy industry, where many small brands use Hong Kong or Shenzhen-based trading companies to manage their imports.

If you’re unsure who the IOR is on your entries, that’s the first thing to determine. Your Impact Assessment will identify the IOR for each entry and flag any entries where coordination with third parties is needed.

Product Categories With the Highest Recovery Potential

Not all toy categories have equal IEEPA exposure. The categories with the highest recovery potential are those with the highest import values and the most concentrated China sourcing:

Action figures and dolls — Almost entirely China-sourced. Average import values of $3-8 per unit mean high entry counts. HTS 9503.00.

Building sets and construction toys — China dominates manufacturing. LEGO is a notable exception (produces in Mexico, Hungary, and China). HTS 9503.00.

Electronic learning toys — Higher per-unit values ($20-100+) combined with near-total China sourcing. These often have the highest per-entry IEEPA assessments. HTS 9503/8543.

Outdoor and ride-on toys — Large, heavy items with high landed costs. A single container of ride-on toys can have an entry value exceeding $100,000, making the per-entry IEEPA refund significant. HTS 9503/9506.

Arts and crafts kits — Multi-component products classified under various HTS chapters. Recovery requires careful classification review. Various HTS.

For a broader view of how to calculate your refund amount across multiple product categories, our calculation guide provides the methodology.

Sourcing Shifts and What They Mean for Recovery

During the IEEPA tariff period, many toy companies explored alternative sourcing — moving production to Vietnam, India, or Mexico. But in the toy industry, those shifts are slower than in other categories. Tooling for injection-molded plastic toys costs hundreds of thousands of dollars, and moving tooling to a new factory takes 6-12 months for qualification and safety testing.

Companies that successfully shifted some production out of China during the tariff period may have a split portfolio: China-origin entries subject to IEEPA tariffs at 30%+, and Vietnam-origin entries subject to IEEPA reciprocal tariffs at 10-46% (depending on timing). Both are refundable, but the rates and recovery amounts differ.

Companies that attempted to shift but ultimately continued importing from China — which was the majority — have a cleaner recovery picture. All their entries are from a single country of origin with a consistent (if frequently changing) IEEPA rate schedule.

If you’re working with a partner network to explore sourcing alternatives for the future, our partner program connects importers with trade advisors who can evaluate both recovery and forward-looking strategy.

How to Calculate Your Toy Industry IEEPA Refund

Here’s a simplified calculation framework for toy importers:

Step 1: Determine your total import value from China between February 4, 2025, and February 24, 2026.

Step 2: Identify the IEEPA rate applicable to each entry based on the entry filing date (see rate table above).

Step 3: Multiply each entry’s customs value by the applicable IEEPA rate to get the IEEPA-specific duty paid.

Step 4: Subtract any Section 301 tariffs that were also assessed. Section 301 tariffs on most toys (List 4A at 7.5%) remain in effect and are NOT refundable.

Step 5: The remainder is your IEEPA refund potential.

Example: A toy company imported $10 million in goods from China between July and September 2025. The IEEPA rate was 30%. Section 301 List 4A rate is 7.5%.

• IEEPA tariffs paid: $10M × 30% = $3,000,000
• Section 301 tariffs (not refundable): $10M × 7.5% = $750,000
• Total IEEPA refund potential: $3,000,000

This is a simplified example. The actual calculation requires entry-level analysis because rates varied by date and some products may have been on different Section 301 lists (or not on any list). The complete guide to IEEPA tariff refunds walks through the full methodology.

Seasonal Pricing Pressure and the Refund Opportunity

The toy industry operates under extreme pricing pressure. Retailers negotiate pricing for the holiday season months in advance — typically in the February-April timeframe for Q4 delivery. During the IEEPA tariff period, toy companies had to make pricing decisions without knowing whether tariffs would be temporary or permanent, and without knowing whether rates would increase or decrease.

Many toy companies absorbed part of the tariff cost to remain competitive, while passing through the remainder as price increases. This created a margin squeeze that affected the entire supply chain, from manufacturers to retailers to consumers.

The IEEPA refund unwinds part of that squeeze. If you absorbed $3 million in IEEPA tariffs to keep retail pricing competitive, the refund restores that $3 million to your bottom line. If you raised prices and lost volume as a result, the refund still recovers the tariffs paid on the units you did sell.

Inventory Valuation and the Refund

Toy companies that capitalized tariff costs into inventory valuation face an accounting adjustment when the refund is received. If your inventory was carried at a cost that included IEEPA tariffs, the refund effectively reduces the historical cost basis of that inventory. For goods already sold, this shows up as a reduction in cost of goods sold for the period when the refund is recognized. For goods still in inventory, the carrying value should be adjusted.

Your controller or CFO should work with your auditors to determine the appropriate accounting treatment. The CFO guide to IEEPA recovery provides a framework for these decisions.

Common Mistakes Toy Importers Make

Waiting for the CAPE portal. CBP is building a centralized refund portal, but you don’t need to wait for it. Protests and PSCs can be filed now through existing channels. Waiting for the portal risks missing protest deadlines on early entries.

Overlooking accessory and component entries. If you import packaging, display materials, or promotional items alongside your toy products, those entries may also carry IEEPA tariffs. A toy company’s total exposure often includes entries beyond the core toy products themselves.

Not verifying HTS classifications. Toy products are frequently misclassified. A misclassification doesn’t prevent you from filing a refund claim, but it can affect the amount. If your product was classified under a heading with a different Section 301 rate, the IEEPA-only portion of your refund will differ from what you’d expect.

Filing without separating tariff layers. If your product is on Section 301 List 4A (7.5%), you need to subtract that from your total duty calculation. Only the IEEPA-specific portion is refundable. Filing for the full duty amount will result in partial denial and processing delays.

What Toy Importers Should Do Now

The recovery process won’t happen automatically. CBP is building the CAPE portal to process refunds, but importers need to take active steps to protect their claims — especially filing protests on liquidated entries before the 180-day window expires.

Immediate actions:

1. Pull your entry data. Request ES-003 reports from your customs broker(s) for all entries between February 4, 2025, and February 24, 2026.
2. Check liquidation status. Identify which entries have liquidated and calculate protest deadlines.
3. File protective protests. For any liquidated entry within the 180-day window, file a protest referencing Learning Resources, Inc. v. Trump.
4. Request a PSC for entries that are still unliquidated — this is the fastest path to recovery.
5. Get an Impact Assessment. A professional analysis maps every entry to the right recovery path and quantifies your total refund.

The toy industry made this ruling happen. Make sure your company benefits from it.