The Trump administration plans to appeal a federal judge’s order allowing all importers who paid struck-down tariffs to seek refunds, potentially halting billions in payouts. This move follows a Supreme Court ruling against Trump’s constitutional authority to impose certain import taxes, which had led to some businesses already receiving refunds. The appeal could significantly delay the process for thousands of importers who did not file individual lawsuits, raising concerns among companies large and small about the speed and scope of the reimbursements.
In a significant development for businesses nationwide, the Trump administration announced its intent to appeal a federal judge's sweeping order that would allow all importers who paid tariffs, later deemed unconstitutional, to seek refunds. This move threatens to bring to a halt a refund process that had recently begun to disburse billions to companies, both large and small.
The refunds stem from a U.S. Supreme Court ruling that found President Donald Trump lacked the constitutional authority to impose higher import taxes on goods from numerous countries. Following this decision, the U.S. Customs and Border Protection (CBP) initiated a refund system, with initial successful applicants receiving payments as early as May 12.
By May 22, applications for refunds totaling $85 billion had been accepted for processing, representing more than half of the estimated $166 billion owed by the government. So far, the Treasury Department has been directed to issue $20.6 billion in refunds. This process, however, now faces potential disruption due to the administration's planned appeal.
The appeal targets a federal judge’s order that broadened refund eligibility beyond just those companies that filed lawsuits. Judge Richard K. Eaton of the U.S. Court of International Trade had summoned CBP Commissioner Rodney Scott to appear on June 9, seeking clarity on the timeline for repaying all 330,000 potentially eligible importers and whether the process should be expedited.
Justice Department lawyers objected to Scott's appearance, arguing that as a high-ranking presidential appointee, he could not be compelled to testify. They also contended that Judge Eaton overstepped his authority by issuing a “universal injunction,” determining that the Supreme Court's ruling entitled 'all importers of record' to refunds.
"For that reason, defendants intend to appeal the court's universal injunction," the lawyers stated, clarifying that CBP would continue to prioritize refunds for businesses that had filed legal complaints. Judge Eaton countered that direct testimony from Scott was essential to determine if all funds collected between April 2025, when Trump imposed "reciprocal" tariffs, and the Supreme Court's February decision would be returned. "It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties," the judge affirmed.
A notable image accompanying this news shows an American flag flying proudly near the Ever Memo container ship at the Port of Los Angeles on May 28, 2026, captured by Mario Tama for Getty Images, symbolizing the vast global trade affected by these policies.
Refunds Coming in Phases
CBP has been processing refund claims in phases, initially focusing on payments that were not finalized before the Supreme Court's 6-3 decision, as these were simpler to handle within their existing system. The Justice Department indicated that technological upgrades to its refund portal and "importer-specific orders" from individual lawsuits are necessary before older, "liquidated" accounts can be fully recalculated.
Over 1,000 companies had filed lawsuits to recover tariff costs. The number of importers who did not sue, and who might now be excluded from refunds if the appeal succeeds, remains unclear. Ryan Majerus, an international trade lawyer at King & Spaulding, believes this represents "definitely a fraction of the total." He noted that an appeal would likely impact only imported merchandise in the U.S. for 314 days, the period for CBP’s official duty determination, suggesting it might only cover "really old entries."
However, legal experts like Barry Appleton, a New York Law School professor, warn that an appeal, even if the government eventually loses, could significantly delay the refund process. "If the government can freeze the refund machinery while it litigates, it buys months, and every month of delay is a month the Treasury keeps the money," Appleton explained.
Price Cuts Promised
Some prominent national retail chains have already committed to passing on tariff refunds to customers through price reductions. Walmart Chief Financial Officer John David Rainey announced that the company would implement price cuts, despite the maximum refund representing less than half of 1% of its annual U.S. sales.
Costco CEO Ron Vachris also stated the company’s intention to return tariff costs to members, with the specifics depending on the refund size, timing, and progress of a related lawsuit. Shipping giants like FedEx, UPS, and DHL, which often act as customs brokers, have also pledged to pass any received refunds to the customers who bore the import taxes.
Putting Refunds Back into the Business
The Supreme Court's decision specifically invalidated country-by-country tariff rates imposed under the 1977 International Emergency Economic Powers Act. Notably, President Trump has since moved to introduce new tariffs following the February 20 ruling.
For smaller businesses, these refunds are critical for financial stability and future investments. Jay Foreman, CEO of toy company Basic Fun, received approximately $450,000, or 7% of his total claim, expressing relief but also concern over the subsequent slow pace. "It's time to release the funds back into the economy, especially given how much we and others need these funds to support our businesses," Foreman urged.
Kevin Datoo, President of men's grooming brand Manscaped, has received about 30% of his company's $12 million refund claim. Manscaped had to defer investments and incur debt to cover tariffs on imports from Indonesia, China, and other Asian regions. Datoo emphasized the need to "shore up the balance sheet because there's still a whole second chapter here."
Melkon Khosrovian, owner of Greenbar Distillery in Los Angeles, applied for a $90,000 refund on various imported ingredients and packaging, receiving $18,000 to date. He recounted how tariffs, intended to boost U.S. manufacturing, forced difficult choices: "Our choices were bad and worse: raise prices and lose customers, or keep prices the same and not make any money." The uncertainty and additional costs had led him to invest in automating his bottling system to reduce personnel expenses. The return of these funds is seen as vital for businesses navigating a complex economic landscape.
