US Tariff Refunds in Doubt? Trump Administration Suddenly Appeals

After the U.S. Supreme Court ruled that President Trump lacked the authority to impose import tariffs on goods from nearly all trading partners, businesses across the United States began receiving tariff refunds.

However, according to The New York Times,Last Friday, the Trump administration announced plans to appeal a federal judge’s ruling that allowed all companies that had paid invalid tariffs to apply for refunds, rather than limiting refunds to those that had already filed lawsuits, a move that could stall the refund process.

Before the U.S. Department of Justice informed the court of its plan to appeal, the refund process administered by U.S. Customs and Border Protection was operating smoothly. According to Customs and Border Protection, the first successful applicants received their refunds on May 12, about three weeks after importers and customs brokers initiated their refund requests.

Legal filings submitted earlier last week by Customs and Border Protection showed that, as of May 22, it had accepted refund claims totaling $85 billion, more than half of the $166 billion it estimates the government owes businesses; so far, it has instructed the Treasury Department to issue $20.6 billion in refunds.

The government is preparing for an appeal while simultaneously objecting to Judge Richard K. Eaton's order requiring Customs and Border Protection Director Rodney Scott to appear at the U.S. Court of International Trade on June 9. The judge wants to understand how long it will take to complete refunds to all approximately 330,000 eligible importers and whether there is a need to order the government to expedite the process.

The Justice Department lawyers requested Eaton to allow Scott's deputy to attend on his behalf, stating that as a presidentially appointed senior official, the Director of Customs and Border Protection cannot be compelled to testify. They also argued that Eaton's ruling, which grants "all registered importers" the right to refunds, is an overreach of authority.

The lawyer wrote, “To that end, the defendants intend to appeal the court’s comprehensive injunction,” adding that U.S. Customs and Border Protection will continue to “process as quickly as possible, in phases,” the applications of companies that have filed lawsuits claiming a right to refunds.

Eaton responded that Scott should be directly consulted on whether the government would refund all unlawfully collected tariffs imposed from April 2025, when Trump introduced the so-called “reciprocal tariffs” on most countries, through the Supreme Court’s ruling at the end of February.

The appeal will delay the refund process.

U.S. Customs and Border Protection is processing refund claims in phases, prioritizing payments that had not been finally settled before the Supreme Court’s 6–3 ruling, saying these later estimated payments are easier to handle because they remain pending in the system.

In a filing submitted last Friday, the Justice Department said that U.S. Customs and Border Protection would need to upgrade the technology of its refund system and issue “importer-specific instructions” in each lawsuit brought by companies in order to recalculate the final duties on earlier entries whose accounts had already been liquidated.

More than a thousand companies have filed lawsuits with the Court of International Trade to recover tariff costs, but other companies covered by the Supreme Court’s refund scope have not filed suit.If the Department of Justice’s appeal is successful, companies that did not file a lawsuit may be unable to obtain refunds.

Ryan Majerus, a partner in the international trade team at King & Spalding, believes that companies that did not file lawsuits “account for only a small fraction of all companies that paid the invalid tariffs”; any appeal may affect only older batches of imported goods that have been in customs for 314 days (the period by which U.S. Customs and Border Protection formally assesses duties).

It is worth noting that Barry Appleton, a professor at New York Law School and managing partner at Appleton & Associates International Law Firm, stated that...Even if the government has “lost” in the Supreme Court, filing an appeal will still slow down the refund process.Appleton said:

If the government can freeze the refund mechanism during litigation, it can buy several months of time; for every month of delay, the Treasury can earn an extra month’s worth of interest.