US trade court orders customs to refund $130bn of illegal tariff

Judge Richard Eaton of the US Court of International Trade has ordered the government to pay a refund on the illegal tariff collected by the nation, along with interest. The U.S. government collected more than $130 billion in illegal tariff payments, which were central to Trump's trade policy. There have been roughly 2,000 lawsuits filed with the trade court seeking a refund of the tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

"They do it every day. ​They liquidate entries and make refunds," said Judge Richard Eaton on Wednesday. When merchandise is usually brought into the US, the importer has to pay an estimated amount at the entry, which is then finalised around 314 days later, known as the liquidation process, resulting in a refund. The court also asked Customs and Border Protection about its refund plans. CBP claims that it has to review at least 70 million entries to finalise the entry cost, without considering a tariff and would be an unprecedented task. The agency sought 4 months to assess its option for paying refunds.

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"The ‌language in ⁠this order strongly suggests an across-the-board approach that importers are entitled to IEEPA refunds, full stop," said Ryan Majerus, a former senior Commerce official who is now a partner with King & Spalding.

He added, “The government may challenge the order’s scope or, at a minimum, ask for more time to enable U.S. Customs to undertake what will undoubtedly be a monumental task here.”

More than 300,000 importers have paid tariffs. Most of them are Small and Medium businesses. They are seeking a simplistic way to get the reimbursements, and most of them are not planning to forego the refund if they have to sue or go through a complicated process. ​The Supreme Court did not provide ​guidance for issuing refunds, creating confusion ⁠over how importers would be reimbursed.