Federal court rejects Trump administration attempt to slow tariff refund process

Federal court rejects Trump administration attempt to slow tariff refund process

In a recent decision, a federal court in Washington dismissed the Trump administration’s effort to delay the refund process for tariffs deemed unlawful by the Supreme Court in February. The ruling came as the administration sought to extend the timeline for returning billions in collected funds.

The U.S. Court of Appeals for the Federal Circuit initiated the next stage of the refund process by forwarding it to a lower court for further evaluation. On Friday, the Justice Department submitted a request to the Federal Circuit to slow proceedings for 90 days, but the judges rejected this proposal.

On February 20, the Supreme Court declared Trump’s broad tariffs on numerous global nations as unlawful, allowing importers who had paid them to pursue refunds. By mid-December, the government had amassed over $130 billion in tariffs, with potential refund liabilities reaching up to $175 billion, as estimated by the Penn Wharton Budget Model.

However, the Supreme Court provided no specific instructions regarding refunds, omitting any reference to them in its ruling. The U.S. Court of International Trade in New York will now determine the next steps in this intricate refund process.

“I would expect the Court of International Trade to quickly issue an order requesting a status update from the government on their plans with respect to refunds (or expedited briefing),” said trade lawyer Ryan Majerus, a partner at King & Spalding and a former U.S. trade official.

“We are somewhat in uncharted territory,” he said. “The Trump administration has been reaching for new tariffs to replace the ones the Supreme Court struck down. One question, he said, is how the government might actually pay for these refunds. ‘Everyone is sort of cognizant of the fact that it’s not like there’s over a hundred billion dollars sitting in, you know, in a room somewhere to just cut checks,’ Rao said. ‘So, you know, this is a Treasury problem, and it may very well be that the administration is reimposing tariffs for the reasons that it’s cited … it’s important for strategic trade agreements and for bargaining power and all of that. But it also might be that they need to raise revenue to pay out refunds.'”

The Associated Press