Federal Judge Orders Trump Admin to Refund Billions of Dollars to Businesses That Paid Illegal Tariffs

US customs officials are due to report to the Court of International Trade in New York on Friday to detail their plans for issuing billions of dollars in refunds to American businesses that paid tariffs which were struck down by the US Supreme Court last month.

On Wednesday, Judge Richard Eaton at the federal trade court ruled that "all importers of record" are "entitled to benefit" from the Supreme Court ruling that found President Donald Trump had illegally invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose tariffs on more than 300,000 US businesses that import goods, the vast majority of which were small businesses, as a central policy of his economic agenda.

The Supreme Court found Trump could not use the IEEPA to unilaterally set tariffs.

Eaton ruled in a case brought by Atmus Filtration, a company based in Nashville, Tennessee, which filed one of about 2,000 lawsuits at the trade court seeking refunds for the tariffs.

US Customs and Border Protection is likely to appeal the decision or “seek a stay to buy more time," former US trade official Ryan Majerus told NBC News, but Eaton did not appear convinced Wednesday when a Justice Department lawyer Claudia Burke, said in court that issuing refunds en masse would be time-consuming for the CBP and would necessitate the manual review of millions of entries.

"We live in the age of computers," said Eaton. "It must be possible for Customs Service to program its computers so it doesn't need a manual review.

Burke also told Eaton that the administration hadn't determined its position on refunding the tariffs, to which the judge replied: "Your position is clear. The Supreme Court told you what your position is."

Eaton noted that refunds are processed every day by CBP through a process called "liquidation" when goods are imported through the agency. CBP issues an accounting of what is owed by the importer, and the company has 180 days to formally contest its duties. The judge ordered customs officials to stop collecting tariffs on goods currently in the liquidation process and to recalculate duties for goods that were past the 180-day window, without the illegally imposed tariffs, resulting in a refund.

“Customs knows how to do this,” said Eaton. "They do it every day. They liquidate entries and make refunds."

Atmus Filtration estimated in court filings it had paid $11 million in illegal tariffs. The federal government collected $130 billion in tariffs under the IEEPA last year, and according to the Penn Wharton Budget Model, could ultimately owe $175 billion in refunds to businesses.

Sen. Mark Warner (D-Va.) said the Trump administration "must move quickly to reimburse the thousands of small businesses in Virginia and across the country that bore the brunt of President Trump’s harmful and illegal tariffs."

Dan Anthony, executive director of the We Pay the Tariffs coalition, called the ruling a "victory for small businesses who have paid billions in unlawful tariffs and deserve their money back."

"The court acted swiftly and correctly," said Anthony. "Now the ball is in the government's court and small businesses are concerned they will drag this out further. American small businesses have waited long enough. A full, fast, and automatic refund process is what these businesses are owed and anything less is unacceptable."