The Trump administration announced its intention to contest a judge’s authority to mandate comprehensive refunds of all tariffs deemed illegal by the US Supreme Court, which could introduce significant legal uncertainty into an already ongoing claims process. The Justice Department filed notice on Friday regarding its intention to appeal a court order that mandates customs authorities to reassess all import taxes collected under the administration of President Donald Trump, utilising a law from the 1970s pertaining to emergency powers. US Customs and Border Protection initiated a new online portal for processing refund claims on April 20, indicating its intention to reimburse a portion of the roughly $166 billion in levies invalidated by the Supreme Court earlier this year. However, as the administration has progressed with that plan, the Justice Department has refrained from acknowledging that a judge possesses the authority to mandate CBP to reprocess entries that have already been finalised through a procedure known as liquidation, thereby leaving the door ajar for further legal contention. “CBP has no authority to reliquidate or refund money without a court order,” the Justice Department stated in the court filing on Friday. Central to the contention is the question of the judge’s jurisdiction to mandate nationwide refunds for all importers who incurred tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, regardless of whether they initiated litigation in the trade court.
The US has indicated that the government is required solely to reimburse importers who initiate lawsuits, asserting that the judge’s ruling functions as a nationwide injunction, which is prohibited by a recent Supreme Court decision regarding birthright citizenship. The government disclosed its intention to appeal in an objection to a judge’s order requiring CBP Commissioner Rodney Scott to appear in person for a hearing scheduled on June 9. The Justice Department contended that the circumstances did not meet the threshold of “extraordinary circumstances” necessary to mandate the testimony of a high-ranking official. Furthermore, it indicated that it would pursue an appeal on this matter should the judge remain steadfast in his decision. Judge Richard Eaton promptly rejected the government’s request, stating that he required Scott’s testimony to ascertain whether the administration planned to completely reimburse all tariffs collected from all importers, regardless of size. “There is $166 billion involved,” he wrote. The White House did not provide an immediate response to a request for comment. One law firm advising companies indicated that importers should refrain from making filings to the Court of International Trade at this time. “We continue to recommend that importers adopt a wait-and-see approach before initiating any filings at the CIT, as the statute of limitations will remain in effect until February 2027,” stated the law firm.
In a 6-3 ruling in February, the Supreme Court determined that Trump’s application of the IEEPA to implement extensive global tariffs was illegal. They remained reticent regarding the issue of refunds; nonetheless, the matter is being referred back to the US Court of International Trade in Manhattan for further proceedings. Eaton was tasked with overseeing a multitude of lawsuits initiated by importers aiming to recover the taxes they had disbursed prior to the Supreme Court’s ruling. He directed the customs agency to reassess tariff amounts for all importers who had paid the disputed levies, rather than limiting the review to only those companies that had filed lawsuits. The government also committed to paying interest on any refunds. Uncertainty has persisted regarding the potential opposition from officials to the repayment of the full amount. Eaton has predominantly conducted non-public court hearings to address the government’s progress; however, he noted in a public order that there was contention regarding the management of tariffs that have reached finality, a procedure that occurs automatically on a rolling basis. A customs official disclosed in court filings that the initial phase of the refund portal roll-out would not be equipped to manage a substantial portion of the import entries in question, and failed to present a definitive timeline for enhancing the system’s capabilities to accommodate more complex claims.
Trump, in a critical stance, condemned the Supreme Court’s ruling and implied that businesses opting not to pursue refunds might gain political advantages down the line, asserting that he would “remember them.” The issue raised in Friday’s filing by the government seems poised for resolution by an appeals court, as noted by Valerie Sorensen-Clark, who was CBP’s counsel on the case until last month and is currently a partner at the law firm GDLSK LLP in New York. “That question now appears headed for appellate resolution,” Sorensen-Clark noted in a LinkedIn post subsequent to the DOJ’s filing. “Regardless of where the courts ultimately land, additional clarity on the issue will benefit importers, CBP, and the trade community alike.” In addition to the ongoing legal disputes under IEEPA, the Trump administration is currently engaged in proceedings before the trade court, where it is defending a new set of global tariffs that the president enacted under an alternative legislative framework shortly after his defeat in the Supreme Court. A three-judge panel ruled the policy to be unlawful. However, a federal appeals court has temporarily halted that ruling while it considers the government’s request for a more enduring order that would permit customs authorities to maintain the collection of the levies as the legal battle unfolds.