How should businesses approach tariff refunds?

The Supreme Court ruling that struck down the Trump administration’s tariffs imposed under an economic emergency declaration could open the door to billions of dollars in tariff refunds for businesses, though the ruling didn’t specify a process for handling those refunds.

The Supreme Court ruled that President Donald Trump’s tariffs enacted under the International Economic Emergency Powers Act (IEEPA) were illegal because the underlying law doesn’t authorize the president to impose tariffs.

Striking down the tariffs sends the issue back to the lower courts, which could weigh in on the refund process. However, businesses are already able to file “post-summary corrections” with Customs and Border Protection (CBP), which collects tariffs for the Department of Homeland Security that are remitted to the Treasury Department, while the U.S. Court of International Trade (CIT) has authority over appeals.

Mike Snarr, partner at BakerHostetler and co-leader of the firm’s International Trade team, told FOX Business, “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.

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“For entries made within the last 10 months, importers may ask customs brokers to correct the customs declarations for refunds of recently paid IEEPA tariffs. For older entries, importers should file protests within the statutory deadlines,” Snarr added. 

“If protests are denied, importers should seek judicial review in the U.S. Court of International Trade seeking reliquidation. The CIT has expressly confirmed it has the authority to liquidate under these circumstances.”

The process of submitting and evaluating appeals for tariff refunds could prove challenging for businesses as well as the entities handling the claims and appeals due to the sheer volume of IEEPA tariffs collected from a multitude of firms since they were imposed last year.

Estimates for the amount of tariffs collected under IEEPA that are subject to possible refunds top $150 billion. The nonpartisan Tax Foundation put the figure at about $150 billion, while the Penn-Wharton Budget Model’s estimate was $175 billion. An analysis by JPMorgan suggested a range of $150 billion to $200 billion.

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Chris Desmond, a partner in PwC’s Customs and International Trade practice, said, “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.

“Customs brokers will be under significant strain, with limited capacity to manage a surge of post-summary corrections and protests across thousands of importers,” he explained. “Even where tariff refunds may be available, many companies will face internal capacity constraints. Customs and trade compliance teams are already stretched managing day-to-day filings, enforcement activity and ongoing tariff changes.”

Desmond said that, given the demands of undergoing detailed entry reviews, coordination with brokers and tight procedural deadlines, companies that “underestimate this workload risk timing delays to their financials while creating potential compliance issues if they request refunds on the wrong tariff lines.”

Tim Brightbill, co-chair of Wiley International Trade Practice Group, noted that “more than 1,000 lawsuits have already been filed at the U.S. Court of International Trade in an effort to secure tariff refunds in the event of a Supreme Court decision against the IEEPA tariffs.”

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Trump said at a press conference Friday that the Supreme Court’s ruling was “deeply disappointing” and criticized the high court for not addressing tariff refunds in the decision.

“I guess it has to get litigated for the next two years. So, they write this terrible defective decision, totally defective. It’s almost like not written by smart people. And what do they do, they don’t even talk about that,” Trump said.

Treasury Secretary Scott Bessent discussed potential tariff refunds in an interview with Reuters last month.

“It won’t be a problem if we have to do it, but I can tell you that if it happens — which I don’t think it’s going to — it’s just a corporate boondoggle,” Bessent said. “Costco, who’s suing the U.S. government, are they going to give the money back to their clients?”

Bessent added that the process for issuing tariff refunds could take a significant amount of time, saying, “We’re not talking about the money all goes out in a day. Probably over weeks, months, may take over a year, right?”