Tariff Refund Update

My Cato Institute colleagues Scott Lincicome, Alfredo Carrillo Obregon, and Chad Smitson have a helpful post updating the situation on refunds for Trump’s illegally imposed IEEPA tariffs. In February, the IEEPA tariffs were invalidated by the Supreme Court, in a case I helped bring and litigate (along with the Liberty Justice Center, and others). But before that happened, the Trump administration collected some $166 billion in illegally collected tariffs. As Lincicome, Obregon, and Smitson  (LOS) explain, there has been important progress getting refunds for the importers who were illegally forced to pay, but serious problems remain:

Here’s where things stand.

On February 20, 2026, the Supreme Court invalidated the tariffs that President Trump implemented last year under the International Emergency Economic Powers Act (IEEPA). As of June 29 (more than four months after the ruling), CBP has authorized $104.29 billion in refunds and paid out $71.06 billion (including interest). Based on our calculations of the total amount owed by the government as of June 29 (taking into account interest and payouts), the government still owes importers about $100.65 billion—more than half of the total owed…

CBP deserves credit for giving most eligible importers the opportunity to receive refunds—even if the process was not automatic. It’s also good that CBP has now rolled out Phase 2 of its refund (CAPE) system, covering entriesflagged for reconciliation. Refunds could eventually climb to $130 billion of the $166 billion in IEEPA duties paid by importers (before interest).

Eventually.

Indeed, that only $71.06 billion of the approved $104.29 billion has actually been paid suggests that frictions built into the CAPE process are creating obstacles for importers seeking refunds. For example, CBP claims that refunds for 8,384 approved declarations have not been issued because the eligible importers lack proper automated clearinghouse or banking information.

Some of the slowness here is likely due to ordinary bureaucratic inefficiency. The federal government has never had to issue tariff refunds on such an enormous scale before. But some is also due to the Trump administration’s efforts to try to keep some of the illegally collected loot. AS LOS note, the administration has appealed the injunction issued by Judge Eaton of the US Court of International Trade ordering payment of refunds to all importers who were forced to pay the illegal tariffs. At least when it comes to “finally liquidated” tariff entries, the administration claims they only have to pay refunds to those businesses that filed individual lawsuits seeking them.

In previous posts about the refund issue (see here and here), I explained why Judge Eaton was right to issue a universal injunction, even in the aftermath of the Supreme Court’s ill-advised strictures against such injunctions in Trump v. CASA, Inc. (decided last year). Among other things, Trump v. CASA only applies to cases brought under the Judiciary Act of 1789 and its successors. The CIT’s jurisdiction comes from a separate statute enacted in 1980.

As LOS also note, the refund process may be stacked against smaller importers, often making it difficult or impossible for them to get what they are owed.

Overall,  it’s good that many victims of the illegal tariffs are getting refunds. But it’s a travesty that almost 60% of the money still hasn’t been repaid almost five months after the Supreme Court decision. Meanwhile, interest accrues on those illegal tariffs that haven’t been repaid yet, and taxpayers will be on the hook for that additional money.

LOS go on to point out that my former colleagues on the IEEPA case, the Liberty Justice Center and Georgetown law Prof. Neal Katyal (who argued our case before the Supreme Court), have filed a class certification motion to create a class action seeking refunds for all those importers who paid IEEPA tariffs but are not currently eligible to get refunds under the system set up by the CBP.

I am not a class action expert. But I think such a class certification makes good sense. The proposed class seems to clearly meet the requirements of Rule 23 of the Federal Rules of Civil Procedure, which include, 1) “numerosity” (the class is large enough to make joinder of all individual plaintiffs impracticable, 2) “commonality” (common questions of law and fact), 3) typicality (the claims of the class representatives litigating the case are typical of the class as a whole), and 4) “adequacy” (the representatives can adequately defend the interests of the class in court).

It is obvious the class is large enough, as it includes many thousands of businesses who paid the tariffs but cannot currently get refunds. The potential class members also have common  legal issues (they all were forced to pay the tariffs, but cannot currently get refunds for similar reasons). The claims of those of my former clients who cannot get refunds are typical of others in the same situation. And, though I may be biased in favor of my former co-counsel, more objective observers cannot deny they are capable of litigating the issues more than adequately! LJC successfully litigated the IEEPA case from start to finish, and Neal Katyal is one of the nation’s leading appellate litigators. But the government is opposing the class action certification, and we will have to see what appellate courts decide.

I’ve said it before and I will say it again here: the administration’s recalcitrance in paying and the various bureaucratic difficulties in getting refunds even to those the administration admits should get them, are a reason why courts should not stay injunctions against illegal tariffs while litigation continues. That’s what happened in our IEEPA case, and is how we ended up with over $166 billion in illegally collected tariffs (an amount that has since grown, given accumulated interest). In addition, even full repayment of illegally collected tariffs cannot make up for all the harm they caused, as there is no compensation for higher prices paid by consumers, lost sales caused by price increases, and a number of other harms to  importers, consumers, and the US economy as a whole. Sadly, the US Court of Appeals for the DC Circuit  failed to learn these lessons when it comes to the current litigation over Trump’s illegal Section 122 tariffs.

Thus, the tariff refund saga seems likely to continue, perhaps for many months to come. I tentatively expect that a large majority of the illegally collected tariffs will eventually be repaid, with interest. But some of the harm they caused cannot and will not ever be addressed.

NOTE: As I have previously noted, I am no longer a member of the V.O.S. Selections legal team, because my role ended after the Supreme Court issued its decision. Thus, I am not involved in the refund phase of this litigation.