Companies fought for tariff refunds even before Supreme Court ruling

WASHINGTON – Before the Supreme Court overturned President Donald Trump's emergency tariffs, thousands of companies sued to recover an estimated $175 billion already collected, but government officials have said refunds will be sent without the need for litigation.

Costco Wholesale, Revlon and Goodyear Tires were among the companies seeking refunds through lawsuits at the U.S. Court of International Trade. The companies argued the tariffs Trump imposed were unlawful under a 1977 law that has never been used for that purpose.

But government officials stated in court filings that refunds would be provided if the Supreme Court overturned Trump's tariffs. The trade court ruled in December, based on those government assurances, that it wasn't necessary to block the collection of tariffs through litigation.

Businesses welcome decision overturning Trump's 'emergency' tariffs

Dan Anthony, executive director of the advocacy group We Pay the Tariffs, said small businesses have taken out loans, frozen hiring and canceled expansion plans to cope with tariffs. With refunds in hand, the businesses will hire workers, expand operations and pay down debt, he said.

"Today's Supreme Court decision is a tremendous victory for America's small businesses who have been bearing the crushing weight of these tariffs,” Anthony said in a statement Feb. 20.

Trump told reporters at the White House that his first question about the decision was whether refunds were ordered. But the ruling doesn't mention refunds.

“I guess it has to get litigated for the next two years," Trump said. “It’s not discussed. We’ll end up being in court for the next five years."

Bessent: refunds 'may take over a year'

The lawsuits don't detail how much has been paid in contested tariffs, but refunds could be substantial.

Trump warned on social media Jan. 12 that the refunds could total hundreds of billions of dollars. They might make it possible for other countries and companies to halt construction that had started on new U.S. factories because of tariffs, he said.

"It would be a complete mess, and almost impossible for our Country to pay," Trump said. "Anybody who says that it can be quickly and easily done would be making a false, inaccurate, or totally misunderstood answer to this very large and complex question."

The government will have to refund about $175 billion in tariffs that the Supreme Court ruled were collected without congressional authorization, according to an estimate Feb. 20 by the Penn Wharton Budget Model at the University of Pennsylvania.

The high court ruled that Trump wasn’t authorized to impose tariffs under the 1977 International Emergency Economic Powers Act. The emergency tariffs account for about half what the government collects in tariffs.

“We project that reversing the IEEPA tariffs will generate up to $175 billion in refunds,” the Penn Wharton Budget Model said. “Unless replaced by another source, future tariff revenue collections will fall by half.”

The Committee for a Responsible Federal Budget estimated in October that roughly $90 billion of the $195 billion collected in tariffs during the first year of Trump’s term could be refunded, based on Customs and Border Protection figures. The government is collecting more than $30 billion a month in customs duties, according to Treasury statements.

Treasury Secretary Scott Bessent told Reuters on Jan. 9 that the administration has adequate funds to refund tariffs, but repayments would be spread out over weeks or even a year. The Treasury had nearly $774 billion in cash on hand a day prior.

"We're not talking about the money all goes out in a day,” Bessent said. “Probably over weeks, months, may take over a year, right?"

Bessent argued refunds would be a boondoggle for companies that already passed along costs to customers. But the lack of inflation, which stood at an annual rate of 2.7% in December, suggested importers were waiting for the high court's decision before raising prices.

"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?"

Trump, companies agree refunds could be 'complicated'

Part of the reason for the lawsuits was uncertainty about how refunds might be handled.

At the court’s oral argument on Nov. 5, justices and lawyers listed possible remedies besides lawsuits, including administrative refunds through Customs and Border Protection, which collects tariffs, or simply not collecting tariffs from here on.

“The process is going to be complicated, however it shakes out, if there is an opportunity for refunds,” said Monica Welt, general counsel for the Retail Industry Leaders Association and president of the Retail Litigation Center.

How are tariff refunds traditionally handled?

Part of the reason companies filed lawsuits for refunds of Trump tariffs was that the administrative deadlines were looming, and they didn't want to lose the chance to contest the fees.

Traditionally, Customs and Border Protection finalizes tariffs, a process called "liquidation," within 314 days after imported products have entered the country. Companies were bracing for the liquidation of Trump's contested tariffs to start as early as Dec. 15, 2025.

Even after liquidation, companies have another 180 days to protest a tariff through a process called "reliquidation." But not all tariffs are subject to protests. So companies unleashed the lawsuits as a precaution.

Costco drew the spotlight with its December lawsuit, even though many other companies filed suits before and after it. The food wholesaler argued litigation was necessary because even if the tariffs were ruled unlawful, importers who paid the duties “are not guaranteed a refund” without a court judgment.

A Justice Department stipulation filed May 28 in one of the lawsuits said that the government "will not oppose" refunding tariffs "found to be collected unlawfully" on merchandise subject to the emergency tariffs "after a final and unappealable decision has been issued."

The U.S. Court of International Trade, which hears the cases, ruled Dec. 15 that it wouldn't block the tariffs while waiting for the Supreme Court's decision based on the government's assurances.

The ruling said "the Government has taken the 'unequivocal position' that 'liquidation will not affect the availability of refunds after a final decision'" in the Supreme Court case.