Customs and Border Protection Says It Can't Immediately Refund Trump's Illegal Tariffs

U.S. Customs and Border Protection has informed a federal judge that it cannot immediately comply with an order to refund billions in tariffs imposed by former President Donald Trump, which the Supreme Court recently ruled were illegal under the International Emergency Economic Powers Act (IEEPA).

In a court filing ahead of a scheduled hearing, CBP told Judge Richard Eaton of the Court of International Trade that the agency lacks the current capability to process refunds for the so-called IEEPA tariffs. The agency estimated that approximately $166 billion in tariffs has been collected, with additional duty deposits related to these tariffs still pending.

Judge Eaton had ordered CBP to begin calculating the cost of processing shipments without assessing the tariffs and to issue refunds with interest to importers who had paid the IEEPA tariffs. The order, issued Wednesday, came in response to a lawsuit filed by Atmus Filtration but applies broadly to all importers who paid duties under the challenged tariff scheme.

Brandon Lord, executive director of the trade programs directorate at CBP's Office of Trade, stated in the filing that as of Wednesday, more than 330,000 importers had made over 53 million entries involving deposits or payments of duties imposed under IEEPA. This scale of operations presents significant logistical challenges for implementing a mass refund process.

During Wednesday's hearing, Judge Eaton expressed frustration with CBP's position, noting that the agency regularly handles similar processes. "Customs knows how to do this," Eaton said. "They do it every day. They liquidate entries and make refunds."

The Supreme Court's recent ruling validating the illegality of Trump's IEEPA tariffs has opened the door for widespread refund claims. Numerous importers have filed lawsuits seeking reimbursement for tariffs paid since last year, with Eaton being designated as the sole CIT judge handling these refund cases.

The inability to immediately comply with the refund order highlights the complex operational challenges facing federal agencies when implementing court decisions affecting massive financial transactions. While importers await refunds for what courts have determined to be illegally collected duties, the dispute underscores the ongoing legal and administrative fallout from Trump's trade policies.

The case continues to develop as Judge Eaton prepares to address CBP's compliance challenges and determine next steps for implementing the refund order. The outcome will have significant financial implications for thousands of businesses that imported goods during the period when the IEEPA tariffs were in effect.