$175 billion US tariff refund uncertainty after Supreme Court ruling on Trump duties

The recent US Supreme Court ruling declaring tariffs imposed by the Trump administration unlawful has triggered widespread uncertainty among businesses over how refunds will be handled. The court did not specify a clear mechanism for returning an estimated $175 billion collected under the tariffs, leaving importers facing a potentially complex and costly process to reclaim payments. For many companies — particularly small businesses — the prospect of navigating legal and administrative hurdles has raised concerns about delays and procedural scrutiny.

Uncertainty over refunds

With no defined roadmap from the court on how repayments will be processed, importers are left waiting for clarity. The absence of a structured refund framework has created ambiguity around timelines, documentation requirements, and eligibility.

Who gets the money?

Trade experts note that the government has maintained tariff payment records and upgraded its recordkeeping systems, which should help determine refund amounts. However, legal questions remain over who ultimately receives the repayment. In many cases, the importer of record or the entity that paid the tariff may be entitled to the refund, depending on contractual arrangements. This could trigger disputes between companies and further extend resolution timelines.

Automatic repayments

Small business owners have urged the government to process automatic repayments, warning that a manual or litigation-driven system would disproportionately harm smaller firms. Trade groups have cautioned that if authorities conduct detailed reviews of entry paperwork, the process could stretch on for years.

Key legal hurdle

The Supreme Court clarified that it has the authority to reopen final tariff determinations and order refunds with interest. The Trump administration has said it will not contest that authority. Legal experts view this as removing a major barrier to repayment. However, while the legal path may now be clearer, the logistics of distributing refunds on such a large scale remain unresolved.

Individual lawsuits

Under current US trade law, importers may need to file individual lawsuits in the US Court of International Trade to secure refunds. There is uncertainty over whether a class action mechanism can be formed to cover the many affected companies. Importers generally have two years to file claims.

The requirement to pursue individual legal action could impose a heavy burden on smaller firms that lack the resources to fund litigation. Some businesses may forgo refunds rather than incur substantial legal costs. In parallel, a secondary market has emerged, with some companies selling anticipated refund claims to Wall Street investors in exchange for immediate liquidity — often at a discount.

How the refund process works

Refunding tariffs is complicated by customs procedures. Typically, importers post a bond with Customs and Border Protection and pay estimated tariffs at the time of entry. A final determination, known as liquidation, usually occurs 314 days after entry. If excess duties were paid, refunds are issued; if duties were underpaid, additional amounts must be covered by the importer. The case now returns to the Court of International Trade to determine the specifics of refund distribution.

Wave of litigation expected

The scale of the issue has drawn commentary from both legal experts and the judiciary. Justice Brett Kavanaugh described the consequences as likely to be “a mess,” while former President Trump acknowledged that the matter could remain in court for years. More than 1,000 lawsuits from importers are already pending before the trade court, and a significant rise in new filings is widely anticipated.

While the court has cleared the legal pathway for repayment, the practical challenge of refunding billions of dollars in contested tariffs may result in prolonged litigation and continued uncertainty for businesses across sectors.

(With Reuters inputs)