A federal judge delivered a significant blow to the former Trump administration Wednesday, ordering that businesses who paid import duties later invalidated by the Supreme Court must receive their money back.
U.S. Court of International Trade Judge Richard Eaton determined that “all importers of record” should “entitled to benefit” from last month’s Supreme Court decision that eliminated the substantial import duties former President Donald Trump had established under the 1977 International Emergency Economic Powers Act (IEEPA).
In his decision, Eaton declared that he exclusively “will hear cases pertaining to the refund of IEEPA duties.” This provides much-needed guidance on how tariff refunds will be processed, an issue the Supreme Court failed to address in its February 20 decision. Trade attorney Ryan Majerus from King & Spalding, who previously served as a U.S. trade official, anticipates the government will appeal or “seek a stay to buy more time for U.S. Customs to comply.”
The federal government accumulated over $130 billion from these now-invalidated tariffs by mid-December, and according to Penn Wharton Budget Model estimates, could face refund obligations totaling $175 billion.
The judge’s decision specifically addressed a lawsuit filed by Atmus Filtration, a Nashville, Tennessee-based manufacturer of filters and filtration equipment, seeking tariff refund rights.
Earlier this week, another federal court blocked the Trump administration’s efforts to delay the refund timeline. The U.S. Court of Appeals for the Federal Circuit advanced the refund process by transferring it to the New York trade court for resolution.
The U.S. Customs and Border Protection agency now faces the challenge of developing a refund processing system. While Customs regularly handles tariff refunds for errors, its current infrastructure was “not designed for a mass refund,” explained trade attorney Alexis Early from Bryan Cave Leighton Paisner. “The devil will be in the details of the administrative process.”
