By Reshma Kapadia, Sabrina Escobar, and Joe Light
A judge in the Court of International Trade on Wednesday ordered Customs and Border Protection to pay refunds for tariffs imposed under the International Emergency Economic Powers Act in a case brought by Atmus Filtration.
The ruling could speed refunds for the thousands of companies that have paid the Trump administration's IEEPA tariffs over the past year -- from large retailers like Costco Wholesale to logistics giant FedEx and the numerous small businesses that have been grappling with higher import costs.
The decision follows the Supreme Court ruling that struck down a swath of the tariffs the Trump administration imposed last year using IEEPA, kicking the refund question to the Court of International Trade, which has exclusive jurisdiction.
The administration has criticized that ruling even as it races to find other ways to impose tariffs on imports. It has argued that being forced to refund what it has already collected would be overly complicated.
Judge Richard Eaton, who issued Wednesday's ruling, indicated he would be the only judge who will hear cases relating to IEEPA refunds. His message is "hilariously simple," says Scott Lincicome, vice president of general economics at the Cato Institute: Refund all importers, and do it fast.
"The judge's order is a bit of a bomb," Lincicome said.
The order should trigger refunds on any IEEPA tariffs paid since late April, said Doug Jacobson, an international trade attorney for Jacobson Burton Kelley. According to estimates from the Penn Wharton Budget Model, the customs agency has collected about $175 billion under IEEPA tariffs that now need to be repaid, with interest, to importers.
"We are delighted by the Court of International Trade's swift, clear, and decisive ruling on tariff refunds today," says Rick Woldenberg, CEO of Learning Resources, which was at the heart of the Supreme Court case.
"This decision represents another important affirmation of the rule of law and provides clarity for businesses that have borne the financial burden of these unlawful tariffs," Woldenberg said.
When goods enter the U.S., importers pay an estimated duty upfront, and the customs agency typically has 314 days to finalize the amount in a process called liquidation. The judge's Wednesday order applies to those "unliquidated" tariff entries, Jacobson said, meaning that the order would capture the vast majority of the tariffs collected after President Donald Trump's decision last April to use IEEPA to place levies on imports from around the world.
Though there's some ambiguity about how broad the order is, Jacobson said he and others at his firm read it as ordering refunds even for the "liquidated" tariffs paid before late April.
The court's order also means the refunds should effectively be automatic for all importers without any need to bring an individual lawsuit, as Costco Wholesale, FedEx, Kawasaki, and Toyota Motor have done, Jacobson said.
More than 2,000 lawsuits are pending at the Court of International Trade, and would all get resolved through this order. That's a "victory for the little guy," Lincicome said, referring to importers that may not have had the resources to file a claim in court.
In a perfect world for importers, Customers and Border Protection would automatically issue the refunds for tariffs a company already paid out under IEEPA. Experts say customs has the resources and technology to do so, given that the agency has digitized most customs entries. In this scenario, importers could expect to be paid back in a matter of months.
It's likely, however, that the government will file something to "require a stay or extension on how to implement this order," said Ryan Majerus, partner at King & Spalding and former official at the U.S. Trade Representative's office.
Lincicome agrees, noting that the administration could still try to delay the process by either appealing the court's ruling or by having Customs and Border Protection conduct extra scrutiny of entries to slow things down.
The administration confirmed in a separate court filing on Wednesday that it would pay interest on the refunds. A Cato Institute report released earlier this week suggested the government could add $700 million in interest to the final repayment bill for each month that the government delays tariff refunds.
The White House didn't immediately respond to a request for comment on the ruling. Officials have said they plan to re-create the IEEPA tariffs, with the U.S. already imposing 10% global tariffs using Section 122 of the Trade Act of 1974, a different legal authority that can keep levies in place for 150 days.
A White House official on Tuesday told Barron's the administration was working on raising that rate to 15%. These tariffs are being described as a stopgap until the administration can impose levies through Section 301 investigations and other legal channels.
The continuing uncertainty over the repayment timeline means that investors should be careful about factoring in any potential refund windfalls into their financial projections. Companies themselves aren't entirely sure how the money will factor into their finances -- for instance, Abercrombie & Fitch said on Wednesday that its guidance for fiscal 2026 doesn't include any potential tariff recoveries.
Plus, some companies may not even keep the funds they receive from the fallout, opting instead to distribute them to consumers who paid surcharges. One of the goals there is to prevent class-action lawsuits from customers looking for their own tariff repayments, said Laura Siegel Rabinowitz, an international trade lawyer at Greenberg Traurig. FedEx was sued in federal court on Friday by customers looking for tax refunds. Siegel Rabinowitz believes Wednesday's order to speed up the refund issuance process might also accelerate other claims against importers.
Write to Reshma Kapadia at reshma.kapadia@barrons.com, Sabrina Escobar at sabrina.escobar@barrons.com, and Joe Light at joe.light@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 05, 2026 08:37 ET (13:37 GMT)
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