Tens of billions in tariff refunds owed by companies were left unresolved by the Supreme Court, which ruled Friday that President Donald Trump did not have the legal authority to impose the tariffs under the emergency law.
The decision will begin a protracted battle for importers and retailers to try to recoup the $170 billion in tariffs they have already paid to the U.S. government.
Key questions left unanswered for US importers include the prospects and process of recovering funds collected last year by the government under the International Emergency Economic Powers Act. The vote against the Trump administration was 6-3, with Justice Brett Kavanaugh writing in dissent.
“The Court says nothing today about whether, and if so, the Government should return the billions of dollars collected from importers,” Kavanaugh wrote. “But that process is likely to be ‘messy,’ as the court acknowledged during oral arguments in November.”
U.S. Customs and Border Protection has so far collected an estimated $170 billion in tariffs imposed by Trump through Dec. 14 under the International Emergency Economic Powers Act, the law at the center of the case.
The court ruled that using IEEPA to impose tariffs was not legal, but the judges did not rule on whether importers were entitled to refunds, leaving it to a lower court to resolve those issues. The lawsuit will return to the US Court of International Trade for the next round of legal disputes.
While waiting for the judges’ decision, more than 1,500 companies have filed their own tariff lawsuits in the trade court to set themselves up for tariff refunds, according to a Bloomberg analysis.
The Trade Court in recent months has pressured the Justice Department to at least indicate how it plans to handle the refund issue if it loses at the Supreme Court.
In written arguments, government lawyers have said the administration will not fight the court’s authority to order officials to recalculate tariffs, but left open the possibility that it could try to limit which importers are eligible.
The US Trade Court has experience managing large-scale refund processes. After the Supreme Court struck down the port maintenance tax on exporters in 1998, the court created a claim procedure. That fight involved nearly 4,000 cases and resulted in $750 million in back taxes, according to court records and reports at the time.
The scale of Trump’s disputed tariffs is far larger – by the end of 2025, the government told the trade court that more than 300,000 importers have paid the disputed tariffs so far.
“For importers, this means there is the possibility of refunds,” said Ted Murphy, partner at Sidley Austin LLP. He said, what will be the process of refund and how much time will it take, this is a big issue.
Tariffs are not mentioned in the 1977 emergency powers law, and had never been used before to impose fees. The companies are still subject to other tariff measures.
With about $774 billion in cash, according to Secretary Scott Besant, the U.S. Treasury has enough cash to return IEEPA revenues if ordered, though that could happen in a matter of weeks or months and “could take more than a year,” he said in a Reuters interview last week.
Besant also suggested that refunds could amount to a “corporate boon” for companies bearing the burden of tariffs. “Costco, which is suing the US government, are they going to give their customers money back?”.
Some industries will receive a larger share of the duties collected under IEEPA till December 14. According to an analysis by Bloomberg Economics, the textile, toys and food and beverage industries top the list of industries that import final goods, including wholesalers, retailers and manufacturers with factories outside the US. For those that import tariff-affected components needed to make goods domestically, machinery, electronics and autos are at the forefront.
“The construction industry – with purchases of electrical equipment and appliances, potentially to be fitted into new buildings – is also particularly exposed,” wrote BE’s Nicole Gorton-Caratelli and Chris Kennedy.
He said the size of the firm will also play a role in who sees the biggest refunds. Because any refunds will go to the importers-of-record who paid the duty, larger companies that import goods themselves are more likely to receive refunds directly than smaller companies that buy from bulk importers.
Customs brokers and lawyers are advising companies that the administration could make it difficult to obtain refunds, potentially requiring proof they have not paid the costs, or demanding extensive paperwork for each shipment. For now, importers are being asked to at least keep their import records for refunds, even if they don’t yet know what that will look like.
CBP recently announced that starting February 6, the US Treasury will no longer issue CBP refunds via paper checks, but will move to electronic payments.