US agency, judge to seek path to tariff refunds

The CBP has indicated that it has accepted and begun processing claims for nearly $90 billion in refunds, representing what it estimates could be up to $127 billion in so-called Phase 1 refunds, which are considered the least complex cases. According to a court filing on June 4, the agency stated that $22 billion in refunds have already been completed and forwarded to the Treasury Department for distribution to importers.

The subsequent phase of refunds involves more legally intricate and older tariffs, known as liquidated tariffs. Typically, an importer pays an estimated tariff, and approximately a year later, the CBP finalizes the exact amount, a process called liquidation. The CBP has stated that it can only process liquidated tariffs in specific circumstances or if the importer initiates a lawsuit.

Smaller companies, which constitute the majority of importers, are concerned that the expense and the time and distraction associated with litigation may outweigh the potential benefit of obtaining a refund. Judge Eaton's letter on June 3, which appeared on the court docket, was a response to the government's resistance to his order for the CBP commissioner to attend Tuesday's hearing. The U.S. Court of Appeals for the Federal Circuit subsequently issued a temporary stay of that order, and Eaton agreed to permit a lower-ranking official from the CBP to attend.

The CBP has also contended that the Supreme Court ruled last year that federal judges do not have the authority to issue nationwide injunctions. To address this potential obstacle, companies have requested that Eaton certify a class of all importers who paid the illegal tariffs. Establishing such a class could empower Eaton to issue a single order applicable to all importers, thereby simplifying the refund process and eliminating the need for individual lawsuits.

The U.S. Supreme Court invalidated tariffs that President Donald Trump had imposed in February under an emergency economic law. The Trump administration, which had prioritized tariffs in its trade policy, has since utilized other legal avenues to implement new tariffs.