A federal trade court judge has ordered US Customs officials to stop calculating tariffs imposed under emergency powers by President Donald Trump, clearing the way for a sweeping refund process after the Supreme Court ruled the duties unlawful.
In a ruling issued Wednesday, Judge Richard Eaton of the US Court of International Trade directed Customs and Border Protection to halt a key step in the tariff accounting process tied to duties imposed under the International Emergency Economic Powers Act (IEEPA). The order is intended to simplify refunds for importers who paid the now-invalid levies.
The decision follows the Supreme Court’s 6–3 ruling on February 20, which found that Trump lacked authority to impose sweeping “reciprocal” tariffs using the emergency powers law.
The high court concluded that the president could not unilaterally impose broad import taxes because the constitutional authority to levy tariffs lies with Congress.
Importers ‘entitled to benefit’ from Supreme Court decision
In his ruling, Eaton wrote that “all importers of record” were “entitled to benefit” from the Supreme Court decision invalidating the tariffs.
The judge also made clear that he would oversee the growing wave of litigation over refunds stemming from the decision.
Eaton wrote that he alone “will hear cases pertaining to the refund of IEEPA duties.”
During a hearing in Manhattan, Eaton stressed that the law requires the government to return the money collected under the invalidated tariffs.
“The law is clear,” Eaton said during a hearing.
He added that the refund process should proceed efficiently.
he believes the refund process can be carried out “pretty smoothly.”
Potential refunds could exceed $175 billion
The ruling could carry enormous financial implications for the federal government.
According to estimates by the Penn Wharton Budget Model, the government collected more than $130 billion in the tariffs through mid-December, with total refunds potentially reaching $175 billion.
Hundreds of thousands of importers may have paid the duties, and more than 2,000 refund lawsuits have already been filed in the trade court.
“This is a great decision for importers and consumers who paid,” said Barry Appleton, a law professor and co-director New York Law School’s Center for International Law.
“It will make customs brokers busy. It should make things easier for the courts — and get a process underway for those importers who paid within the last 180 days.”
Court moves to simplify complex refund process
At the center of the dispute is a customs procedure known as “liquidation,” the stage at which the government finalises the duties owed on imported goods.
Under Eaton’s order, customs officials must stop including the invalidated tariffs when completing that process.
The judge also ordered the government to revisit certain entries that had already been finalized and recalculate the duties without the contested tariffs.
Eaton also ordered officials to recalculate certain duties that had passed that step of the customs process, removing Trump’s contested tariffs.
The move is designed to prevent complications that could arise if the tariffs were finalized and importers were forced to pursue individual court claims to recover the money.
Trump Administration expected to appeal ruling
The Trump administration is expected to challenge the decision as officials work out how to handle the massive refund effort.
Trade lawyer Ryan Majerus, a former US trade official now at King & Spalding, said the government could seek more time.
He said he expects the government to appeal or “seek a stay to buy more time for US Customs to comply.”
During the hearing, a Justice Department lawyer argued that implementing the refunds would require coordination across several agencies and could take significant time.
However, Eaton expressed skepticism that the process should be delayed.
“The Supreme Court told you what your position is,” he said. “Your position is that you are going to refund that money.”
The government pushed back on the scope of the refunds.
Burke pushed back, saying it is not the government’s position “that every single importer will get a refund” because some may “have to file a claim in this court.”
Lawsuits from importers continue to mount
The judge’s order arose from a lawsuit filed by Atmus Filtration, a Tennessee-based manufacturer seeking about $11 million in tariff refunds.
Although relatively small compared with the broader litigation, the case raised a critical question about how the customs process should operate following the Supreme Court decision.
The ruling also confirmed that Eaton will handle the growing number of refund claims currently pending before the trade court.
In the meantime, US Customs and Border Protection must design a system capable of processing what could become one of the largest tariff refund efforts in American history.
Customs frequently processes tariff refunds in routine cases, but its infrastructure was not designed for such a massive undertaking.
Trade lawyer Alexis Early noted that the complexity of the administrative process could determine how quickly companies recover their money.
“The devil will be in the details of the administrative process.”
Refund fight could stretch on for months
Despite the court’s order, the legal battle over Trump’s tariffs is far from over.
The judge scheduled another hearing for Friday and instructed the Justice Department to explain how the government intends to implement refunds.
While the administration may pursue appeals, Eaton emphasized that the Supreme Court’s decision left little room for doubt about the government’s obligation. “Every single cent of IEEPA duties that was imposed must be refunded.”
