Court rejects US administration attempt to slow tariff refund process

A federal court rejected the Trump administration’s attempt to slow the process of refunding billions of dollars’ worth of tariffs the Supreme Court struck down as illegal last month.

The US Court of Appeals for the Federal Circuit started the next phase in the refund process by sending it to a lower court to sort out.

In a court filing Friday, Trump’s Justice Department had urged the Federal Circuit to proceed cautiously and hold off for 90 days. But the judges refused.

The Supreme Court ruled Feb 20 that Trump’s sweeping tariffs on most countries in the world were illegal, clearing the way for the importers who paid them to seek refunds.

The Government had collected more than $130 billion from the tariffs by mid-December, and could ultimately be on the hook for refunds worth $175 billion, according to calculations by the Penn Wharton Budget Model.

But the Supreme Court offered no guidance on refunds; its decision did not even mention them. Now the US Court of International Trade in New York will decide how the complicated refund process should proceed.

“I would expect the Court of International Trade to quickly issue an order requesting a status update from the government on their plans with respect to refunds (or expedited briefing),” said trade lawyer Ryan Majerus, a partner at King & Spalding and a former US trade official. “I expect the court to take an aggressive posture, asking the government to justify how they intend to comply with the Supreme Court’s ruling.”

Siddartha Rao, a partner at law firm Hoguet Newman Regal & Kenney, said he has been getting a lot of calls from clients with questions.

“We are somewhat in uncharted territory,” he said.

The Trump administration has been reaching for new tariffs to replace the ones the Supreme Court struck down.

One question, he said, is how the government might actually pay for these refunds.

“Everyone is sort of cognizant of the fact that it’s not like there’s over a hundred billion dollars sitting in, you know, in a room somewhere to just cut checks,” Rao said. “So, you know, this is a Treasury problem, and it may very well be that the administration is reimposing tariffs for the reasons that it’s cited ... it’s important for strategic trade agreements and for bargaining power and all of that. But it also might be that they need to raise revenue to pay out refunds.”