NEW YORK (AP) Businesses, both large and small, are beginning to receive tariff refunds after the U.S. Supreme Court ruled that President Donald Trump did not have the constitutional authority to impose elevated import taxes on goods from nearly all countries. Following this ruling, many companies that paid the now-invalidated tariffs started submitting claims through an online system managed by U.S. Customs and Border Protection (CBP).
However, the refund process may face significant delays as the Trump administration announced plans to appeal a federal judge's order that would permit all companies that paid the tariffs to seek refunds, rather than just those that had filed lawsuits. This potential appeal could hinder the system that had previously started operating effectively, as refunds had begun reaching the bank accounts of the first successful applicants on May 12, approximately three weeks after importers could submit their claims.
According to CBP, refund applications totaling $85 billion had been accepted for processing as of May 22. This amount represents more than half of the total $166 billion the agency estimated the government owed to companies that had paid the tariffs on imported goods. So far, the Treasury Department has been directed to issue about $20.6 billion in refunds.
The administration's announcement regarding the appeal came alongside objections to Judge Richard K. Eaton's request for CBP Commissioner Rodney Scott to appear in the U.S. Court of International Trade. The judge sought clarity on how long it would take to repay all 330,000 importers who might be eligible for refunds. A hearing has been scheduled for June 9 to discuss the government's obligation to expedite the repayment process.
Justice Department lawyers requested that Judge Eaton allow one or two deputies of Commissioner Scott to appear in his absence, arguing that a high-ranking presidential appointee like Scott should not be compelled to testify. They contended that Eaton had overstepped his authority by determining that the Supreme Court's ruling entitled "all importers of record" to refunds. The lawyers stated, "For that reason, defendants intend to appeal the court's universal injunction," and emphasized that CBP would continue to process refunds as quickly as possible for the businesses involved in the approximately 485 pending trade court complaints.
In a direct response, Judge Eaton emphasized the necessity of hearing from Commissioner Scott regarding the government’s commitment to refunding all unlawfully collected duties. The judge underscored the substantial amount at stake, raising concerns over the government's obligations in this case which involves a total of $166 billion in refunds.
National retail chains have indicated their intentions to use the tariff refunds to lower prices for customers on certain products. Walmart's Chief Financial Officer, John David Rainey, mentioned in a recent analyst call that the company would implement price cuts, despite the maximum refund amount being less than 0.5% of Walmart's annual sales of $483 billion in the U.S.
Smaller companies expressed various plans for using the refund money they received, with many indicating that their partial refunds would contribute to paying off remaining tariffs, reducing debt, or simply maintaining operations after enduring over a year of heightened import costs. Jay Foreman, CEO of the toy company Basic Fun, stated he received about $450,000, which was only 7% of his total claim, over two consecutive days earlier this month. Although he regarded the initial repayment as a good sign, he later noted that the process appeared to be sluggish with less than $10,000 refunded since then.
"It’s time to release the funds back into the economy, especially given how much we and others need these funds to support our businesses and fund our operations," Foreman remarked, highlighting the urgency felt by many businesses relying on these refunds to recover from the financial impacts of the tariff disputes.
