Supreme Court Invalidates IEEPA Tariffs
The Supreme Court ruling struck down the Trump administration's tariffs imposed under the International Economic Emergency Powers Act (IEEPA), determining that the law does not authorize the president to impose such tariffs. This decision sends the matter back to lower courts, which may address the refund process for businesses that paid these duties. Although the ruling did not outline a specific mechanism for refunds, it opens the potential for billions of dollars in tariff refunds.
Refund Processes Through CBP and CIT
Businesses can already file post-summary corrections with Customs and Border Protection (CBP), which collects tariffs for the Department of Homeland Security and remits them to the Treasury. For entries within the last 10 months, importers may request customs brokers to correct declarations for refunds on recently paid IEEPA tariffs. For older entries, importers must file protests within statutory deadlines. If protests are denied, judicial review in the U.S. Court of International Trade (CIT) seeks reliquidation, where the CIT has confirmed its authority.
Although today's Supreme Court opinion did not address the refund issue directly, in most cases, companies should pursue refunds through the U.S. Customs and Border Protection's administrative processes.
Challenges in Processing Massive Refund Claims
The volume of IEEPA tariffs collected since imposition last year poses significant challenges for businesses and handling entities. Estimates of refundable amounts range from $150 billion per the Tax Foundation and Penn-Wharton Budget Model to $150-200 billion per JPMorgan analysis. Customs brokers face strain from surges in corrections and protests across thousands of importers, while companies grapple with internal capacity limits amid ongoing compliance demands.
Beyond the legal implications, the real challenge now is operational, adding companies will need to rapidly model which IEEPA tariffs may be refundable and quantify their opportunity because any refund process is likely to be highly congested.
Litigation and Expert Perspectives
More than 1,000 lawsuits have been filed at the CIT to secure refunds in anticipation of an adverse Supreme Court decision. Trade lawyers emphasize that importers may need to proactively file protests and pursue court relief if denied, with possible forthcoming guidance from Customs.
A lot of how refunds will play out will depend on what the lower courts and customs do next. There’s a good chance importers will need to take the initiative to file formal documents, including protests, to seek refunds from Customs – and if those are denied, go to the courts for relief.
Reactions from Trump Administration Figures
President Trump described the ruling as deeply disappointing and defective for not addressing refunds, predicting further litigation. Treasury Secretary Scott Bessent noted that any refund process would not be immediate, potentially spanning weeks, months, or over a year, and questioned whether large corporations would pass savings to customers.
