- By Priyanka Koul
- Fri, 20 Feb 2026 11:11 PM (IST)
- Source:JND
Trump Tariffs Case: The US Supreme Court ruled that the tariffs imposed by President Donald Trump under the guise of an economic emergency law were illegal. However, the court stopped short of providing a clear directive on how the government should go about refunding the estimated 175 billion dollars in unlawful tariffs that businesses have already paid.
While the Supreme Court did not specifically address the issue of refunding the money, Justice Brett Kavanaugh highlighted that the ruling is expected to have significant practical implications in the short term, including the need for refunds. He acknowledged that, during oral arguments, it was agreed that distributing refunds could prove "a mess." The case will now be sent back to the Court of International Trade to manage the refund process. Now, the next key question which arises is how will companies receive refunds now that the US Supreme court has rejected trump's tariffs?
What's the Process of Tariff Collection?
For most goods subject to tariffs, importers are required to post a bond with the Customs and Border Protection agency and pay an estimated tariff on the goods they bring into the United States. The government later determines the final tariff amount on those goods through a process known as liquidation, which typically takes place 314 days after the goods' entry. According to Reuters, if an importer has overpaid, the excess is refunded, if underpaid, the importer must settle the difference. Importers had sought a court order from the US Court of International Trade to halt the final tariff determination process while the Supreme Court reviewed the case, but that request was denied.
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What Steps Will Importers Need to Take to Claim a Refund?
More than 1,000 lawsuits have been filed by importers seeking refunds, and legal experts predict a surge in new cases following the Supreme Court's ruling. In a key decision made in December, the court affirmed its authority to reopen final tariff determinations and order the government to issue refunds, including interest. The Trump administration has indicated in court that it will not challenge this ruling, which trade experts believe clears the path for refunds.
To claim a refund, importers may need to take legal action by filing lawsuits with the Court of International Trade. It is uncertain whether a class action can be initiated to encompass the diverse range of companies affected by the tariffs. Importers have two years under US trade law to pursue a refund claim. However, the process could disproportionately impact smaller businesses, many of which have already been hit harder by the tariffs compared to larger, better-funded companies like Costco. Lawyers representing importers suggest that smaller businesses may choose to forgo a potential refund, given the significant legal and court fees involved.
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Despite the complexities, trade experts are optimistic that improved record-keeping and tracking systems put in place by the government will help streamline the refund process. Small businesses, in particular, have called for automatic repayments and expressed concerns about the government's scrutiny of paperwork, which could delay refunds.
Even if refunds are distributed, some companies might not receive the money they expect. This could happen if they were not the importer of record, the entity responsible for ensuring compliance with regulations and paying tariffs. Once the refunds are issued, the matter will likely depend on the contractual relationship between the company that paid the tariff and the importer of record. This could potentially lead to further legal disputes about who is entitled to the refunded money.
In the meantime, trade groups have warned that the entire refund process could take years, leaving companies in limbo while they wait for the government to resolve the situation.
( With Inputs from Agency )