On April 2, 2025, invoking the International Emergency Economic Powers Act (IEEPA), former U.S. President Donald Trump signed and announced an executive order imposing reciprocal tariffs on all imported goods from every U.S. trading partner. Under the order, the United States applied reciprocal duties as an additional tariff layer on top of existing import taxes, fees, and other charges. The measure was designed as a response to countries deemed to have imposed unfavorable tariffs or trade policies against the United States. The duties were collected directly from businesses importing goods into the U.S.
The IEEPA allows U.S. presidents to declare a national economic emergency and implement special economic measures. However, analysts note that using the law as the legal basis for sweeping tariff measures against multiple trading partners had never been attempted before since the legislation was enacted. According to Reuters, economic forecasts by the Penn Wharton Budget Model suggested that the tariffs imposed under IEEPA generated more than $500 million in revenue per day.
Approximately 2,000 lawsuits have been filed with the United States Court of International Trade seeking refunds for tariffs collected under IEEPA. Court filings show that one complaint was submitted by Atmus Filtration Technologies, which said it had paid about $11 million in what it described as unlawful duties. More than 300,000 importers, most of them small businesses, have paid the tariffs. Many told Reuters they might abandon refund claims if forced to pursue lengthy litigation or navigate the complex administrative procedures of U.S. customs authorities.
In a ruling issued on February 20, the Supreme Court of the United States concluded that the IEEPA does not authorize a president to unilaterally impose broad tariffs on numerous trading partners, declaring the duties invalid. The court reaffirmed that tariff authority fundamentally lies with the U.S. Congress.
Following the ruling, the U.S. Customs and Border Protection (CBP) said all tariff codes related to executive orders issued under IEEPA since February 24 would be deactivated. These duties included a global reciprocal tariff structure starting at 10%, with higher rates for trading partners running large trade surpluses with the United States. Additional tariffs targeting China were also included in the suspension. However, the move does not affect other tariffs currently in force under separate legal authorities.
On March 4, a hearing on tariff refunds took place at the United States Court of International Trade in New York. Richard Eaton, appointed as the sole judge overseeing the importers’ refund lawsuits, ordered the U.S. government to begin returning the tariffs paid by importers—an amount that could reach billions of dollars. He also ruled that the refunds must include interest payments.
Under the U.S. import process, companies must pay an estimated duty when goods enter the country. The final amount is confirmed roughly 314 days later in a procedure known as “liquidation.” Judge Eaton instructed CBP to complete the determination of import costs for shipments that should not have been taxed, creating the basis for refund payments to businesses.
“Customs knows how to do this,” Eaton said during the March 4 hearing, adding that the agency could program its systems to automatically process refunds, as such reimbursements already occur when importers overpay estimated duties.
In court filings, CBP warned that determining import costs without the disputed tariffs would be an unprecedented undertaking, potentially requiring the manual review of more than 70 million import records. The agency had earlier asked the court for up to four months to assess possible refund mechanisms.
CBP data shows that by the end of 2025, the federal government had collected $134 billion in tariffs now deemed unlawful. Trade experts estimate the U.S. government could ultimately be required to return as much as $175 billion to businesses that paid duties under IEEPA.
However, when issuing its earlier ruling, the Supreme Court of the United States did not provide detailed guidance on how refunds should be implemented, leaving federal agencies struggling to determine the appropriate compensation procedures.
Ryan Majerus, a former senior official at the United States Department of Commerce and now a partner at King & Spalding, said the ruling suggests the court may favor a broad, uniform approach, meaning importers would generally be eligible for refunds under IEEPA. He added that the government could still challenge the scope of the ruling or request additional time for customs authorities to handle what is widely viewed as a massive and complex administrative task.
The U.S. customs agency must now develop a method to process the refunds. While CBP routinely handles reimbursements in cases of duty miscalculations, its systems “were not designed for mass refunds,” according to Alexis Early, a trade lawyer and partner at Bryan Cave Leighton Paisner. “The challenge lies in the details of the administrative process,” she said.
