tariff refund – A federal judge pressed U.S. Customs and Border Protection on how quickly it will refund billions in tariff payments after the Supreme Court ruled President Donald Trump’s higher “reciprocal” tariffs were imposed illegally. The dispute turns on whether refunds
NEW YORK — By the time the hearing reached the question of who will be allowed into the next phase of tariff refunds, it wasn’t just about money on a ledger. It was about access: which businesses get moved first, which are paused, and how long the government can keep importers waiting.
Court of International Trade Judge Richard Eaton questioned a U.S. Customs and Border Protection official Tuesday about the government’s refund process for billions of dollars in tariffs that importers paid before the Supreme Court ruled that President Donald Trump illegally imposed higher duties on goods from most other countries.
Eaton said he wanted details that would help him decide whether to order the government to speed up and expand its system for issuing tariff refunds. He praised the online system that CBP developed to process refund claims. saying it was working well and that he believed the government wanted to return all of the import tax money it collected without constitutional authority to do so.
But the judge also pointed to a Justice Department appeal of Eaton’s orders—an appeal that. in the government’s view. affects who is eligible for immediate refunds. Eaton said during the 90-minute hearing that “sometimes lawyers push legal positions beyond what is useful for the client. ” adding that “the legal position pushed by the government may not be in the government’s best interest.”.
The government’s position is that only companies that were parties in any of the more than 4,000 lawsuits challenging the legal mechanism Trump used to set higher tariff rates are entitled to seek refunds. That question is now in the hands of the U.S. Court of Appeals for the Federal Circuit.
Eaton’s order and the refund system CBP built
The first phase of the refunds is still ongoing. Eaton ordered Customs and Border Protection in March to create a system by which “all importers of record” could apply for their share of the $166 billion CBP estimated it had collected before the Supreme Court struck down the global tariffs. Eaton allowed CBP to roll out the system in phases while the agency developed the technology to handle various kinds of refund claims.
CBP launched its online system on April 20 and said it would first review applications from importers whose tax bills had not been finalized. Eaton scheduled Tuesday’s hearing to help him decide whether to compel CBP to refund all the money the government owes immediately or give the agency more time.
Eaton had directed CBP Commissioner Rodney Scott to appear in court to discuss the agency’s timeline for complying with Eaton’s “universal” order. The Justice Department objected and asked whether one of Scott’s deputies could attend instead.
When Eaton insisted on hearing directly from the head of the agency. the Justice Department appealed both the mandate that Scott appear and Eaton’s broader ruling on refund eligibility. Last week. the Federal Circuit temporarily suspended the requirement for Scott to testify. and Susan Thomas—CBP’s executive assistant commissioner for trade—appeared before Eaton in his place.
What the next phase looks like, and who gets in
The hearing focused on CBP’s capability and willingness to open the refund process to companies with tariff payments dating back the farthest.
Claims for refunds totaling $90 billion had been accepted for processing as of Tuesday. CBP has directed the Treasury Department to issue $23 billion in refunds, Thomas told the judge.
So far, CBP has limited applications to businesses that either did not have their tax bills finalized by the time the Supreme Court invalidated Trump’s “reciprocal” tariffs in late February, or whose bills had been settled within the preceding 80 days.
Thomas told Eaton that CBP was developing a way to handle refunds involving older shipments, and that the work was likely to be finished by the end of July. But she said CBP would not process cases beyond the 80-day window while Eaton’s order requiring refunds for all duty payers is on appeal.
“I can’t speak to the appeal, but I can tell you I will be prepared,” Thomas said. “I am pushing our teams to the limit.”
The government argued it wasn’t necessary to hasten the process by enforcing Eaton’s order. Lawyers said the appeal involves 6.9% of the $166 billion collected. and that the vast majority of taxed imports eligible for refunds can either be processed by the existing system or are part of pending lawsuits.
Five companies challenging eligibility said the money still matters
Lawyers for the five companies behind the lawsuit that produced Eaton’s order said $11 billion was still a lot of money. They argued it would be unconstitutional for them to pay less tariffs than other companies that also paid the invalidated duties.
The Supreme Court held Trump improperly imposed the higher tariffs by citing an emergency powers law to usurp Congress’ taxmaking authority.
One of the plaintiffs’ lawyers suggested a possible solution: Eaton could certify their case as a class action on behalf of “potentially tens of thousands of identically situated importers.”
Eaton said that question would need to wait for another time. He did not issue any rulings Tuesday. He also said it would be disappointing if the dispute pushed the court “into the world of class action” instead of allowing CBP to make progress that would ultimately accomplish the goal of his broad order requiring refunds for all.
“Let the Customs and Border Patrol be the Customs and Border Patrol,” Eaton said. “Let them do their job, let them do what I believe the government actually wants to do.”
U.S. Customs and Border Protection tariff refunds Court of International Trade Richard Eaton Rodney Scott Susan Thomas Supreme Court reciprocal tariffs Donald Trump Justice Department appeal Federal Circuit
So basically CBP is dragging their feet on refunds? Like how is it taking this long when the Supreme Court already said it was illegal.
Wait I thought reciprocal tariffs were the whole point to protect jobs, not “illegal.” If it’s illegal, why are they even making people wait for money back. Seems backwards.
I don’t get what “eligibility” even means here. Is it like you have to be a certain company size or have the right paperwork from like 2020? My cousin imports stuff and he said the forms are impossible.