Trump administration seeks legal action to halt tariff refund process after issuing over $20 billion

(SeaPRwire) –   Just under two months after launching its digital platform for tariff refunds, the Trump administration is moving to halt the entire process.

On Friday, the administration announced its intention to challenge a federal judge’s ruling that granted all U.S. importers the right to request tariff refunds, rather than only those who had filed lawsuits. This follows a February Supreme Court decision that invalidated tariffs President Donald Trump had levied under the International Emergency Economic Powers Act (IEEPA), finding he had overstepped his authority.

In April, U.S. Customs and Border Protection (CBP) initiated the refund procedure, called the Consolidated Administration and Processing of Entries (CAPE), which established an online system for importers to claim a portion of the $166 billion in refunds available. A CBP court document dated May 26 indicates that CAPE has taken in $85 billion worth of potential and certified refunds for processing, with $20.6 billion forwarded to the U.S. Treasury Department for payout as of May 22. The filing did not specify the number of recipients for these funds.

In a court submission, the Department of Justice contended that Judge Richard K. Eaton overreached by mandating blanket refunds. It argued the government is prohibited from issuing refunds to importers whose entries have already undergone “liquidation,” meaning CBP has finalized the duties owed—unless that importer had sued to reclaim payments made under the illegal tariffs.

“CBP has no authority to reliquidate or refund money without a court order,” the Justice Department stated in the filing.

The Justice Department also opposed Judge Eaton’s requirement for CBP Commissioner Rodney Scott to testify before the U.S. Court of International Trade regarding the timeline for repaying all 330,000 U.S. importers who might qualify for refunds. Eaton rejected the department’s plea, stating that Scott’s testimony would shed light on whether the Trump administration intended to fully reimburse all revenue collected from the IEEPA tariffs.

Trump has consistently indicated he would resist the Supreme Court’s tariff decision, remarking soon after the ruling that litigating the refunds would take years. Subsequently, the White House has implemented a series of new tariffs under Section 301 of the Trade Act of 1974, which targets nations accused of unfair trade practices, and Section 122, which authorizes temporary import limits. Last month, the U.S. Court of International Trade determined that Section 122 tariffs were unlawful, and the U.S. Trade Representative is presently examining tariffs applied under Section 301.

The White House did not promptly reply to a request for comment from .

Why appeal the universal refund order?

Trade policy specialists anticipated the Trump administration would challenge the universal refund directive, having earlier expressed surprise that the Justice Department had not acted more quickly, considering tariffs are a fundamental element of the administration’s trade agenda.

“It’s genuinely surprising that the government hasn’t appealed the universal refund order already,” said Matthew Seligman, a federal constitutional law litigator and principal at Grayhawk Law, in an April interview with . “The government has opposed universal injunctions in every single context since President Trump retook office. If the government appealed the universal refund order, it would win.”

The Justice Department’s planned appeal aligns with the Trump administration’s history of legally contesting broad court orders. In June of last year, the administration fought nationwide injunctions that blocked an executive order restricting birthright citizenship, and the Supreme Court subsequently limited such injunctions, ruling they should apply only to the plaintiffs in the specific case.

According to Seligman, this approach is not unique to Trump’s administration but reflects a common legal stance of U.S. executive branches, which generally resist constraints on their authority.

“The executive branch always seeks to retain as much freedom of action and flexibility as it can, and so acquiescing to a universal injunction is extraordinarily difficult to imagine,” he stated.

Nevertheless, appealing the universal refund order may lead to legal disarray. Judge Eaton has previously indicated he would rule identically in all tariff refund cases, meaning if his blanket order were reversed, the court would likely grant refund eligibility to each importer individually, explained Lynlee Brown, an EY global trade partner, in April. This would transform an already streamlined process via CAPE into a laborious one.

Brown also noted that endangering the refund process could upset businesses before the midterm elections, given the unpopularity of Trump’s tariff policies.

“A lot of it is politics, right?” Brown said. “It’s a midterm election year. This would not be the favorable thing to do, to say, ‘Hey, we’re not going to give you your money back.’”