Trade Court Orders Federal Government to Issue Tariff Refunds

A federal judge in New York has ruled that the government must refund the estimated $175 billion it collected through the Trump administration’s unconstitutional tariffs.

Following the Supreme Court’s ruling to overturn tariffs issued through the International Emergency Economic Powers Act (IEEPA) last month, more than 1,000 companies have sued the federal government seeking refunds. On March 4, Judge Richard Eaton, a member of the U.S. Court of International Trade overseeing the refund process, issued an order stating: “All importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision.”

Eaton’s order was brought about by a lawsuit from Atmus Filtration, a Nashville, Tennessee-based manufacturer of filtration products that is seeking a tariff refund. As part of the ruling, Eaton wrote that he would be the only judge to hear cases pertaining to the refund of IEEPA duties. As such, he noted there was no danger that another judge would reach any contrary conclusions. “To find otherwise would be to thwart the efficient administration of justice and to deny those importers who have filed suit the efficient resolution of their claims, and to deny entirely importers who have not filed suit the benefit of the Learning Resources decision,” he wrote.

Actually issuing those refunds will still take some time. On March 6, U.S. Customs and Border Protection (CBP) submitted a court filing stating that it was facing an “unprecedented volume of refunds.” Further, it said that its existing administrative procedures and technology are not well-suited to a task of this scale, and that issuing the refunds plus interest would require manual work that would take agency employees away from their trade enforcement mission.

Instead, the agency said it is developing a new Automated Commercial Environment (ACE) functionality that will streamline and consolidate refunds and interest payments on an importer basis. CBP estimated this new process would save agency employees more than 4 million hours of work and that the functionality could be ready for use within 45 days. “The process will be simpler and more efficient than the existing functionalities, and CBP will provide guidance on how to file refund declarations in the new system,” the agency told the court.