Now that the Supreme Court has ruled that President Donald Trump’s International Emergency Economic Powers Act (IEEPA) tariffs are illegal, U.S. importers will face a number of hurdles trying to recover billions of dollars in tariff costs.
Businesses large and small could be eligible for refunds that could total up to hundreds of billions of dollars, but trade lawyers have warned that duty refunds could be denied or delayed, depending on U.S. court decisions, the legal system and how U.S. Customs and Border Protection disburses eligible payments.
The U.S. government has recorded record customs revenue, with tariff collections soaring to $30 billion in January, bringing the year-to-date total to $124 billion. This is a 304% increase compared to the same period in 2025.
Estimates suggest that the Supreme Court’s ruling could require refunds of up to $175 billion, but the ruling does not say whether fees paid under the higher rate would have to be refunded.
“The Court’s decision is unlikely to significantly limit the president’s tariff powers in the future. However, the Court’s decision is likely to have other significant practical consequences in the near future,” Justice Brett Kavanaugh wrote Friday in a dissent to the Supreme Court’s majority decision. One issue is refunds. A refund of billions of dollars would have significant implications for the U.S. Treasury. The court said nothing today about whether or how the billions held by the government should be returned.” But as acknowledged during oral argument, the process is likely to be “chaotic.” ”
“It will take years to figure out what the numbers we’re talking about — and who’s going to pay, when and where,” President Trump said in a social media post on Jan. 12. He added: “It would be a total mess and it would be almost impossible for our country to pay.”
At a White House press briefing on Friday afternoon, President Trump was furious about the Supreme Court’s decision, saying the refunds “will probably have to be litigated for the next two years. … Ultimately, we’re going to have to litigate them for the next five years.”
Trump also said he would sign an order imposing 10% tariffs worldwide under Section 122 of the 1974 Trade Act, “above and beyond the regular tariffs already in place. We are also initiating several Section 301 and other investigations to protect our country from unfair trade practices by other countries and companies,” Trump added, referring to another provision of the 1974 Trade Act.
Lori Mullins, director of operations at Rogers & Brown Custom Brokers, said her initial view of the Supreme Court’s decision was that it did not authorize or guarantee refunds. “They sent this back to the lower court to determine if there will be a refund. We don’t know for sure, but many believe the refund will not be retroactive,” she said. For importers who want a refund, “the answer is yes. We have a ruling, but no ruling has been made yet on whether a refund will be granted. That will be dealt with in the lower court at a future date and time,” she said.
“We also note that several countries have already signed written agreements setting out specific tariff rates, such as the signed agreement with the UK on a flat 15% tariff. This does not affect agreements that have already been signed, so we do not know at this point whether these country-specific agreements will be affected,” Mullins added.
Leading up to the decision, importers and customs experts have pushed back against claims that the refund process is “onerous”, saying it should be easy because the duties paid are itemized.
Refund procedures are usually handled by the International Trade Court. Trade lawyers expect the case to be sent back to the Federal Circuit, which will likely then send the case back to the CIT to decide how to handle refunds.
Timothy Keeler, partner and co-head of international trade practice at Mayer Brown & Co. and former chief of staff to U.S. Trade Representative Susan Schwab, believes refunds will eventually go to companies. “I’ll get my money back,” he said. “It’s not clear what the process will be to get a refund. It’s unclear whether companies will have to go to court and become plaintiffs to get a refund, or whether it will ultimately be an administrative process handled by U.S. Customs and Border Protection,” he said.
First, litigants suing international trade courts and tariffs will need time to work with the U.S. government to figure out how to manage the refund process. The Department of Justice and the litigants in the customs case had previously asked the CIT to appoint a steering committee to manage the more than 1,000 refund-related cases filed to date. It is common for a steering committee to be established to manage the fee repayment process.
Even if a court ultimately rules that refunds are necessary, importers betting on a cash infusion from duty refunds should be aware that there is no set deadline and rushing refunds could overwhelm the system and lead to significant delays.
Joyce Adetutu, an international trade lawyer at Vinson & Elkins, said her firm has told clients it is difficult to issue large refunds at the “push of a button.”
“I don’t think we’ll see that scenario here,” Adetutu said. “I think what is more likely is that CIT and the government customs will work together to ensure that those who hold claims for refunds can ask for refunds… and those who do not protest will be stripped of their refunds,” she added.
“A decision by the CIT will likely take months, if not years,” said Greg Tompsett, vice president of U.S. customs brokerage at logistics firm Kuehne & Nagel. “The extension of time could lead to further litigation, potentially all the way back to the Supreme Court. So the good news is that we now have some finality on this decision. The bad news is that no importer can take immediate action to request a refund or get their money back,” he said.
Companies will seek not only billions of dollars in tariff refunds, but also billions of dollars in customs bonds and collateral. Tariffs not only result in additional import taxes, but they also increase the cost of products, forcing importers to increase the value of government-mandated customs deposits.
International trade experts told CNBC that tariffs on some products have increased from 10% to more than 25%, and importers now face bonds ranging from a regulatory minimum bond of $50,000 to a maximum of $450 million. Rising bond values are forcing some companies to post additional funds in the form of collateral to ensure they pay the tariffs.
Rising tariffs and the associated need for bonds and collateral are creating a historic number of “bond shortages.” CBP told CNBC it has identified more than 24,000 customs bond “deficiencies” worth nearly $3.6 billion. This is twice the level in 2019, when shortages first spiked due to President Trump’s first round of tariffs under Section 301 of the Trade Act of 1974.
Importers told CNBC that in theory they should be able to get refunds quickly because duties are itemized, similar to customs deposits and collateral documents. But trade lawyers also say it may be difficult for companies to quickly receive refunds on bond overpayments and collateral, as insurers avoid exposure to customs duties.
Vincent Moy, international guarantor leader at Marsh Risk, recently told CNBC that companies should be prepared for some delays in receiving these customs bond funds due to insurance red tape requirements. Insurers must verify and audit paper trails before issuing collateral.
Some surety companies have a collateral return review process that can take 30 to 60 days to return to underwriting and review. Many small businesses were expected to contact their insurance companies to begin the review process ahead of the Supreme Court’s ruling. Jennifer Diaz, an international attorney at Diaz Trade Law, recently told CNBC that “if you’re hoping for the collateral to be returned eventually, the squeaky wheel might make that happen a little faster.”
Democrats on Capitol Hill did not wait to demand action from the administration following the court defeat. Sen. Maria Cantwell (D-Wash.), ranking member of the Senate Commerce, Science, and Transportation Committee and ranking member of the Senate Finance Committee, sent a letter to Treasury Secretary Scott Bessent asking for details on the administration’s plan to refund companies that paid illegal tariffs.
“Many U.S. businesses, especially small and medium-sized businesses, are struggling to pay illegal tariffs, and the financial strain has brought some to the brink of bankruptcy,” Cantwell wrote. “It is imperative that the Treasury Department implements an expedited and transparent process to redress the financial harm caused by these illegal tariffs.”
