Trade court orders Trump administration to jumpstart tariff refund process
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President Trump last year unveils reciprocal tariffs that were ultimately overturned by the Supreme Court. Photo: Brendan Smialowski via Getty Images
A top trade court ordered the Trump administration on Wednesday to start refunding tariffs to U.S. businesses.
Why it matters: The order is the most significant to date in what is expected to be a politically fraught, and possibly lengthy, process of getting hundreds of billions of dollars back to importers.
- It comes roughly two weeks after the Supreme Court smacked down many of the tariffs that President Trump has imposed since taking office.
What they're saying: "We want to work out a method by which those importers can make a claim for duties which were unlawfully applied," Court of International Trade Judge Richard Eaton said during a hearing on Wednesday, according to Reuters.
- The order, which the Trump administration is expected to appeal, directs U.S. Customs and Border Protection to start the refund process.
- Eaton ordered CBP to remove the International Emergency Economic Powers Act (IEEPA) tariffs — struck down by the Supreme Court last month — from pending imports where companies have already paid the duties, effectively clearing the way for refunds on those transactions.
The intrigue: The order says that all importers that "were subject to IEEPA duties were entitled to the benefit of" the Supreme Court ruling. This suggests all businesses that paid the illegal tariffs should get reimbursed, even if they don't sue to receive them.
- Thousands of businesses have already sued for assurance they would get refunds — including household name like FedEx and Dyson.
Yes, but: It's still unclear whether and to what extent consumers will benefit.
- Many firms passed along at least some tariff-related costs to consumers. But the government keeps no record of what's passed along or not.
- In recent weeks, some like FedEx have vowed to return that money to shoppers.
Zoom in: A federal appeals court earlier this week denied the Trump administration's request to delay refunds for 90 days.
- That decision allowed the Court of International Trade to start working out how refunds should be processed.
- In a earlier filing on Wednesday, top CBP official Brandon Lord said the agency would issue the refunds with interest, though he said that the government "still requires a review period to ensure no violation of other Customs laws and no other duties, taxes, or fees are owed."
Between the lines: Eaton suggested the process would not be as arduous as the government had indicated.
- "We live in the age of computers," Eaton said, per the Wall Street Journal.
- Eaton asked the government to provide updates at a hearing scheduled for Friday.
Go deeper: The companies pledging tariff refunds to customers and how to get them
