NEW YORK (AP) — Following a decision by the U.S. Supreme Court, businesses across the nation are starting to see refunds from tariffs imposed by former President Donald Trump. However, these repayments might face delays as the Trump administration plans to challenge a federal judge’s directive to extend refunds to all companies that paid the tariffs, not just those that took legal action.
The tariff refund process, managed by U.S. Customs and Border Protection (CBP), was initially progressing well, with early applicants receiving their refunds by mid-May. Importers and their brokers initiated claims through an online portal starting three weeks prior, as noted by CBP. By May 22, claims totaling $85 billion had been accepted, a significant portion of the $166 billion the government owes. To date, $20.6 billion has been refunded, per CBP’s recent filing.
The administration’s appeal was announced as Judge Richard K. Eaton sought to have CBP Commissioner Rodney Scott testify about the timeframe for reimbursing approximately 330,000 eligible importers. A hearing is set for June 9 to discuss expediting the refund process.
Justice Department attorneys requested that Eaton allow Scott’s deputies to testify instead, citing Scott’s position as a high-ranking official. They also plan to contest Eaton’s March ruling, which they argue exceeded his authority by granting refund rights to all importers. Meanwhile, CBP will continue processing refunds for those who filed legal complaints.
Refunds in Stages
Over 1,000 companies, including notable names like Costco and Goodyear, have initiated lawsuits to recover their tariff payments. Judge Eaton plans to resume cases paused for CBP to determine refund procedures, which numbered 485 in March.
CBP is tackling refunds in phases, starting with payments not finalized before the Supreme Court’s decision. Importers initially make estimated payments upon goods entering the U.S., with CBP finalizing the amount within 180 days unless contested.
The Justice Department highlighted CBP’s technological and legal limitations in recalculating finalized accounts without specific court orders in each lawsuit.
Impact on Consumer Prices
Some retail giants have indicated plans to use their refunds to reduce prices for consumers. Walmart’s CFO, John David Rainey, announced the company would cut prices despite the refund amounting to a small fraction of its annual sales. Similarly, Costco aims to return tariff costs to members, factoring in the refund size and timing.
Shipping firms like FedEx, UPS, and DHL, which handled customs duties, have also committed to passing refunds back to customers. FedEx, in particular, is actively processing refunds for those who initially paid the tariffs.
Business Reintegration of Funds
The Supreme Court ruling invalidated tariffs set under the 1977 International Emergency Economic Powers Act, though others remain intact. Even as some businesses receive refunds, President Trump has introduced new tariffs post-ruling.
Small businesses have expressed their intent to use refunds for outstanding tariffs or to stabilize financially after enduring increased costs. Jay Foreman, CEO of Basic Fun, reported receiving a portion of his claim, yet described the process as sluggish.
Kevin Datoo, President of Manscaped, conveyed the need to strengthen financial standing after deferring investments and incurring debt due to tariffs. Melkon Khosrovian of Greenbar Distillery discussed the challenges tariffs posed, despite reducing staff via automation as a countermeasure.
