Potential Massive Tariff Refunds Hinge on Supreme Court Decision
The fate of billions in tariff payments hangs in the balance as the Supreme Court prepares to hear arguments challenging the legality of presidential tariff authority, according to industry reports. The November 5 hearing will examine whether former President Donald Trump’s use of the International Emergency Economic Powers Act for imposing tariffs was lawful, with potential refunds affecting up to $108 billion in duties collected this year alone.
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Unprecedented Refund Scenario
Should the Supreme Court invalidate the tariff authority, sources indicate the U.S. government could be required to refund approximately half of the $150 billion in tariff revenue collected this year. Treasury Secretary Scott Bessent reportedly acknowledged in September that “if the court says it, we’d have to do it,” though experts suggest the refund process would be far from straightforward.
Analysts suggest that only specific tariffs would be eligible for refund, including those related to fentanyl trafficking on imports from Canada, Mexico and China, along with country-specific tariffs finalized in August. Greg Tompsett, VP of customs brokerage USA at Kuehne + Nagel, warned that Customs and Border Protection could face “100 times more” refund requests than anything previously handled.
Complex Refund Pathways
Experts outline two primary methods shippers typically use to seek tariff refunds, with the importer of record being the only party eligible to receive returned funds. The first approach involves filing post-summary corrections during the approximately 300-day “liquidation period” following goods entry into the U.S. The second method requires filing formal protests within 180 days after liquidation ends.
However, Alexander Schaefer of Crowell & Moring expressed concern that CBP might resist protests for IEEPA tariffs since the agency didn’t implement them through customs decisions. “Your beef is with them, not with us,” Schaefer anticipates CBP might respond to protest filers., according to further reading
Diverging Expert Views on Process
Industry leaders are divided on how potential refunds might be administered. Mike Short of C.H. Robinson envisions either automatic processing by Customs or additional work required by brokers. Greg Husisian of Foley & Lardner suggests an automatic process is possible given electronic filing systems, while noting CBP would likely issue guidance if refunds become necessary.
The timing remains uncertain, with several experts expecting the Supreme Court to remand the case to lower courts. Justin Angotti of Reed Smith cautioned that “it’s not going to be the Supreme Court rules in December, and you’ve got a refund check in January,” suggesting a negotiated timeline would likely emerge.
Preparation Strategies for Shippers
Two main preparation approaches have emerged among international trade experts, according to Kelsey Christensen of Clark Hill. Importers can either request liquidation extensions or allow liquidation to occur and file protests later. For companies with significant tariff exposure, seeking liquidation extensions may provide the safest approach.
A third option involves filing complaints in federal court, most likely the Court of International Trade. Schaefer recommends that companies with substantial funds at stake follow the approach of cases already before the Supreme Court and seek injunctions to suspend liquidation pending final decisions.
Regardless of strategy, experts emphasize that companies should confirm product classifications, maintain proper documentation including entry forms and bills of material, and understand which tariffs apply to specific entries since some imports may remain subject to additional duties like those under Section 232.
The Supreme Court’s decision could reshape international trade enforcement and establish new precedents for presidential emergency powers in economic policy, with the hearing representing one of the most significant trade law cases in recent years.
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References
- https://www.whitehouse.gov/…/
- https://www.nbcnews.com/meet-the-press/meet-press-september-7-2025-n1312693
- https://www.pwc.com/us/en/services/tax/library/pwc-ieepa-tariffs-understandin…
- https://www.clarkhill.com/…/
- http://en.wikipedia.org/wiki/International_Emergency_Economic_Powers_Act
- http://en.wikipedia.org/wiki/U.S._Customs_and_Border_Protection
- http://en.wikipedia.org/wiki/Law_firm
- http://en.wikipedia.org/wiki/Liquidation
- http://en.wikipedia.org/wiki/Tariff
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