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U.S. importers, customs brokers and trade lawyers are bracing for a potentially protracted battle over tariff refunds as the Supreme Court weighs the legality of former President Donald Trump's sweeping global duties. If the court strikes down the tariffs, companies could seek as much as $150 billion in refunds for duties already paid, a process many fear will be slow and contentious.
Expectations that the court may invalidate the tariffs intensified after November arguments, during which justices across the ideological spectrum questioned whether the International Emergency Economic Powers Act of 1977 gave Trump authority to impose broad import duties. The court is expected to issue rulings this week, though it has not disclosed which cases will be decided.
Even if the tariffs are overturned, many businesses doubt refunds would come easily. "It's not in the government's DNA to give money back," said Jim Estill, chief executive of Danby Appliances, which imports products from China and other Asian countries. Estill said Danby has paid about $7 million in tariffs and worries that retailers and customers may also claim a share of any refund.
Trump was the first U.S. president to use the emergency powers law to impose tariffs, a statute traditionally reserved for sanctions and asset freezes. According to U.S. Customs and Border Protection data, the duties generated an estimated $133.5 billion between early February and mid-December, with the total now approaching $150 billion based on average daily collections.
A recent move by CBP to shift all tariff refunds to electronic payments starting in February has raised cautious optimism among importers. While the change falls short of automatic refunds, trade experts say it suggests the agency is preparing for a large-scale repayment effort if ordered by the courts.
Still, major uncertainties remain. Legal specialists note that the Supreme Court could leave refund mechanics to lower courts, potentially delaying payments further. Importers also face strict deadlines to contest liquidated entries, meaning some claims could already be barred.
To protect their positions, companies including Costco, Revlon, EssilorLuxottica, Kawasaki Motors and Yokohama Tire have filed preemptive lawsuits against CBP. Others, particularly smaller firms, are selling refund claims to hedge funds at steep discounts in an emerging secondary market.
Toymaker Basic Fun! CEO Jay Foreman said he doubts his company will recover the $6 million it paid in tariffs. Even with a favorable ruling, he expects delays. "The concern isn't whether refunds are owed," Foreman said. "It's how long it will take before anyone actually sees the money."
