NEW YORK — American businesses big and small have started receiving tariff refunds after the U.S. Supreme Court ruled that President Trump lacked the constitutional authority to impose higher import taxes on goods from nearly every other country.
The process could grind to a halt, however, after the Trump administration said Friday that it intended to appeal a federal judge’s order to allow all companies that paid the illegal import taxes to seek refunds, not just the ones that filed lawsuits.
Until the Department of Justice informed the judge of its planned appeal, the refund system overseen by U.S. Customs and Border Protection had been working fairly smoothly. Refunds reached the bank accounts of the first successful applicants on May 12, about three weeks after American importers and their customs brokers could start submitting claims through an online system, according to CBP.
Applications for refunds totaling $85 billion — more than half of the $166 billion the agency estimated the government owes to companies that paid the illegal tariffs on imported goods — were accepted for processing as of May 22, CBP reported in a legal filing earlier in the week. It said it had so far directed the Treasury Department to issue $20.6 billion in refunds.
The administration revealed its appeal preparations while objecting to a demand by Judge Richard K. Eaton for CBP Commissioner Rodney Scott to appear in the U.S. Court of International Trade to answer questions about how long it would take to repay all 330,000 importers that might be eligible for refunds. The judge has scheduled a June 9 hearing on why he shouldn’t require the government do whatever it takes to speed up the process.
Justice Department lawyers asked Eaton to allow one or two of Scott’s deputies to appear in his place, arguing that as a high-ranking presidential appointee, the CBP chief could not be compelled to testify in court. They also argued that Eaton exceeded his own authority when he determined in March that the Supreme Court’s ruling entitled “all importers of record’’ to refunds.
“For that reason, defendants intend to appeal the court’s universal injunction,” the lawyers wrote, adding that CBP would continue to move “as quickly as it can to process refunds in a phased approach” for businesses that filed some 485 pending trade court complaints to assert their rights to refunds.
In a terse reply Friday, Eaton said he needed to hear directly from Scott whether the government would return all of the money it collected between when Trump imposed what he called “reciprocal” tariffs on goods from most countries in April 2025 and when the Supreme Court struck them down in late February.
“This case involves $166 billion,” the judge wrote. “It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties.”
More than 1,000 companies, including Costco, Goodyear, Dole Fresh Fruit and Kohl’s, filed lawsuits to recoup their tariff costs. The judge said Wednesday he intended to allow cases he put on hold while CBP figured out how to handle refund claims — they numbered 485 in mid-March — to proceed.
Customs and Border Protection is handling refund claims in phases, focusing first on payments that weren’t finalized before the Supreme Court handed down its 6-3 decision. CBP officials have said those later payments were more straightforward to process.
Importers are required to make estimated tariff payments when goods enter the U.S. The declared items then enter a process called “liquidation,” in which CBP determines how much in import taxes was owed. The decision becomes final after 180 days unless the payer contests the bill.
In Friday’s filing, the Justice Department said the agency did not have the technological ability or the legal authority to recalculate liquidated accounts without “importer-specific orders” in each lawsuit.
Some national retail chains said they planned to use their tariff refunds to lower customer prices on some items. Walmart Chief Financial Officer John David Rainey told analysts last week that the company would implement price cuts even though the maximum refund it might be eligible for represented less than half of 1% of Walmart’s $483 billion in annual U.S. sales.
Costco intends to return the tariff costs that it passed on to members, Chief Executive Ron Vachris said. How much of its refund the big-box retail chain redistributes, when and in what form, depends on factors such as the size of the refund, when it arrives and developments in a lawsuit seeking tariff compensation for Costco customers, Vachris told investors Thursday.
Consumers could first see refunds from shipping companies such as FedEx, UPS and DHL, which acted as customs brokers when they delivered products ordered from overseas. The companies charged either the sellers that shipped the packages or the buyers who received them and turned the tariffs they collected over to CBP.
All three promised to return any refunds they get to the customers who paid the import taxes. Last week, FedEx said it was “working to swiftly process refunds and return them to the shippers and consumers who originally bore those charges.”
The Supreme Court invalidated the country-by-country tariff rates Trump set by citing the 1977 International Emergency Economic Powers Act. Others he imposed under different rationales remain in effect. Trump also has moved to introduce new import taxes since the court’s Feb. 20 ruling.
Some smaller companies told the Associated Press that the partial refunds they’ve received so far would go toward paying remaining or future tariffs, reducing debt or just keeping the lights on after more than a year of uncertainty and additional import costs.
Melkon Khosrovian, who owns Greenbar Distillery in Los Angeles, said he applied for a tariff refund of about $90,000 for 17 shipments and has received $18,000 covering four of them. Certain types of herbs, spices and packaging are hard to find domestically, so Khosrovian said he imports them.
The tariffs were “painful,” he said. He invested money to automate his bottling process last year so he wouldn’t have to pay as many workers. The move allowed him to reduce his 13-person staff by three, but Khosrovian noted that the White House had argued the tariffs would create more U.S. manufacturing jobs, not eliminate them.
“Our choices were bad and worse: raise prices and lose customers, or keep prices the same and not make any money,” he said.
Men’s grooming brand Manscaped has received about 30% of the $12 million in refunds it applied for, President Kevin Datoo said. He said the San Diego company deferred investments and took on debt to pay tariffs on imports from Indonesia, China and elsewhere in Asia last year.
“We need to shore up the balance sheet, because there’s still a whole second chapter here,” Datoo said.
Jay Foreman, chief executive of toy company Basic Fun, said he received about $450,000, or 7% of his total claim, over two consecutive days this month. He took the initial repayment as a positive sign but said that after having less than $10,000 refunded since then, the process seemed like a “total slow roll.”
“It’s time to release the funds back into the economy,” Foreman said, “especially given how much we and others need these funds to support our businesses and fund our operations.”
Anderson writes for the Associated Press. AP writers Anne D’Innocenzio in New York and Lisa Leff in London contributed to this report.
