Trump administration to appeal judge’s order on tariff refunds

American companies, from large retailers to small manufacturers, have started receiving refunds on tariffs the Supreme Court declared unlawful, but the Trump administration announced it will appeal a federal judge’s order that broadens refund eligibility to all importers [1].

Key takeaways

• The Supreme Court ruled President Trump lacked authority to impose sweeping import taxes, prompting a refund process for billions in duties [1].
• As of May 22, Customs and Border Protection had accepted $85 billion in refund applications and directed $20.6 billion in payments [1].
• The administration intends to appeal Judge Richard K. Eaton’s “universal injunction” that allows all importers to claim refunds, not just those filing lawsuits [1].
• The appeal could delay the $166 billion repayment effort, which the court estimates the government owes to roughly 330,000 importers [1].
• Major firms such as Costco, Walmart and FedEx say refunds will be used to lower prices or returned to customers, though the pace of payments remains slow [1].

Administration’s appeal and the legal dispute

The Department of Justice filed notice that it will challenge Judge Eaton’s order, arguing the judge exceeded his authority by extending refunds to “all importers of record” after the Supreme Court’s decision [1]. The administration also objected to a subpoena for CBP Commissioner Rodney Scott to testify before the U.S. Court of International Trade, proposing that his deputies appear instead, citing his status as a high‑ranking presidential appointee [1]. Eaton, however, insisted he must hear directly from Scott to assess whether the government will return all duties collected between April 2025—when the “reciprocal” tariffs were imposed—and the February ruling that struck them down [1].

Customs and Border Protection has been processing refunds in phases, prioritizing payments that were not finalized before the Supreme Court’s 6‑3 decision [1]. The agency reported that the first successful refunds reached bank accounts on May 12, roughly three weeks after importers could begin filing claims through an online portal [1]. By late May, the Treasury had been directed to issue $20.6 billion, while applications covering $85 billion—more than half of the estimated $166 billion owed—were awaiting processing [1].

Business reactions and potential impact

Retail giants and smaller firms alike view the refunds as essential for easing price pressures and sustaining operations. Walmart’s CFO indicated that any refund would represent less than 0.5 % of the company’s $483 billion annual U.S. sales, yet the firm plans to pass savings on to consumers [1]. Costco’s CEO said the company would return tariff costs to members, though the timing and amount depend on the refund schedule and ongoing litigation [1]. Shipping companies that acted as customs brokers, including FedEx, UPS and DHL, pledged to pass refunds back to the shippers and consumers who originally paid the duties [1].

For many smaller importers, partial refunds are already being used to cover remaining tariff liabilities, reduce debt or keep operations afloat after a year of heightened costs. Owners of businesses such as Greenbar Distillery and grooming brand Manscaped described the refunds as a lifeline, though they noted the disbursement process remains slow and uneven [1].

Why it matters

The dispute centers on how the U.S. government will rectify what the courts deem an unlawful collection of duties, a matter that affects potentially 330,000 importers and a total of $166 billion. If the administration’s appeal succeeds, the broader refund eligibility could be narrowed, limiting relief to only those who have filed lawsuits and potentially slowing the overall repayment timeline. Conversely, a failure to appeal would keep the current “universal injunction” in place, allowing a larger pool of businesses to seek refunds, which could accelerate price reductions for consumers but also strain Treasury resources. The upcoming June 9 hearing on the subpoena and the pending appeal will shape the pace and scope of the refund program, with significant implications for trade‑dependent businesses across the United States.