US court orders refunds for Trump tariffs
What's the story
In a major blow to President Donald Trump's administration, a federal judge in New York has ordered companies that paid certain tariffs during his tenure to be refunded. The decision comes after the Supreme Court struck down these levies last month. Judge Richard Eaton of the United States Court of International Trade issued the ruling on Wednesday.
Court order
Judge Eaton clarifies order's scope
Judge Eaton clarified that all "importers of record" are entitled to the benefits of the Supreme Court's ruling. The apex court had recently struck down sweeping double-digit import taxes imposed by Trump last year under the 1977 International Emergency Economic Powers Act (IEEPA). The judge stressed that his order isn't limited to select plaintiffs but applies broadly to companies that paid duties under this law.
Refund process
Refunds could reach $175 billion
The federal government collected over $130 billion in these tariffs through mid-December, and total refunds could ultimately reach $175 billion, according to estimates by the Penn Wharton Budget Model. The ruling comes as a response to a case filed by Atmus Filtration, a Nashville-based manufacturer of filters and other filtration products. The legal process sped up earlier this week when the US Court of Appeals for the Federal Circuit rejected Trump's administration's attempt to delay refund processing.
Refund hurdles
Challenges in processing refunds
With the court's order now in place, US Customs and Border Protection will have to create a system to process these refunds. However, trade lawyers say its systems were not designed for repayments on this scale. Ryan Majerus, a partner at King & Spalding and former US trade official, expects the government to appeal or seek a stay for more time for compliance.
Tariff update
New global tariff proposed by Treasury Secretary
Despite the court's ruling, it remains unclear how quickly businesses will get their payments. The decision is a major blow to Trump's administration, which had relied on these tariffs as part of its trade strategy. Meanwhile, US Treasury Secretary Scott Bessent has announced plans for a new 15% global tariff this week, higher than the previous 10%. The proposed levy is meant to replace those invalidated by the Supreme Court.