WASHINGTON, D.C.: A U.S. federal judge ruled March 4 that companies are entitled to refunds for tariffs imposed by President Donald Trump that were struck down by the Supreme Court last month, dealing a setback to the administration.

Judge Richard Eaton of the U.S. Court of International Trade said importers who paid the duties must benefit from the Supreme Court’s decision, which found that the tariffs were imposed unlawfully under emergency powers legislation.

“All importers of record” are “entitled to benefit” from the ruling, Eaton wrote, referring to the Supreme Court’s decision that invalidated sweeping tariffs Trump imposed last year under the International Emergency Economic Powers Act (IEEPA).

The Supreme Court ruled that the tariffs, including so-called “reciprocal” duties applied to nearly every trading partner, were unconstitutional under the emergency law. The justices said the president cannot unilaterally impose or alter tariffs because the power to tax belongs to Congress.

Eaton’s ruling addresses what happens next: how companies can reclaim the duties they paid. The Supreme Court’s February 20 decision invalidated the tariffs but did not detail the process for refunds.

In his decision, Eaton said he will oversee the cases related to the repayment of the duties. He wrote that he alone “will hear cases pertaining to the refund of IEEPA duties.”

Trade lawyer Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, said the government could still try to delay the process.

Majerus said he expects officials may appeal the decision or “seek a stay to buy more time for U.S. Customs to comply.”

The stakes are significant. The federal government collected more than US$130 billion in tariffs through mid-December, according to data cited by the Penn Wharton Budget Model. Analysts estimate total refunds could reach $175 billion.

Eaton issued the decision in a case brought by Atmus Filtration, a Nashville-based company that manufactures filtration products and sought reimbursement for the tariffs it paid.

Refund Process Begins

Goods imported into the United States pass through a process known as “liquidation,” during which U.S. Customs and Border Protection issues its final calculation of duties owed.

Once goods are liquidated, importers have 180 days to challenge the duties formally. After that deadline passes, the determination becomes legally final.

Eaton ordered Customs to stop collecting the invalidated tariffs on shipments currently in liquidation. If the goods have already moved past that stage, the agency must recalculate the duties without the now-void tariffs.

“This is a great decision for importers and consumers who paid,” said Barry Appleton, a law professor and co-director of New York Law School’s Center for International Law. “It will make customs brokers busy. It should make things easier for the courts and get a process underway for those importers who paid within the last 180 days.”

Earlier this week, another federal court rejected the Trump administration’s attempt to slow the refund process. The U.S. Court of Appeals for the Federal Circuit then remanded the matter to the New York trade court to determine how refunds should be processed.

Now, Customs must determine how to manage what could be one of the largest refund operations in the agency’s history.

Although the agency regularly refunds tariffs when errors occur, experts say its systems were not built for a large-scale reimbursement effort.

Customs’ framework was “not designed for a mass refund,” said Alexis Early, a partner at Bryan Cave Leighton Paisner who specializes in trade law. “The devil will be in the details of the administrative process,” she said.