Tariff Confusion: Court Signals Refunds As States Sue Over New Duties
A ruling by a US court this month may have opened the door to potential tariff refunds, while 22 states have now launched a legal challenge against recently imposed duties.
Since the US Supreme Court struck down tariffs introduced by Donald Trump under the International Emergency Economic Powers Act (IEEPA), the situation appears to have descended into legal and administrative confusion.
Last week, the US Court of International Trade ordered US Customs and Border Protection (CBP) to issue refunds following a case brought by a filtration company based in Tennessee. Although the ruling formally applies only to the plaintiff, the judge stated that “all importers of record whose entries were subject to IEEPA duties are entitled to the benefit.”
In response, CBP said it is currently unable to comply with the order but could potentially begin issuing refunds within 45 days if it upgrades its technology systems. The agency added that around 330,000 importers and 53 million entries had paid tariffs under IEEPA.
The Trump administration has not fully accepted that refunds will be issued, and government lawyers have indicated they may challenge the order. Trump previously warned that any refund process would likely be lengthy and heavily contested, potentially dragging on for years.
Meanwhile, 22 US states have initiated legal proceedings against the Trump administration in an attempt to block a new 10% tariff introduced under Section 122 of the Trade Act of 1974.
Trump imposed the 10% rate immediately after the Supreme Court struck down the IEEPA tariffs, relying on an alternative provision that allows temporary tariffs for up to 150 days before Congress becomes involved. US Treasury Secretary Scott Bessent said last week that the rate is “likely” to rise to 15% soon, which is the maximum allowed under the rule.
However, the states — all led by Democrats — argue that the use of Section 122 is also unlawful, claiming the provision was not intended to address trade imbalances. The White House maintains that its use of the law is legitimate and says it will “vigorously” defend the tariffs in court.
The legal battles are ongoing.
