The Trump administration has announced its intention to appeal a federal judge's order that would allow all companies that paid invalidated tariffs to seek refunds, potentially disrupting a refund process that had been progressing smoothly. The U.S. Supreme Court previously ruled that President Donald Trump lacked constitutional authority to impose higher import taxes on goods from nearly every other country.
Refund Process Underway
Businesses both large and small had begun receiving tariff refunds after the Supreme Court's decision. The U.S. Customs and Border Protection (CBP) reported that refunds reached the bank accounts of the first successful applicants on May 12, about three weeks after importers and customs brokers could start submitting claims through an online system. As of May 22, applications for refunds totaling $85 billion—more than half of the estimated $166 billion owed—were accepted for processing, with $20.6 billion already directed to be issued by the Treasury Department.
Administration's Objection
The administration revealed its appeal plans while objecting to a demand by Judge Richard K. Eaton for CBP Commissioner Rodney Scott to testify in the U.S. Court of International Trade regarding the timeline for repaying all 330,000 potentially eligible importers. Justice Department lawyers argued that as a high-ranking presidential appointee, Scott could not be compelled to testify, and that Judge Eaton exceeded his authority by ruling that the Supreme Court's decision entitled all importers to refunds. They stated their intent to appeal the universal injunction, while CBP would continue processing refunds for businesses with pending trade court complaints.
In a response, Judge Eaton emphasized the scale of the case, writing, 'This involves $166 billion. It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties.' He scheduled a June 9 hearing to address why the government should not be required to expedite the process.
Impact on Businesses
Some national retail chains, such as Walmart, indicated they would use refunds to lower customer prices. Walmart CFO John David Rainey noted that price cuts would be implemented even though the maximum refund represented less than half of 1% of Walmart's $483 billion in annual U.S. sales. Smaller companies reported using partial refunds to pay remaining tariffs, reduce debt, or sustain operations. Jay Foreman, CEO of toy company Basic Fun, received about $450,000—7% of his total claim—over two days but described the subsequent process as a 'total slow roll,' urging the release of funds to support businesses.
