U.S. importers will be facing many hurdles trying to recover billions in tariff costs now that the Supreme Court has ruled President Donald Trump’s International Emergency Economic Powers Act, or IEEPA, tariffs are illegal.
Companies large and small may be eligible for refund payments that in total could reach hundreds of billions of dollars, but trade attorneys have warned that tariff refunds could be denied or delayed, depending on how U.S. courts rule and how the legal system and U.S. Customs and Border Protection go about issuing any eligible payments.
Record tariff revenue has been recorded by the U.S. government, with tariff collections surging in January to $30 billion and reaching a year-to-date total of $124 billion. That is up 304% from the same period in 2025.
The Supreme Court decision could mean as much as $175 billion sought in refunds, according to estimates, but the ruling was silent on whether tariffs that have been paid under the higher rates will need to be refunded.
In his dissent from the majority Supreme Court decision on Friday, Justice Brett Kavanaugh wrote: “the Court’s decision is not likely to greatly restrict Presidential tariff authority going forward. But the Court’s decision is likely to generate other serious practical consequences in the near term. One issue will be refunds. Refunds of billions of dollars would have significant consequences for the U. S. Treasury. The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”
Trump wrote in a social media post back on Jan. 12 that “it would take many years to figure out what number we are talking about and even, who, when, and where, to pay.” He added, “It would be a complete mess, and almost impossible for our Country to pay.”
At a White House press conference on Friday afternoon, Trump raged against the Supreme Court decision and said of paying the refunds, “I guess it has to get litigated for the next two years. … We’ll end up being in court for the next five years.”
Trump also said he would sign an order to impose a 10% global tariff under Section 122 of the Trade Act of 1974, “over and above our normal tariffs already being charged. And we’re also initiating several section 301, and other investigations to protect our country from unfair trading practices of other countries and companies,” Trump added, referring to another section of the 1974 act.
Lori Mullins, director of operations at Rogers & Brown Custom Brokers, says her initial view of the Supreme Court decision is that it does not grant or guarantee refunds. “They have remanded this back down to the lower courts to decide if refunds will be issued. Without knowing for certain, many believe that the refunds will not be issued retroactively,” she said. For importers hoping for refunds, “the answer is yes, we have a ruling but we do not have a ruling on if any refunds will be granted. That will be handled by a lower court at a future date/time,” she said.
“Keep in mind also that several countries have also already signed written agreements with specific tariff rates such as the signed agreement with the UK for a flat 15% tariff. This does not impact those already signed agreements so we are not sure, right now, how those country specific agreements will be impacted if at all,” Mullins added.
In the lead-up to the decision, importers and customs experts have been pushing back on claims about refunds being a “messy” process, saying that because the tariffs being paid are itemized, the process for refunding the money should be straightforward.
The Court of International Trade is typically in charge of refund processes. Trade attorneys do expect the case to be sent back to the United States Court of Appeals for the Federal Circuit, which would presumably then remand the case to the CIT to decide on how to handle refunds.
Timothy Keeler, partner and co-head of international trade practice at Mayer Brown and former chief of staff for U.S. Trade Representative Susan Schwab, believes refunds will ultimately be due to companies. “There will be refunds,” he said. “It’s just not clear what the process will be to get refunds. It’s not clear if companies will have to file in court and become a plaintiff to get refunds, or whether it’ll end up being an administrative process,” handled by U.S. Customs and Border Protection, he said.
For starters, the Court of International Trade and litigants who file cases against the tariffs, in coordination with the U.S. government, would need some time to figure out how to manage any refund process. The Department of Justice and the litigants in the tariff cases previously asked the CIT to appoint a steering committee to manage the more than 1,000 refund-related cases filed to date. It’s common for a steering committee to be established to manage the tariff repaying process.
Even if courts ultimately rule refunds are required, importers betting on a cash infusion from tariff refunds should be aware there’s no set timeline and any rush for refunds could overwhelm the system and likely lead to long delays.
Joyce Adetutu, international trade lawyer at Vinson & Elkins, said her firm is telling clients it is going to be difficult to issue a broad-scale refund with the “push of a button.”
“I don’t think that is going to be the scenario here,” Adetutu said. “I think what’s more likely is that the CIT and the government, Customs, are going to work together to try to allow those who have preserved their claim for a refund to seek that refund … and those who don’t protest will forfeit any refund,” she added.
“We believe it may take months, if not years, to be decided by the CIT,” said Greg Tompsett, vice president of customs brokerage USA at logistics company Kuehne + Nagel. “The extended period of time may also result in additional subsequent lawsuits, which may drive that back to the Supreme Court. So the good news is we do have some finality on the decision. The bad news is there is no immediate action to be taken by any importer to request refunds or to go back after that money,” he said.
Companies will not only be seeking billions in tariff refunds, but billions that are tied up in customs bonds and collateral. Tariffs not only lead to additional import taxes, but by inflating the cost of the products, result in the need for importers to increase the value of customs bonds the government requires them to hold.
International trade experts told CNBC that with some tariffs increasing from 10%-25% or more for certain products, importers are facing customs bond amounts that now range from the minimum bond amount by regulation of $50,000 to as high as $450 million. The increase in bond values have left some companies forced to put up additional money in the form of collateral to ensure they could pay the tariffs.
The rise in tariffs and related need for bonds and collateral has led to a historic number of “bond insufficiencies.” CBP told CNBC it identified more than 24,000 customs bond “insufficiencies” valued at nearly $3.6 billion. That’s double the 2019 level when insufficiencies first soared due to Trump’s first-term tariffs under Section 301 of the 1974 Trade Act.
Importers have told CNBC because tariffs are itemized, as are their customs bonds and collateral documentation, in theory they should be able to receive their refunds quickly. However, trade attorneys also say it may be difficult for companies to get any refunds on bond overpayment or collateral quickly because the insurers will want to make sure they are not exposed to any tariff payments.
Vincent Moy, international surety leader for Marsh Risk, recently told CNBC that companies should expect some lag time in receiving these customs bond funds due to insurance paperwork requirements. The insurance company will need to verify and audit the paper trail before it releases any collateral.
Some sureties have collateral return review procedures that can take 30 to 60 days for them to go back to underwriting to review. Many small and medium-sized businesses were expected to be reaching out to their insurers ahead of the Supreme Court decision to get the process of review started. “If you are hoping that the collateral will just be returned in due course, the squeaky wheel may make this happen a little bit faster,” Jennifer Diaz, board-certified international attorney at Diaz Trade Law, recently told CNBC.
Democrats on Capitol Hill weren’t waiting to press for action from the administration after the court loss. U.S. Sen. Maria Cantwell, D-Wash., ranking member of the Senate Committee on Commerce, Science and Transportation and senior member of the Senate Finance Committee, sent a letter to Treasury Secretary Scott Bessent asking for details on administration plans to refund businesses that paid the illegal tariffs.
“Many American businesses, especially small and medium-sized businesses, have struggled to pay these illegal tariffs and, for some, the financial strain has placed them on the brink of bankruptcy,” wrote Cantwell. “It is essential Treasury implement an expeditious and transparent process to remediate the financial harm that resulted from these illegal tariffs.”
