Federal Judge Orders Refunds for Tariffs Struck Down by Supreme Court

A federal judge has ordered the U.S. Customs and Border Protection to issue refunds for tariffs that were struck down by the Supreme Court last month. The ruling, issued by Judge Richard Eaton of the U.S. Court of International Trade on Wednesday, affects thousands of businesses that paid levies under the International Emergency Economic Powers Act (IEEPA).

"All importers of record whose entries were subject to IEEPA duties are entitled to the benefit" from the high court's ruling, Judge Eaton wrote. The decision marks a significant setback for President Donald Trump, who has been moving to replace the import taxes and expressed concerns over refunds.

The case was specifically brought by Atmus Filtration, a Tennessee-based filtration company, but the judge stated that he would be the sole arbiter of any future cases related to these refunds. The payment process remains unclear, as Customs and Border Protection's system is not designed for mass refunds.

US Treasury Secretary Scott Bessent indicated that the US was "likely" to implement a 15% global tariff this week, up from 10%, following conflicting statements from President Donald Trump about the new rate. This tariff is intended to replace those struck down by the Supreme Court.

The Trump administration had collected an estimated $130 billion from these tariffs imposed on most goods imported into the US through IEEPA. Companies such as FedEx have filed lawsuits seeking full refunds of these tariffs. Dan Anthony, with We Pay the Tariffs, a small-business coalition formed to seek refunds, called the decision a "victory" in a statement.

Significant questions remain about what US import tax policies will look like going forward. Last April, Trump announced "Liberation Day" tariffs on dozens of countries with rates starting at 10% and climbing toward 50%. The Supreme Court's judgment struck down these tariffs last month.

Importers seeking their share of more than $130 billion in tariff refunds are flocking to the U.S. Court of International Trade, which must now figure out how to deal with what is expected to be an explosion of cases. Multinationals such as FedEx and L'Oreal, along with hundreds of smaller companies, have filed around 2,000 lawsuits seeking refunds for tariffs imposed last year by President Donald Trump.

The Supreme Court did not address refunds, leaving that to customs officials and the eight active judges on the trade court. Lawyers for five of the plaintiffs suggested in a February 24 court filing that their lawsuits should serve as test cases to determine how the refunds will be calculated and issued.

The federal government is estimated to owe American businesses up to $175 billion in tariff refunds after the Supreme Court struck down much of the Trump administration's import duties last month. However, delays in providing these refunds could cost U.S. taxpayers an additional $700 million per month in interest payments, according to a new analysis from the Cato Institute.

A federal appeals court on Monday declined to delay implementation of the Supreme Court ruling that invalidated most of President Trump's tariffs, allowing next steps in processing of tariff refunds to begin swiftly. The decision clears the way for the lower court, the U.S. Court of International Trade, to begin crafting relief for small businesses.

The White House was expected to appeal the order, preventing it from taking effect immediately. Justice Department lawyer Claudia Burke told Eaton that the Trump administration had yet to take a formal position on tariff refunds. At that point, Eaton grew impatient, telling Burke: "Your position is clear. The Supreme Court told you what your position is."

Burke said that the process of refunding tariffs would be time-consuming for CBP since the agency would have to manually go through millions of import entries. "We live in the age of computers," Eaton said. "It must be possible for Customs Service to program its computers so it doesn’t need a manual review."

Nunzio De Filippis, a customs broker, cautioned that Eaton’s order doesn’t guarantee refunds yet. "The courts still need to figure out the mechanics of how this actually gets unwound," De Filippis said. "My message to the trade community is to chill out. There’s still a whole process to figure out."

Companies were already lining up at the trade court seeking refunds before the Supreme Court issued its stunning ruling. The justices struck down the tariffs but did not address whether the government must return the money, leaving the Court of International Trade to determine how repayments should be handled.

The government has sent mixed signals about the matter. Shortly after the Supreme Court ruling, Trump criticized justices for failing to clarify whether the government could keep the money. "Wouldn’t you think they would have put one sentence in there, saying: ‘Keep the money,’ or ‘Don’t keep the money,’ right?" the president told reporters. "I guess it has to get litigated for the next two years."

Government lawyers previously told lower courts that companies could be “made whole through a refund, including interest” if the tariffs were ultimately ruled unlawful.