US Judge to Lead Talks on $175bn Tariff Refunds After Supreme Court Overturns Trump Levies
A US judge is set to convene with government lawyers to establish a framework for refunding up to $175bn in tariffs that were unlawfully collected from over 300,000 importers during the Trump administration. This development follows a landmark Supreme Court ruling that invalidated the tariffs but failed to specify repayment procedures, sparking a wave of legal actions.
Judge Eaton Orders Immediate Refunds with Interest
Judge Richard Eaton of the US Court of International Trade has mandated that Customs and Border Protection (CBP) commence reimbursements using its existing systems, including interest, in an order that applies to all affected importers, not just those who pursued litigation. In a court hearing this week, Eaton emphasized that the agency routinely handles such refunds through its liquidation process, where importers pay estimated amounts upon entry, finalized over ten months later.
"Customs knows how to do this," Eaton stated, highlighting that CBP should be able to issue refunds by finalizing entry costs without the illegal tariffs. "They do it every day. They liquidate entries and make refunds." The judge's directive aims to prevent chaos in the repayment process, urging a systematic approach to address the backlog of cases.
Supreme Court Decision Sparks Legal Uncertainty
On 20 February, the Supreme Court struck down Trump's so-called liberation day tariffs, ruling that he exceeded his authority under a 1977 national emergencies law. However, the decision omitted details on how importers would recover their funds, leading to numerous lawsuits. The upcoming closed-door meeting, described as a settlement conference by court clerk Gina Justice, will involve discussions with CBP lawyers and remote participation from attorneys representing Atmus Filtration, a manufacturer that paid approximately $11m in illegal tariffs.
This case may serve as a model for resolving around 2,000 other pending lawsuits, potentially streamlining refunds for a broader range of importers. Eaton expressed confidence in finding a workable solution, noting, "I don't believe that any of this has to be chaotic with respect to anybody, because I know that you're going to try to come up with a way of doing it."
Political Fallout and New Legal Challenges
In response to the Supreme Court ruling, the White House announced plans to impose a new 15% charge on all imports under a different legal authority. Concurrently, a coalition of Democratic attorneys general and governors from 24 states, led by New York Attorney General Letitia James, has filed a lawsuit against Trump over his more recent tariff measures. They argue that Trump lacks the constitutional power to enact these levies and are seeking refunds for additional costs incurred by states.
"Once again, president Trump is ignoring the law and the constitution to effectively raise taxes on consumers and small businesses," James asserted, underscoring the ongoing political and legal tensions surrounding US trade policy. This suit adds another layer to the complex landscape of tariff disputes, highlighting the broader implications for economic regulation and executive authority.
