Trump plans to appeal decision allowing importers to seek refund of canceled tariffs

NEW YORK (AP) — Businesses large and small have begun receiving tariff refunds after the U.S. Supreme Court ruled that President Donald Trump does not have the constitutional authority to impose higher import taxes on goods from almost any other country.

The process could grind to a halt, however, after the Trump administration said Friday it intends to appeal a federal judge’s order allowing all companies that paid the invalidated duties to seek refunds, not just those that filed lawsuits.

READ MORE: Federal Court Rules Against Trump’s New Global Tariffs

Until the Justice Department informed the judge of its proposed appeal, the refund system overseen by U.S. Customs and Border Protection was working fairly well. Refunds reached the bank accounts of the first successful applicants on May 12, about three weeks after importers and their customs brokers could begin submitting their applications through an online system, according to CBP.

Refund requests totaling $85 billion — more than half of the $166 billion the agency estimates the government owes to companies that paid tariffs on imported goods — were accepted for processing on May 22, CBP reported in a legal filing earlier in the week. He said he has so far ordered the Treasury Department to issue $20.6 billion in refunds.

The administration revealed its appeal preparations while opposing a request from Judge Richard K. Eaton that CBP Commissioner Rodney Scott appear before the U.S. Court of International Trade to answer questions about how long it would take to reimburse the 330,000 importers who may be eligible for a refund. The judge has scheduled a hearing for June 9 to explain why he should not require the government to do whatever it takes to speed up the process.

READ MORE: Trump says he will lift some tariffs on Scotch whiskey after royal visit

Justice Department lawyers asked Eaton to allow one or two of Scott’s deputies to appear in his place, arguing that as a high-ranking appointee of the president, the CBP chief could not be compelled to testify. They also argued that Eaton exceeded its authority when it determined in March that the Supreme Court’s ruling allowed “all importers of record” to obtain a refund.

“For this reason, Defendants intend to appeal the court’s universal injunction,” the lawyers wrote, adding that CBP would continue to act “as expeditiously as possible to process refunds in a phased approach” for companies that have filed legal complaints asserting their rights to refunds.

In a written response, Eaton said he needed to hear directly from Scott whether the government would return all the money it collected between the time Trump imposed what he called “reciprocal” tariffs on most countries in April 2025 and the time the Supreme Court struck them down in late February.

“It is beyond dispute that the remedy for this illegal collection is for the United States Government to refund the illegally collected duties,” the judge wrote.

Installed repayments

More than 1,000 companies, including major corporations like Costco, Goodyear Tire, banana and pineapple distributor Dole Fresh Fruit and department store chain Kohl’s, have filed lawsuits to recoup their tariff costs. The judge said Wednesday that he intends to allow the cases he had put on hold while CBP figures out how to process the refund requests — there were 485 of them as of mid-March — to continue.

Customs and Border Protection is processing refund requests in stages, focusing first on payments that were not finalized before the Supreme Court issued its 6-3 decision. CBP officials said these later payments were simpler to process.

READ MORE: Already under financial pressure, farmers further constrained by tariffs and war in Iran

Importers are required to make estimated customs duty payments when goods enter the United States. The declared items then enter a process called “liquidation,” in which CBP determines the amount of import taxes that were owed. The decision becomes final after 180 days unless the payer contests the invoice.

In the filing Friday, the Justice Department said the agency did not have the technological capacity or legal authority to recalculate liquidated accounts without “importer-specific orders” in each lawsuit.

Promised price cuts

Some national retail chains said they plan to use their duty refunds to reduce customer prices on certain items. Walmart Chief Financial Officer John David Rainey told analysts last week that the company would implement price reductions even though the maximum rebate it could qualify for was less than half of 1% of Walmart’s $483 billion in annual U.S. sales.

Costco intends to return the fare costs it passed on to its members, CEO Ron Vachris said. How much of its refund the big-box retail chain redistributes, when and in what form, depends on factors such as the amount of the refund, when it arrives and the progress of a lawsuit seeking price compensation for Costco customers, Vachris told investors Thursday.

WATCH: Trump says he raised EU auto tariffs to 25%

Consumers were first able to see refunds from shipping companies such as FedEx, UPS and DHL, which acted as customs brokers when delivering products ordered overseas. The companies either charged the sellers who shipped the packages or the buyers who received them and remitted the rates they collected to CBP.

All three promised to return any refunds they get to customers who paid import taxes. Last week, FedEx said it was “working to quickly process refunds and return them to the shippers and consumers who originally incurred these charges.”

Bring reimbursements back into the business

The Supreme Court invalidated only the country-by-country tariff rates set by Trump by citing the International Emergency Economic Powers Act of 1977. Others, which he imposed for different reasons, remain in force. Trump has also moved to introduce new tariffs since the February 20 court ruling.

Some small businesses told The Associated Press that the tariff refunds they have received so far will go toward paying remaining or future tariffs or getting back on solid financial footing after more than a year of uncertainty and added costs.

Jay Foreman, CEO of toy company Basic Fun, said he received about $450,000, or 7% of his total claim, over two consecutive days. He viewed the repayment as a positive sign, but said that after repaying less than $10,000 since then, the process seemed to be a “totally slow process.”

“It’s time to put the funds back into the economy, especially given that we and others need these funds to support our businesses and fund our operations,” Foreman said.

Men’s grooming brand Manscaped received about 30% of the $12 million in reimbursement requested, President Kevin Datoo said. He said the San Diego company postponed investments and took on debt to pay tariffs on imports from Indonesia, China and elsewhere in Asia last year.

“We need to consolidate the balance sheet because there is still a whole second chapter here,” Datoo said.

Melkon Khosrovian, owner of the Greenbar Distillery in Los Angeles, said he requested a tariff refund of about $90,000 for 17 different shipments and received $18,000 for four of them. Certain types of herbs, spices and packaging are hard to find in the country, so Khosrovian said he imports them.

The tariffs were “painful,” he said. It invested money to automate its bottling process last year so it wouldn’t have to pay as many workers. The move allowed him to reduce his 13-person workforce by three, but Khosrovian noted that the White House had argued that the tariffs would create more U.S. manufacturing jobs.

“Our choices were bad, or worse: raise prices and lose customers, or keep prices the same and make no money,” he said.

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AP writers Anne D’Innocenzio in New York and Lisa Leff in London contributed to this report.

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