The Trump administration’s stance on rolling back all tariffs, which the Supreme Court has declared illegal, has been slow to take shape. But a new court filing last week appears to acknowledge that a wide range of duties will eventually qualify for refunds.
At issue is the difference between liquidated and unliquidated tariffs.
This legal distinction is significant for importers and can cost companies millions of dollars when they seek to recover duties illegally collected under the International Emergency Economic Powers Act of 1977 (IEEPA).
The government’s filing this past week also described continued progress in a four-step process that, once started, can take about 45 days to review and process applications.
Read more: What Trump’s tariffs mean for the economy and your wallet
President Trump speaks at a press conference at the White House in February to discuss the Supreme Court ruling against his tariffs. (Mandel NGAN/AFP via Getty Images) ·MANDEL NGAN via Getty Images
“In principle, this development provides the answer many importers have been looking for,” Greg Hussian of the firm Foley & Lardner told Yahoo Finance. He said the administration’s revised order “effectively places the entire population of IEEPA entries within the court’s withdrawal framework.”
Put another way, this means that previously paid fees that are currently in three different states – unliquidated, liquidated but still within a protest window, and those where liquidation is considered final – may eventually qualify for a refund.
In a business context, “liquidation” refers to the final calculation of dues and is often seen as a final stamp of sorts. This process must be completed within one year of the goods being imported and is charged first, but it usually happens quickly, in the range of 10 to 11 months.
The liquidation case led to preemptive lawsuits from the companies until 2025, before the Supreme Court confirmed in February that tariff refunds would be possible when Trump lifted the blanket IEEPA tariffs.
This week’s filing was the latest concession from the Trump administration, cheering trade lawyers who have been bracing for a messy withdrawal process on multiple fronts.
This has led to a growing feeling that a wide range of refunds, including fully liquidated tariffs, is possible.
“If the government was going to fight that case, I would have expected them to do a lot more in this filing,” Eric Smithways, a partner who focuses on commercial litigation at GDLSK’s firm, said in an interview.
He represents clients seeking refunds and said he was relieved by the latest language — but he cautioned that it “doesn’t stop the Justice Department from one day saying we’re not going to build this process, we don’t think it’s legally authorized” and force the case to go to trial.
Shortly after the Supreme Court’s February decision, President Trump told reporters that he believed the recall case would need to be litigated “for the next two years,” but he had not publicly weighed in on the recall question in recent weeks.
A cargo ship is seen at the Port Jersey Container Terminal in Jersey City, New Jersey in January. (Charlie Triballio/AFP via Getty Images) ·Charlie Tribalio via Getty Images
This week’s government filing was written by Brandon Lord, executive director of trade programs at U.S. Customs and Border Protection. Companies have said that the first iteration of the portal coming up for applying for refunds will be able to handle around 63% of all entries.
Guidance for the remainder, which includes fees where liquidation is deemed final and is described as “more complex return scenarios”, is promised to be forthcoming.
The filing also noted that the four elements for “Phase 1” of the refund portal — a claim phase, a processing phase, a review of refund claims, and a final payment phase — are between 60% and 85% complete.
In a follow-up this week, the presiding judge overseeing the case described the government as “on track” to meet the April 20 deadline to start accepting return applications.
“Customs continues to make satisfactory progress,” said Senior Judge Richard K. Eaton asked for a further update on April 14.
The United States Court of International Trade in Lower Manhattan is seen in May 2025. (Spencer Platt/Getty Images) ·Spencer Plate via Getty Images
A warning to clients from the firm Snell & Wilmer struck an optimistic tone, noting that the clear inclusion of liquidated entries “will not cause time-barring for importers to recover IEEPA tariff refunds for imports that have reached final liquidation.”
‘Uncertainty Remains’
The developments come as consumers also look to Angle for a direct slice of potential returns.
The government estimates the refunds could total $166 billion, and at least 17 lawsuits have reportedly been filed against companies including FedEx ( FDX ), Costco ( COST ), and UPS ( UPS ), which consumers say the companies would be wrong to keep any money they get back.
A Costco Wholesale sign is seen in March in San Diego, CA. (Kevin Carter/Getty Images) ·Kevin Carter via Getty Images
But many questions remain unanswered.
In his note this past week, Hussian noted that it was unclear how the process would roll out nationwide and other issues, such as whether it would matter if the company filed for default.
There is also an opportunity for other courts to intervene on questions such as whether it is necessary to withdraw administrative objections from companies.
“Look, there’s still some uncertainty down the road,” Smithways said. He still recommends that companies consider several steps — administrative protests and even litigation — “just to be sure.”
Ben Verskull is the Washington correspondent for Yahoo Finance.
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