A federal trade court has ordered the Trump administration to begin the process of refunding tariffs collected under a regime the U.S. Supreme Court struck down last month, marking a major step in what could become one of the largest government repayment efforts in modern trade history. In an order issued Wednesday, Senior Judge Richard Eaton of the U.S. Court of International Trade directed U.S. Customs and Border Protection (“CBP”) to begin processing tariff entries without including levies invalidated by the Supreme Court’s February decision.
The order stems from a refund claim brought by filtration manufacturer Atmus Filtration. Eaton also indicated that the court’s chief judge has assigned him to oversee cases involving refunds of tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). The ruling advances efforts by companies across industries – including fashion, beauty, and consumer goods more broadly – to recover money paid under the tariff program the Supreme Court invalidated.
A Massive Refund Effort Begins
Judge Eaton’s order requires CBP to move forward with the technical process known as “liquidation,” which finalizes tariff entries for imported goods. Under the ruling, entries that have not yet been liquidated must be finalized without including the invalidated tariffs, while entries that have already been finalized must be re-liquidated. Although companies are unlikely to receive payments immediately, the order marks a significant milestone in the effort to return funds collected under the program.
CBP data shows that roughly $134 billion in duties had been collected under the IEEPA tariffs through the end of 2025, and trade experts estimate the total refund exposure could approach $175 billion once all claims are resolved.
The judge rejected a request from Justice Department lawyers to pause the order while the administration prepares an appeal and scheduled a follow-up proceeding for Friday to receive updates on the government’s progress.
A Wave of Lawsuits
The refund fight follows the Supreme Court’s closely watched 6–3 ruling on February 20 holding that the president lacks authority under IEEPA to impose sweeping tariffs on trading partners. The administration had argued that the 1977 statute – typically used to impose economic sanctions and regulate international economic transactions during national emergencies – gave the president authority to impose tariffs as part of emergency economic measures. The Court rejected that interpretation, holding that IEEPA does not authorize tariffs.
While the decision invalidated tariffs imposed through several 2025 executive orders issued under IEEPA, it did not directly address how businesses should recover duties already paid. That question is now being addressed by the Court of International Trade. Earlier this week, the U.S. Court of Appeals for the Federal Circuit declined to delay implementation of the Supreme Court’s ruling, clearing the way for the trade court to begin addressing the mechanics of refunds.
The ruling comes amid a surge of litigation filed by companies seeking to preserve their ability to recover tariffs paid under the program. Roughly 2,000 lawsuits have been filed in the Court of International Trade, including claims from major corporations such as FedEx, Costco Wholesale, Dyson, and L’Oréal.
Fashion and beauty companies are also among the plaintiffs challenging the tariffs. As previously reported by TFL, companies including Ferragamo USA and e.l.f. Cosmetics filed lawsuits earlier this year arguing that IEEPA does not authorize tariffs and seeking refunds of duties already paid.
Those cases highlight a key procedural concern for importers: under customs law, once CBP finalizes – or “liquidates” – an entry, the window to challenge duties can close. Many companies filed lawsuits preemptively to preserve their ability to seek refunds if the tariffs were ultimately struck down.
Administrative Challenges Ahead
Even with the court’s directive, the path to refunds may prove complex. CBP routinely processes tariff refunds in cases involving clerical errors or overpayments, but its systems were not designed for a mass repayment effort involving millions of import entries. Agency officials have indicated that even after entries are finalized without the tariffs, CBP must still review transactions to ensure that no other duties, taxes, or compliance issues remain outstanding.
Meanwhile, businesses are pushing for speed. Advocacy groups representing importers say companies – particularly small and midsize firms – have been carrying the financial burden of the tariffs for months.
The Trump administration is widely expected to appeal Judge Eaton’s order. Government lawyers have argued that processing refunds will take time given the scale of the effort and the administrative steps required by CBP. If the order ultimately stands, however, the federal government could face extraordinarily large repayment obligations that could reverberate across industries that rely heavily on global supply chains, including fashion, footwear, cosmetics, and luxury goods.
THE BOTTOM LINE: A federal trade court has ordered the government to begin processing refunds for tariffs that the Supreme Court ruled were unlawfully imposed under emergency powers. The move could unlock billions in repayments for import-reliant industries, including fashion and beauty, which are now racing to recover duties they say were improperly collected.
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