In a defeat for the Trump administration, a federal judge in New York ruled Wednesday that companies that paid tariffs struck down last month by Supreme Court are due refunds. Judge Richard Eaton of the US Court of International Trade wrote that "all importers of record" were "entitled to benefit" from the Supreme Court ruling that struck down sweeping double-digit import taxes President Trump imposed last year under the 1977 International Emergency Economic Powers Act, the AP reports.
Eaton also wrote that he alone "will hear cases pertaining to the refund of IEEPA duties." The ruling offers some clarity about the tariff refund process, something the Supreme Court did not even mention in its Feb. 20 decision. Trade lawyer Ryan Majerus, a partner at King & Spalding and a former US trade official, says he expects the government to appeal or "seek a stay to buy more time for US Customs to comply."
- The federal government collected more than $130 billion in the now-defunct tariffs through mid-December and could ultimately be on the hook for refunds worth $175 billion, according to calculations by the Penn Wharton Budget Model.
- Eaton was ruling specifically on a case brought by Atmus Filtration, a Nashville, Tennessee, company that makes filters and other filtration products, claiming a right to a tariff refund. At least 1,800 companies have flooded the courts with refund requests.
On Monday, another federal court rejected the Trump administration's attempt to slow the refund process. The US Court of Appeals for the Federal Circuit started the next phase in the refund process by sending it to New York trade court to sort out. Now, the US Customs and Border Protection agency must come up with a way to process the refunds. Customs routinely refunds tariffs when there's been some kind of error, but its system was "not designed for a mass refund," says trade lawyer Alexis Early, a partner at Bryan Cave Leighton Paisner. "The devil will be in the details of the administrative process."
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