Administration injects new uncertainty into tariff refunds

Tax Hot Topics

Nearly a month after Customs and Border Protection (CBP) began processing court-ordered refunds of tariffs ruled illegal by the Supreme Court, the Trump administration has challenged the court order.

This move creates the possibility that refunds of certain tariff payments,  yet to be issued, will be halted, at least temporarily. Many importers could be required to file suit to claim tariff payments and interest that a federal judge has said is due to them.

Following the Supreme Court’s February ruling that the use of the International Emergency Economic Powers Act (IEEPA) to levy tariffs was illegal, the U.S. Court of International Trade (CIT) ordered CBP to begin refunding approximately $166 billion, plus interest, in revenues collected in 2025 and early 2026. While the Supreme Court ruled on the legality of the mostly country-specific tariffs, it left the issue of remedy to the CIT, which specializes in trade matters.

While the CIT order was made in relation to a protective claim lawsuit brought by a filtration manufacturing company, Atmus Filtration Technologies, Inc., the order stated that CBP should refund all tariffs levied under IEEPA, which made up the majority of the country-specific duties raised during 2025. As the Trump administration did not immediately file an appeal of that order and the CBP began refunding IEEPA tariffs in May, it appeared that the administration would accept the court order on at least most refunds.

After initially complying with that order, however, the administration has now taken the position that the CIT order was equivalent to an invalid nationwide injunction and that CBP cannot refund claims that have been liquidated — meaning cleared from the CBP system, with funds sent to Treasury — without a court order specific to each company.

In this scenario, each company with liquidated claims would be required to file suit  and receive a specific court ruling to receive a refund.  Businesses with unliquidated claims can still file refund requests with CBP showing what duties they paid for IEEPA tariffs ruled to be illegal, and estimate how much, including interest, the government owes them.

According to the May 29 filing in which the administration made this argument, nearly half the IEEPA tariff duties paid, $81 billion, have already been liquidated.  

“Once an entry is finally liquidated, CBP has no authority to reliquidate or refund money without a court order,” the Trump administration argued in its filing.

As of mid-May, CBP had refunded approximately 20% of the estimated $166 billion importers paid. In the May 29 filing, the Justice Department said that CBP could refund $85 billion of unliquidated tariff entries without a court order, though the appeal for an amended order came after the agency told the court earlier in May that it could refund only about 80% of total IEEPA tariffs paid.

Initial filings in the administration’s appeal of the order to refund IEEPA tariffs are due to the Court of Appeals for the Federal Circuit on June 17. A full brief is due Aug. 3.