A legal battle over billions of dollars in tariff refunds is entering a new phase as U.S. Customs and Border Protection (CBP) works to implement a system for returning duties collected under tariffs that were later ruled unlawful. A federal court hearing on Tuesday is expected to provide new insight into who will ultimately qualify for refunds and how quickly the government plans to distribute the money.
Billions in Refunds Still Moving Through the System
The dispute stems from a Supreme Court decision that struck down certain tariffs imposed by President Donald Trump on imports from most countries. The ruling determined that the administration improperly relied on emergency powers to impose the duties without congressional approval.
In March, Court of International Trade Judge Richard Eaton ordered CBP to establish a process allowing “all importers of record” to apply for refunds from the estimated $166 billion collected under the now-invalid tariffs.
CBP launched its online refund portal on April 20 and initially focused on applications involving tariff bills that had not yet been finalized. As of June 1, the agency reported that refund claims totaling $89.6 billion had been accepted for processing. The agency also said it had instructed the Treasury Department to issue $20.6 billion in refunds so far.
While the process is underway, disagreement remains over how broad the refund program should become and how quickly additional claims should be reviewed.
Court Examines Government’s Refund Timeline
Judge Eaton has sought more information about CBP’s plans for complying with his order and expanding access to refunds. The issue became more contentious when the judge ordered CBP Commissioner Rodney Scott to appear in court and explain the agency’s timeline.
The Justice Department opposed the requirement and requested that a deputy appear instead. After Eaton insisted on hearing directly from the agency’s leader, government lawyers appealed both the testimony requirement and the broader ruling on refund eligibility.
The U.S. Court of Appeals for the Federal Circuit temporarily suspended the requirement for Scott to testify. Instead, Susan Thomas, CBP’s executive assistant commissioner for trade, is expected to provide testimony during Tuesday’s hearing.
Her appearance could offer important details about the government’s plans for future refund phases.
Debate Centers on Older Tariff Payments
One of the most significant questions involves businesses whose tariff payments date back the farthest.
Currently, CBP is limiting refund applications to importers whose tariff bills had not been finalized when the Supreme Court issued its ruling or whose cases were settled within the previous 80 days.
In a declaration submitted before the hearing, Thomas said the agency is developing a system capable of handling older refund claims but will not move beyond the current 80-day limit while Eaton’s broader order remains under appeal.
“Should the court’s order become final and require reliquidation of entries of all importers, CBP intends to fully comply with the court’s final decision as expeditiously as possible,” she wrote.
The issue is complicated by the customs liquidation process. Importers initially estimate duties and make deposits when goods enter the United States. CBP then reviews those entries, sometimes over several years, before determining the final amount owed. Once entries are finalized and certain protest deadlines pass, reassessing those duties becomes far more difficult.
Who Ultimately Qualifies for Refunds?
The biggest legal disagreement focuses on eligibility.
The Justice Department argues that only companies involved in the more than 2,500 lawsuits challenging the tariffs should be able to seek refunds. Judge Eaton’s earlier ruling, however, would allow all affected importers to participate.
Eaton has stated that the purpose of Tuesday’s hearing is “to ascertain if it is the government’s policy to return all of the unlawfully collected duties either by complying with the court’s order, or by some other means.”
Attorneys representing the five companies that won the original case argue that treating some importers differently would be unconstitutional because all businesses paid the same unlawful tariffs. They are seeking class-action certification that could extend relief to “potentially tens of thousands of identically situated importers.”
Legal experts believe the refund system will continue evolving while appeals move forward. Meghann Supino, a partner at the law firm Ice Miller, said she expects CBP to continue expanding its technical capabilities but noted that eligibility remains unresolved.
“Whether they open it up to non-litigants and importers that do not have orders for their own sake is going to continue to be an issue with the appeal,” she said.
Uncertainty Remains Over Final Outcome
As the appeals process continues, businesses across the country are watching closely. Billions of dollars have already been approved for refunds, but the final scope of the program remains uncertain. Tuesday’s hearing may provide greater clarity on how quickly CBP can expand its system and whether thousands of additional importers will eventually gain access to funds tied to tariffs that the Supreme Court determined were unlawfully imposed.
