A federal court has rejected the Trump administration’s bid to slow the process of refunding billions of dollars in tariffs, which the Supreme Court previously ruled illegal.
The US Court of Appeals for the Federal Circuit has now advanced the refund process, sending the matter to a lower court for resolution.
Trump’s Justice Department had urged the Federal Circuit last Friday to proceed cautiously and impose a 90-day delay, but judges dismissed the request. The Supreme Court’s ruling on 20 February declared Trump’s extensive tariffs on most global countries unlawful, paving the way for importers who paid them to seek refunds.
By mid-December, the government had collected over $130 billion from the tariffs and could ultimately face a liability of up to $175 billion in refunds, according to calculations by the Penn Wharton Budget Model.
However, the Supreme Court’s decision offered no guidance on refunds, not even mentioning them. The US Court of International Trade in New York will now determine how the complex refund process should proceed.
"I would expect the Court of International Trade to quickly issue an order requesting a status update from the government on their plans with respect to refunds (or expedited briefing)," said trade lawyer Ryan Majerus, a partner at King & Spalding and a former US trade official.
"I expect the court to take an aggressive posture, asking the government to justify how they intend to comply with the Supreme Court’s ruling."
Siddartha Rao, a partner at law firm Hoguet Newman Regal & Kenney, noted a surge in client inquiries. "We are somewhat in uncharted territory," he stated.
The Trump administration has been seeking to implement new tariffs to replace those struck down by the Supreme Court. A key question, Rao highlighted, is how the government will finance these substantial refunds.
"Everyone is sort of cognizant of the fact that it’s not like there’s over a hundred billion dollars sitting in, you know, in a room somewhere to just cut checks," Rao explained.
"So, you know, this is a Treasury problem, and it may very well be that the administration is reimposing tariffs for the reasons that it’s cited ... it’s important for strategic trade agreements and for bargaining power and all of that. But it also might be that they need to raise revenue to pay out refunds."
