Trade Court Rules Importers are Due U.S. Tariff Refunds, With Interest

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Written by John Egan for IIR News Intelligence (Sugar Land, Texas)

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Summary

A federal trade court has ordered the U.S. government to refund, with interest, all levies paid by importers under a 1970s-era law used by the president but recently struck down the U.S. Supreme Court.

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Trade Court Orders Government to Refund IEEPA Levies

In a ruling on Wednesday, Judge Richard Eaton of the International Court of Trade ordered the U.S. government to refund, with interest, all levies paid by all importers over the last year under a presidential executive order that the U.S. Supreme Court struck down February 20.

At stake could be as much as $134 billion, plus interest. U.S. Customs and Border Protection (CBP), recently said it had collected about $133.5 billion in tariffs through mid-December that the president had levied under the International Economic Emergency Powers Act (IEEPA), a 1970s-era law that does not mention tariffs, taxes or any of their synonyms. The nation's high court on February 20 ruled 6-3 in Learning Resources, Inc. v. Trump that the president exceeded his authority in levying tariffs on nearly all imported goods from nearly every country in the world. For more on that decision, see February 20, 2026, article - Supreme Court Rejects Trump Tariffs under IEEPA.

However, the Supreme Court was silent on the matter of IEEPA refunds, leaving it to the CIT.

Immediately after the Supreme Court invalidated the IEEPA tariffs, President Donald Trump ordered a 10% across-the-board tariff against nearly all imported goods to remedy a longstanding U.S. trade deficit in goods. He also threatened to raise that to 15%, but that threat has not found its way into an executive order yet. For more on that, see February 27, 2026, article - Initial Reaction to New Tariffs Muted as Lawyers Assess Legality.

In a brief but pointed three-page order issued Wednesday, the trade court judge ordered CBP to liquidate "any and all unliquidated entries that were entered subject to the IEEPA duties." His decision added, "Any liquidated entries for which liquidation is not final shall be reliquidated without regard to IEEPA duties."

"Liquidation" is the process by which a company and the government finalize exactly how much must be paid in tariffs. The process can take up to a year. Collection of the IEEPA tariffs reportedly ceased February 24, days after the high court's ruling.

The lawsuit filed in the CIT, Atmus Filtration, Inc. v. United States, was submitted only about a week ago. The order applied not only to the plaintiff, an air filtration company based in Nashville, Tennessee, or even to the estimated 2,000 companies that have filed suit with that court to recover tariffs that the Supreme Court ruled were illegally collected. Instead, Eaton said any importer that paid any IEEPA levies were entitled to a refund, with interest.

Dennis Crouch, a law professor at the University of Missouri, wrote that extending relief to all importers of record that paid the IEEPA tariffs "is the most legally aggressive feature of the order. (CIT Justice) Eaton's reasoning rests on the CIT's nationwide jurisdiction and the nature of the Supreme Court's ruling in Learning Resources v. Trump: because the tariffs were held to exceed presidential authority as a matter of statutory interpretation, every importer who paid them was harmed by the same legal error. Requiring each to file a separate complaint would multiply litigation costs, burden the court's docket and produce identical outcomes in case after case."

Dan Anthony, executive director of We Pay the Tariffs, a small-business coalition formed to seek refunds, called the CIT decision a "victory. American small businesses have waited long enough. A full, fast and automatic refund process is what these businesses are owed and anything less is unacceptable."

Administration Loses One Venue of Appeal

The Trump administration is expected to appeal the CIT ruling.

In his Wednesday decision, Eaton said he would be the only judge at the CIT that would rule on any case involving refund of the IEEPA duties, adding that meant "there is no danger that another Judge, even one in this Court, will reach any contrary conclusions."

That would appear to close off one venue for the Trump administration to appeal. Now, any appeal would have to be filed with the U.S. Court of Appeals for the Federal Circuit, which sits in Washington, D.C. That court has 19 justices, none of whom were appointed by President Donald Trump. Eight of the court's justices were appointed by Trump's Republican predecessors while 11 were appointed by Democratic presidents.

It is not clear that this case contains any constitutional issue that the Trump administration could raise with the Supreme Court, assuming it loses at the federal appeal level. The Supreme Court decision in Learning Resources was categorical: Congress has the exclusive right to levy taxes, tariffs and other levies.

On Wednesday, Eaton refused to stay his own order to give the U.S an opportunity to appeal. Judges routinely pause their own orders to give losing litigants an opportunity to appeal. The judge scheduled a hearing for today to have the administration describe the mechanics of refunding the IEEPA tariffs.

According to a report in The Wall Street Journal, Eaton on Wednesday "said the repayment process should be straightforward and grew impatient when a Justice Department lawyer said the government hadn't yet formalized its position on refunding the tariffs. 'Your position is clear,' the judge said. 'The Supreme Court told you what your position is.' "

That Justice Department lawyer, Claudia Burke, said that any refund process would be time-consuming, according to the Journal report. The government agency would have to manually go through millions of import entries, she added.

"We live in the age of computers," Eaton said. "It must be possible for (the CBP) to program its computers so it doesn't need a manual review."

While FedEx has said it was willing to rebate any IEEPA tariffs collected from customers, few other companies have made that pledge. A recent study from the Federal Reserve Bank of New York and Columbia University concluded that businesses and consumers have paid about 90% of the IEEPA tariffs, with exporting nations absorbing about 10% of the effect of those tariffs through lower prices. The Trump administration has challenged that conclusion.

Trump Administration Had Said it Was Willing to Refund IEEPA Duties

In earlier court filings, the Trump administration's lawyers said that companies would be "made whole through a refund, including interest" if the IEEPA tariffs were ultimately ruled unlawful.

However, over the last year, as the administration lost successive legal challenges to the IEEPA tariffs, its rhetoric has grown more intransigent and apocalyptic.

In his State of the Union address last month, the president mused that it could take two years to settle the tariff refund issue. In earlier statements and posts to his Truth Social platform, he has claimed losing his ability to levy IEEPA tariffs as a negotiating tool could force the U.S. to unwind trillions of dollars of overseas investment in the U.S. that was linked to a waiver of the IEEPA tariffs.

Before the Supreme Court decision, Trump had been widely quoted as saying losing the ability to levy tariffs under IEEPA would be an "economic and national security disaster" that could lead to a "catastrophic collapse that would literally destroy the United States of America," turning it into a "poor nation" from the "rich nation" it is today.

Key Takeaways

• The federal Court of International Trade (CIT) ordered the Trump administration to begin refunding levies, with interest, collected from importers over the last year under the International Emergency Economic Powers Act (IEEPA).
• The Trump administration is expected to appeal the CIT decision.
• The government estimated that it has collected about $133.5 billion in tariffs through mid-December 2025 under IEEPA, which the U.S. Supreme Court last month ruled was collected unlawfully, as only Congress has the power to levy tariffs.

About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).