A federal judge is weighing whether the U.S. government should accelerate efforts to return billions of dollars in tariffs collected before the Supreme Court ruled that higher import duties imposed under President Donald Trump were unlawful.
During a hearing in New York on Tuesday, Judge Richard Eaton of the U.S. Court of International Trade questioned officials from U.S. Customs and Border Protection (CBP) about the agency’s progress in processing refund claims from importers that paid the duties. Court proceedings focused on whether the current system should be expanded and whether refunds should be distributed more quickly.
The dispute centers on how broadly the government must apply refunds following the Supreme Court’s decision to invalidate Trump’s “reciprocal” tariffs. The ruling determined that the administration improperly relied on emergency powers legislation to impose the duties, a move the court found exceeded presidential authority over taxation.
CBP estimates that it collected approximately $166 billion under the tariff program before the Supreme Court’s decision. Judge Eaton ordered the agency in March to establish a process allowing all importers of record to seek refunds, while permitting a phased rollout as the agency developed the technology required to manage claims.
Appeal Could Determine Who Receives Refunds
Although Eaton expressed support for the refund platform developed by CBP, he raised concerns about a Justice Department appeal challenging the scope of his order.
Government lawyers are arguing that only businesses directly involved in the thousands of lawsuits contesting the tariff program should be eligible to recover funds. The question is currently before the U.S. Court of Appeals for the Federal Circuit.
During the hearing, Eaton suggested the government’s legal strategy could complicate efforts to return money collected under tariffs the courts ultimately deemed invalid.
The judge previously directed CBP Commissioner Rodney Scott to appear and discuss the agency’s implementation timeline. After the Justice Department objected and appealed that requirement, the Federal Circuit temporarily suspended the order. Susan Thomas, CBP’s executive assistant commissioner for trade, appeared on behalf of the agency.
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Refund Processing Continues in Phases
According to testimony provided during the hearing, CBP has already accepted refund claims covering approximately $90 billion in tariffs and has instructed the Treasury Department to issue about $23 billion in repayments.
The current phase of the refund process is limited to importers whose tariff obligations had not been finalized when the Supreme Court issued its decision or whose assessments became final within the previous 80 days.
Thomas told the court that CBP is developing procedures to process older claims tied to earlier shipments. She said the agency expects that capability to be completed by the end of July.
However, she also indicated that broader processing beyond the existing 80-day framework would not move forward while Eaton’s order remains under appellate review.
Thomas told the court that agency teams are preparing for eventual expansion of the program but must await legal clarity before proceeding further.
Billions of Dollars Remain at Stake
Government attorneys argued that judicial intervention to accelerate the process is unnecessary. They said the appeal concerns only a small portion of the total tariff collections and that most eligible refunds can already be handled through existing procedures or separate litigation currently underway.
Attorneys representing the companies that secured Eaton’s original ruling disagreed, arguing that the remaining disputed funds still amount to roughly $11 billion. They maintained that limiting refunds to certain importers would create unequal treatment among businesses that paid duties later deemed unlawful.
One attorney suggested that the case could eventually be certified as a class action representing a much broader group of importers if a universal refund approach is not preserved.
Judge Eaton declined to rule on that proposal during Tuesday’s hearing, indicating the issue would need to be addressed separately. He also refrained from issuing any immediate decisions regarding enforcement of his earlier order.
Trade and Administrative Implications
The case has become a significant test of how federal agencies manage large-scale tariff reimbursements following major judicial reversals of trade policy.
For importers, the outcome could determine whether companies that did not participate in earlier litigation gain access to refund claims worth billions of dollars. For the government, the dispute highlights the administrative and legal challenges involved in unwinding a tariff program after courts determine it exceeded executive authority.
While CBP continues to process eligible claims, the broader question of who ultimately qualifies for refunds remains unresolved pending review by the Federal Circuit.
Tags: Tariffs, U.S. Customs and Border Protection, Trade Policy, Importers, Donald Trump, Court of International Trade, Tariff Refunds, Federal Circuit, Treasury Department
