Judge rules companies are entitled to refunds for Trump tariffs overturned by the Supreme Court

Judge Rules Companies Can Seek Refunds for Trump Tariffs Overturned by Supreme Court

WASHINGTON — A federal court in New York has delivered a setback for the Trump administration, as Judge Richard Eaton of the U.S. Court of International Trade declared that companies subject to tariffs invalidated last month by the Supreme Court are eligible for refunds. The ruling centered on the president’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose sweeping import taxes, which the Supreme Court deemed unconstitutional.

The justices ruled that the authority to set and alter tariffs lies with Congress, not the executive branch. This decision invalidated Trump’s “reciprocal” tariffs, which targeted nearly every country with high import duties. Eaton emphasized that he would handle cases related to refunding IEEPA duties, providing a clear pathway for companies to reclaim overpaid taxes.

Tariff Refunds and Financial Impact

Customs officials had collected over $130 billion in tariffs by mid-December, with potential refunds reaching as high as $175 billion, according to the Penn Wharton Budget Model. The ruling brings clarity to a process the Supreme Court did not address in its February 20 decision. This includes the “liquidation” phase, where importers have 180 days to challenge duties after customs finalizes their assessment.

“This decision benefits importers and consumers who paid the tariffs,” noted Barry Appleton, a law professor at New York Law School. “It should streamline the process and reduce legal delays for those affected within the last 180 days.”

Atmus Filtration, a Nashville-based company specializing in filtration products, was the plaintiff in Eaton’s case. The ruling now forces U.S. Customs and Border Protection to revise its procedures, as the current system was not built for mass refund claims. “The administrative process will face challenges in implementation,” said trade lawyer Alexis Early of Bryan Cave Leighton Paisner.

On Monday, another court joined the effort to expedite refunds, rejecting the administration’s attempt to delay the process. The U.S. Court of Appeals for the Federal Circuit has advanced the next stage by directing the case to the New York trade court. This marks a critical step toward resolving the financial impact of the overturned tariffs.