Supreme Court triggers tariff refunds

Businesses have started getting money back from tariffs the Supreme Court said were illegally imposed, but the fight has moved from whether refunds are owed to who gets them and how fast. The Supreme Court held on February 20 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, invalidating a large set of Trump-era import duties. Since then, U.S. Customs and Border Protection has built a refund system, importers have filed claims, and the administration has said it plans to appeal a trade court order that opened refunds to all importers of record. Officials and trade lawyers now describe the next phase as an administrative and legal battle over scope, timing and court power. ### Which tariffs are at issue here? The Supreme Court’s February 20 decision in *Learning Resources, Inc. v. Trump* said IEEPA did not give the president authority to impose tariffs. That ruling swept in the broad country-based duties Trump had imposed under emergency powers, rather than tariffs imposed under other statutes such as Section 301 or Section 232. (supremecourt.gov) U.S. Customs and Border Protection stopped enforcing the IEEPA tariffs as of February 24, according to trade-law summaries citing the post-ruling process. The Court itself did not spell out a refund mechanism, leaving the issue to lower courts and CBP. ### Why are companies getting refunds now instead of in February? Judge Richard K. Eaton of the U.S. (supremecourt.gov) Court of International Trade moved the dispute into the refund stage in *Atmus Filtration, Inc. v. United States*. On March 4, he ordered CBP to liquidate or reliquidate certain entries without the unlawful IEEPA duties and to refund money collected under those tariffs, with interest, through administrative processes. (dwt.com) CBP then launched CAPE — Consolidated Administration and Processing of Entries — inside its Automated Commercial Environment to handle claims. The agency says CAPE is the system for submitting and processing valid IEEPA duty refund requests authorized by court order or other applicable law. ### How much money is involved? CBP has estimated the government owes about $165 billion to $166 billion in unlawfully collected IEEPA duties. (sullcrom.com) Skadden said more than 330,000 importers paid those duties across more than 53 million entries, underscoring the scale of the reimbursement effort. As of May 22, CBP said in a legal filing that it had accepted refund applications totaling $85 billion and had directed the Treasury Department to issue $20.6 billion in refunds. (cbp.gov) The first successful applicants received money on May 12, about three weeks after importers and customs brokers could begin submitting claims, according to CBP. (skadden.com) ### Why is the administration trying to stop universal refunds? Justice Department lawyers told the trade court that Judge Eaton went too far when he said “all importers of record” were entitled to refunds. The administration said it intended to appeal what it called the court’s “universal injunction,” while continuing to process refunds in phases for businesses that filed legal complaints asserting refund rights. (manufacturing.net) SCOTUSblog said the government’s position is that refunds may be owed only to importers who sued, and that a broad order covering everyone runs into the Supreme Court’s recent limits on nationwide injunctions. That argument has turned the case from a merits fight into a dispute over judicial reach and administrative execution. ### What are importers being told to do now? (manufacturing.net) CBP says importers and authorized customs brokers can use the ACE Portal and CAPE to submit declarations and provide bank information for refunds. Trade lawyers have said companies should review affected entries, complete ACH registration and watch whether appeals or stays interrupt processing. (scotusblog.com) Davis Wright Tremaine said the court’s order has been paused in part and may be appealed, while some importers may still need court actions or protests to recover fully. That means companies are pursuing cash already deemed unlawfully collected while still weighing procedural steps to preserve claims. ### What happens next in court? June 9 is the next public checkpoint in the case. (cbp.gov) Judge Eaton has ordered CBP Commissioner Rodney Scott to address how long it would take to repay all potentially eligible importers and whether the government should be required to speed the process, though Justice Department lawyers have argued Scott himself cannot be compelled to testify. (dwt.com) The administration’s planned appeal will determine whether refunds continue on a broad basis or narrow to companies already in court. Until that is resolved, CBP’s refund portal, the Court of International Trade docket and any appeal to the Federal Circuit are the named forums to watch. (manufacturing.net)