President Trump to appeal order allowing importers to claim tariff refunds

Businesses large and small are starting to receive tax refunds after the U.S. Supreme Court ruled that President Donald Trump lacks the constitutional authority to impose high import taxes on goods from nearly every other country.

But the process could come to a standstill after the Trump administration announced Friday that it intends to appeal a federal judge’s order allowing it to seek refunds from all companies that paid the voided tariffs, not just the companies that filed the lawsuits.

The refund system overseen by U.S. Customs and Border Protection had been working fairly smoothly until the Justice Department notified judges of its appeal plans. CBP said refunds were deposited into the bank accounts of the first successful applicants on May 12, about three weeks after importers and their customs brokers initiated their applications.

CBP reported in a legal filing earlier in the week that as of May 22, refund applications totaling $85 billion — more than half of the $166 billion the agency estimated the government owed to companies that paid duties on imported goods — had been received for processing. So far, the government has announced that it has directed the Treasury Department to refund $20.6 billion.

While the government announced preparations for an appeal, it objected to Judge Richard K. Eaton’s request for CBP Director Rodney Scott to appear before the U.S. Court of International Trade on June 9. The judge said he wanted to know how long it would take to refund all 330,000 importers who could be eligible for refunds, and whether he should ask the government to speed up the process.

Justice Department lawyers asked Eaton to allow Scott’s attorney to appear in court, arguing that the CBP director, who is a senior presidential appointee, cannot be forced to testify. They also argued that Mr. Eaton exceeded his authority in determining that the Supreme Court’s decision entitled “all importers of record” to a refund.

“As such, Defendants intend to appeal the court’s universal injunction,” the attorneys wrote, adding that CBP will continue to work “in a phased approach to process refunds as expeditiously as possible” to companies that have filed legal complaints asserting their right to refunds.

Eaton responded that he needed to hear directly from Scott whether the government would return all the money it collected between April 2025, when President Trump imposed what he called “reciprocal” tariffs on most countries, and the Supreme Court’s decision at the end of February.

“There is no dispute that the remedy for this illegal collection is for the U.S. government to refund the illegally collected duties,” the judge said.

Customs and Border Protection is processing refund requests in phases, first focusing on payments that were not finalized before the Supreme Court’s 6-3 ruling. CBP officials said later estimated payments remain open in the system, making it easier to process.

In Friday’s filing, the Justice Department said it is requesting technical upgrades to the refund portal and “importer-specific instructions” in each case brought by companies before recalculating the final tax amount on old “liquidated” accounts.

More than 1,000 companies have filed suit in the Trade Court to recover tariff costs. It was not immediately clear how many importers who paid duties did not sue, or whether they may not receive refunds even if their appeals from Eaton’s blanket order are successful.

Ryan Majerus, a partner in the international trade team at law firm King & Spalding, said the expired tariffs “I think it’s definitely just a part of the picture, given the number of people who have paid them.” He said the appeal will likely only involve imported goods that have been in the U.S. for 314 days, the period in which the CPB issues a formal determination of unpaid duties.

“This is not for everyone, it’s only for really old entries,” Majerus said of a possible appeal.

But even if the government “already lost the war” at the Supreme Court, an appeal could delay the refund process, said Barry Appleton, a professor at New York Law School and managing partner at Appleton & Associates International Lawyers.

“If the government can freeze the refund mechanism during litigation, the government will be buying months of money, and each month of delay will be a month of money held by the Treasury,” Appleton said.

Some national retail chains said they plan to use the tax refunds to lower prices for some products for customers. walmart Chief Financial Officer John David Rainey told analysts last week that Walmart would cut prices even though the maximum refund it could receive would be less than 1% of Walmart’s annual U.S. sales.

Costco intends to refund the tariff costs it passed on to its members, CEO Ron Vacris said. How much and how much of the refunds the major retail chains redistribute will depend on factors such as the size of the refunds, when they arrive, and the development of lawsuits seeking tariff compensation for Costco customers, Vacris told investors Thursday.

Consumers may initially receive a refund from shipping companies such as: fedex, UPS DHL acted as a customs broker when shipping goods ordered from overseas.

The companies billed either the seller who shipped the package or the buyer who received the package and submitted the collected duties to CBP. All three companies have promised to pass on the refunds they receive to customers who paid the import taxes.

The Supreme Court, citing the International Emergency Economic Powers Act of 1977, invalidated only the national tariff rates set by President Trump. The president has also moved to introduce new tariffs since the Feb. 20 court ruling.

Some small and medium-sized businesses told The Associated Press that the tariff refunds they have received so far will be used to pay for remaining or future duties or to get back on solid financial footing after more than a year of uncertainty and additional costs.

Jay Foreman, CEO of toy company Basic Fun, said he received about $450,000, or 7% of the total bill, for the second day in a row. He took the repayments as a positive sign, but said the pace since then seemed “absolutely slow.”

“It’s time to put money back into the economy, especially given how much we and others need money to support our businesses,” Foreman said.

Men’s grooming brand Manscaped has received about 30% of the $12 million refund it applied for, CEO Kevin Datu said. He said the San Diego company postponed investments and took on debt to pay duties on imports from Indonesia, China and other parts of Asia.

“We still have a second chapter to go, so we need to strengthen our balance sheet,” Datu said.

Melkon Khosrovian, owner of Greenbar Distillery in Los Angeles, said he has applied for about $90,000 in duty refunds for 17 shipments of herbs, spices and packaged goods that are difficult to obtain domestically. He said he has received $18,000 to date.

Last year, Mr. Khosrovian invested in automating his bottling system to reduce labor costs, despite increased import costs. He recalled that the White House had argued that the tariffs would create more U.S. manufacturing jobs.

The tariffs are “hurtful,” he said. “We had an even worse choice: raise prices and lose customers, or keep prices the same and make no profit.”