Trump plans to appeal order allowing all importers that paid struck-down tariffs to seek refunds
But the process could come to a halt after the Trump administration said Friday it plans to appeal a federal judge’s decision that allows any company that paid invalid taxes to seek refunds, not just those who filed lawsuits.
The reimbursement system, overseen by U.S. Customs and Border Protection, was working fairly smoothly until the Justice Department notified the judge of its planned appeal. According to CBP, the refunds arrived in the bank accounts of the first successful applicants on May 12, about three weeks after importers and customs brokers began submitting requests through an online system.
Refund applications totaling $85 billion — more than half of the $166 billion the agency estimates the government owes to companies that pay tariffs on imported goods — were accepted for processing as of May 22, CBP reported in a regulatory filing earlier in the week. He said he has so far directed the Treasury Department to issue $20.6 billion in refunds.
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The administration announced its appeal preparations as it challenged Judge Richard K. Eaton’s request that CBP Commissioner Rodney Scott appear before the U.S. Court of International Trade to answer questions about how long it would take to refund 330,000 importers who may be eligible for refunds. The judge scheduled a hearing for June 9 on why he shouldn’t require the government to do whatever it takes to speed up the process.
Justice Department lawyers asked Eaton to allow one or two of Scott’s aides to appear in his place, arguing that the CBP chief could not be forced to testify as a senior presidential appointee. They also argued that Eaton overstepped his authority when he ruled in March that the Supreme Court’s ruling gave “all registered importers” the right to a refund. Therefore, defendants plan to appeal the court’s universal injunction,” the attorneys wrote, adding that CBP will continue to move “as expeditiously as possible to process refunds in a phased approach” for businesses that file legal complaints asserting their right to refunds.
In a written response, Eaton said he needed to hear directly from Scott whether the government would return all the money it collected between when Trump imposed “reciprocal” tariffs on most countries in April 2025 and when the Supreme Court struck down those tariffs in late February.
“It is undisputed that the remedy for this unlawful collection is for the U.S. government to refund the unlawfully collected taxes,” the judge wrote.
Refunds come in phases
More than 1,000 companies have filed suit to recoup tariff costs, including major corporations such as Costco, Goodyear Tire, banana and pineapple distributor Dole Fresh Fruit, and department store chain Kohl’s. The judge said Wednesday that he plans to let CBP suspend the cases (which numbered 485 in mid-March) while it figures out how to handle reimbursement requests.
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Customs and Border Protection is handling refund requests in phases, focusing primarily on payments that were not finalized before the Supreme Court issued its 6-3 decision. CBP officials said later payments are easier to process.
Importers are required to make estimated tariff payments when goods enter the United States. Declared products then enter a process called “liquidation,” during which CBP determines how much of the import duties are owed. The decision will become final after 180 days unless the paying party objects to the invoice.
In Friday’s filing, the Justice Department said the agency did not have the technological capability or legal authority to recalculate purged accounts in each case without “specific instructions to the importer.”
Price reduction promised
Some national retail chains have said they plan to use tariff rebate refunds to lower customer prices on some products. Walmart Chief Financial Officer John David Rainey told analysts last week that the company would impose price cuts even though the maximum refund it could receive represents less than 1% of Walmart’s $483 billion in annual U.S. sales.
CEO Ron Vachris said Costco plans to refund the tariff costs it passed on to members. How much of its refund, when and in what form the big-box retail chain will redistribute depends on factors such as the size of the refund, when it will arrive and developments in a lawsuit seeking tariff relief for Costco customers, Vachris told investors Thursday.
Consumers were first able to see the refunds from cargo companies such as FedEx, UPS and DHL, which act as customs brokers when delivering products ordered from abroad. The companies collected the tariffs from either the sellers who sent the packages or the buyers who received the packages and turned over the tariffs they collected to CBP.
All three promised to return refunds they received to customers who paid import duties. Last week, FedEx said it was “working to quickly process refunds and return them to the carriers and consumers who originally incurred these charges.”
Bringing back payments back to work
The Supreme Court only invalidated the country-by-country tariff rates that Trump set by citing the 1977 International Emergency Economic Powers Act. Others he imposed for different reasons remain in force. Trump has also moved to impose new tariffs since the court’s Feb. 20 decision.
Some smaller companies told The Associated Press that the tariff refunds they have received so far will go toward paying off remaining or future tariffs or returning to solid financial footing after more than a year of uncertainty and additional costs.
Jay Foreman, CEO of toy company Basic Fun, said it received about $450,000, or 7% of its total demand, for two consecutive days. He called the refund a positive sign but said the process appeared to be “just slow progress” after receiving refunds of less than $10,000 since then.
“It is time to return the funds to the economy, especially given how much we and others need these funds to support our businesses and finance our operations,” Foreman said.
Men’s grooming brand Manscaped has received about 30 percent of the $12 million refund it applied for, president Kevin Datoo said. He said the San Diego company delayed investments last year and borrowed money to pay tariffs on imports from Indonesia, China and elsewhere in Asia.
“We need to strengthen the balance sheet because there is still a second chapter here,” Datoo said.
Melkon Khosrovian, owner of Greenbar Distillery in Los Angeles, said he filed for nearly $90,000 in tariff rebates for 17 different shipments and received $18,000 for four of them. Since some herbs, spices and packaging are difficult to find domestically, Khosrovian said he imported them.
He said the tariffs were “painful.” Last year it invested money to automate the bottling process so it wouldn’t have to pay as many workers. The move allowed it to reduce its 13-person staff by three people, but Khosrovian said the White House argued the tariffs would create more U.S. manufacturing jobs.
“Our options were bad and worse: Raise prices and lose customers, or keep prices the same and make no money,” he said.
