US Customs Prepares Tariff Refund System Following Supreme Court Decision
US Customs and Border Protection (CBP) is actively developing a new system to process refunds for tariffs that were recently declared unconstitutional by the US Supreme Court. According to a court filing by CBP official Brandon Lord, the agency aims to implement this system within the next 45 days. This initiative comes in response to a federal judge's order to refund approximately $166 billion in tariff payments to around 330,000 importers.
Legal Background and Judicial Oversight
The Supreme Court's ruling last month struck down tariffs that were a central component of former President Donald Trump's economic policy, deeming them unconstitutional. However, the court did not specify a mechanism for refunding the collected tariffs, leaving many small importers concerned about a potentially costly and lengthy process. In response, US Court of International Trade Judge Richard Eaton issued a sweeping order directing CBP to begin refunding tariffs using its existing internal procedures.
Following a meeting with government lawyers, Judge Eaton amended his order to no longer require "immediate compliance," allowing CBP time to establish the new refund system. Eaton acknowledged the "declaration of Brandon Lord" in making this adjustment. The judge is overseeing roughly 2,000 lawsuits filed by importers, including major corporations like FedEx and L'Oreal, seeking refunds. Trade lawyers have indicated that these cases represent only the beginning, with thousands more prepared to sue if an automatic refund system is not developed.
Details of the Proposed Refund Process
Brandon Lord outlined in his court filing that the new system will require importers to submit a declaration through CBP's computer system, known as ACE, detailing their tariff payments. These submissions will be validated before refunds, including interest, are processed. Importantly, importers will not need to file lawsuits to receive refunds. Each importer will receive a single payment from the Treasury Department, regardless of the number of separate goods entries they have made.
Lord explained that CBP's existing administrative procedures and technology are inadequate for handling refunds on such a large scale. Manually reviewing paperwork for over 53 million shipments would require more than 4 million hours of labor, diverting personnel from the agency's trade enforcement mission. He noted that importers have paid an estimated $166 billion in tariffs on these shipments.
Corporate Lawsuits and Industry Response
A wave of major companies has filed lawsuits against the administration seeking refunds. Recent additions include affiliates of Nintendo and CVS, joining a growing list of corporations challenging the tariffs. Below is a summary of some key cases filed by prominent companies:
- Mondelez (March 6, 2026): The Cadbury-parent sued the US government, requesting a refund of all IEEPA duties collected.
- FedEx (February 23, 2026): Filed a lawsuit seeking a refund for President Trump's emergency tariffs.
- BYD (February 9, 2026): The Chinese automaker challenged President Trump's authority to impose tariffs and requested a refund for levies paid since last April.
- Prada (February 6, 2026): Sued the US government, requesting the court to order a refund of the IEEPA duties collected.
- Staples (January 20, 2026): Filed a lawsuit seeking a refund for IEEPA duties, arguing the tariffs were unlawful.
- Tom Ford Distribution (January 8, 2026): A subsidiary sued, requesting the court to order a refund of IEEPA duties on imports with interest.
- J Crew Group (January 6, 2026): Sought a full refund of tariffs paid under the IEEPA to date.
- Dole Fresh Fruit Company (January 2, 2026): Filed a lawsuit for a declaration that IEEPA tariffs were unlawful, a full refund, and an injunction against future tariffs.
- GoPro (December 24, 2025): Filed a protective suit to challenge Trump's IEEPA-based tariffs and secure refunds for duties on camera equipment.
- Barnes & Noble Purchasing (December 22, 2025): Sued CBP to seek refunds of IEEPA duties and a ruling that President Trump lacks authority under IEEPA to impose tariffs.
- BorgWarner (December 12, 2025): The auto parts maker filed a lawsuit asking the CIT to hold IEEPA tariffs unlawful and sought protection for its right to a complete refund.
- Goodyear Tire & Rubber Company (December 10, 2025): Filed a protective lawsuit challenging tariffs imposed under emergency powers, seeking a refund and an injunction.
- Costco Wholesale (November 28, 2025): Sued the US government to ensure refunds if the Supreme Court rejected Trump's authority to impose tariffs.
- EssilorLuxottica (November 26, 2025): Filed to overturn IEEPA tariffs and preserve refund rights as duties on imported frames and lenses became costly.
- Alcoa (November 26, 2025): Joined importers challenging IEEPA tariffs, seeking a declaration the duties are unlawful and demanding refunds.
- Toyota subsidiaries (November 21, 2025): Filed protective suits to challenge the legality of IEEPA tariffs and ensure access to refunds.
- Bumble Bee Foods (November 18, 2025): Argued trafficking-based and reciprocal tariffs were unlawful under IEEPA and requested full reimbursement.
- Revlon (November 14, 2025): Sought to suspend liquidation and recover tariff payments, arguing IEEPA does not authorize the sweeping tariffs.
- Kawasaki Motors Manufacturing Corp USA & affiliates (November 13, 2025): Sued to contest emergency tariff orders and avoid losing refund rights ahead of liquidation.
- Yokohama Tire (November 10, 2025): Filed to challenge IEEPA tariffs and seek refunds, arguing duties were imposed without legal authority.
- Yamazaki Mazak (November 10, 2025): Challenged emergency tariffs that increased costs for imported machinery, seeking refunds and declaratory relief.
Industry and Implementation Challenges
The US Chamber of Commerce has praised CBP's 45-day plan as "a constructive and practical proposal" to administer refunds efficiently. Neil Bradley, the Chamber's chief policy officer, emphasized that this proposal would spare hundreds of thousands of small businesses from having to litigate to obtain refunds, while also encouraging further refinements.
Despite the positive reception, challenges remain. Lord's declaration revealed that only 21,423 out of more than 330,000 importers have signed up for CBP's electronic refund system, which was implemented on February 6. This low participation rate highlights potential hurdles in ensuring all eligible importers receive their refunds promptly.
Judge Eaton is currently overseeing a refund lawsuit by Atmus Filtration Inc, which serves as a vehicle to order CBP to issue refunds for all importers. As the 45-day deadline approaches, the success of this new system will be closely monitored by businesses and legal experts alike, with implications for future trade policies and regulatory compliance.
