By Louise Radnofsky, Lydia Wheeler and Sarah Nassauer
Endless Pens is running out of pens. Owner Keval Kantaria is running out of options.
Bankruptcy is a real possibility, he said, if a refund doesn't come by July for the $175,000 in extra tariffs he paid on imported stock for his Tampa-based luxury online retailer over the past year.
"I've come to a cash flow crisis," he said. "I don't have enough cash to buy any new inventory."
The $166 billion the Trump administration collected from tariffs voided by the Supreme Court amounts to the largest illegal government levy in the nation's history. Now, almost exactly a year after President Trump declared "Liberation Day," companies of every size are wrestling with uncertainty about when, how -- and even if -- they will get refunds, a process made more complicated because the federal government isn't eager to return the ill-gotten gains.
Even in the best-case scenario, a refund program of such scale is going to be messy and slow. Some business owners can't hold on that long. Others are mounting a fight.
More than 3,000 lawsuits have been filed against the government in the Court of International Trade by companies hoping to maximize their chance of getting a refund quickly.
The cases started piling up after the Supreme Court heard arguments in November and signaled skepticism of Trump's position. The wave was boosted by Costco, one of the country's largest retailers, which filed a lawsuit that propelled some other nervous importers to join it even before the high court ruled.
In recent weeks, additional lawsuits have come in from CVS Pharmacy, Nintendo, Pandora Jewelry, Hasbro, Skechers USA and Nissan North America. Still, the vast majority of companies suing are tiny ones that need the money far more urgently. Like the challenge to the tariffs themselves, the refunds fight has been led by relatively obscure brands.
Harrison Gross's Miami-based Innovative Eyewear was among the earliest to sue, in a bid to recoup around $300,000 in levies paid on smartglasses. Money he could use to order products now to have in time for Christmas.
"It was very much a 'squeaky wheel gets the grease'" approach, said Gross. "I thought taking action was the right thing to do on behalf of the shareholders."
If his refund were to come immediately, Gross said, he could greenlight a $300,000 order for a new collection of glasses from China that he could sell during his busiest season. "Almost the exact amount of money that we're trying to reclaim is what I need right now for this production order," he said.
Otherwise, he's going to have to wait until the company's next funding round, because he wants to be careful with Innovative Eyewear's cash position, as it's publicly traded.
Endless Pens, which imports cult brands like Kilk in Turkey and Leonardo in Italy, is in a camp of smaller businesses that don't want to sue -- they can't afford it. Instead, the company is hoping lawsuits from other businesses will create a fair process where everyone can recoup their payments. And Kantaria is hoping he can just about cling on until then.
He borrowed $320,000 in high-interest loans from PayPal and Shopify after his bank recalled the line of credit for his business in the wake of the tariffs last year. To keep going, he recently laid off two of his four U.S.-based staff. Taking on even more debt is a bridge too far.
Under the circumstances, Kantaria said he is reluctant to pay a lawyer thousands of dollars and a percentage of any refund he gets. "I think I'd be throwing good money after money that might come or might not come, " he said.
Courts and confusion
Since April 2025, 330,000 importers paid tariffs -- on 53 million shipments -- that the Supreme Court found Trump had no authority to impose. The justices' 6-3 decision in February left it to lower court judges to oversee the refunds scramble.
Already, there's plenty of finger-pointing over why this is all so confusing and difficult.
Even when lower courts last year ruled against the tariffs, judges allowed them to remain in effect -- at the behest of the Trump administration, which argued the levies could be refunded if they were ultimately invalidated.
Within hours of the Supreme Court issuing its opinion, Trump blamed the justices for not dictating a refunds process, indicating it wasn't clear to him that the money even had to be returned. "Wouldn't you think they would have put one sentence in there, saying: 'keep the money,' or 'don't keep the money,' right?" he said. "I guess it has to get litigated for the next two years."
For now, all eyes are on litigation involving Nashville-based Atmus Filtration, which hit the legal jackpot when its case emerged as a standard-bearer for how the reimbursement process will be sorted out. Judge Richard Eaton, who said he's been designated by the Court of International Trade to decide all refund lawsuits, issued an order early this month that appeared to open the door for refunds to all importers, whether they filed a lawsuit or not.
Eaton directed the government to immediately start the refund process , saying there was nothing particularly novel about it. The Trump administration disagreed, saying the timeline was impossible to meet. The judge has given it more time, but the process for claiming refunds promises to be burdensome based on what the government has mapped out so far.
A U.S. Customs and Border Protection official recently told the trade court that companies will have to do their own accounting and upload a spreadsheet listing each wrongly tariffed good and the amount owed. Customs will then use an automated program to validate the claims. Companies must register online so refunds can be sent electronically once approved. As of March 6, less than 10% of eligible importers had done so.
Adding to the uncertainty, Trump has moved to impose new tariffs, which are also being challenged in court.
Richard Brown was so confused by the legal landscape that he fed two weeks' worth of refund-related court rulings into an AI program and asked it to create a podcast to explain it to him. His conclusion: "No one knows how to actually refund us."
He also built an AI tool to attempt to compile the tariff bill for his Cleveland, Ohio-based sneaker-care product company, Proof Culture.
Brown doesn't know what he paid in tariffs , and he's considering how much time he should spend going through a year-and-a-half of purchase orders to figure it out. But he's wary of getting distracted from other areas of his business.
Already over the past year Proof Culture has shifted some of its manufacturing outside of China, reduced its staff to just Brown, his father and one other employee and temporarily cut the number of products it imports from about 14 to two: a plastic sneaker crease protector insert and a shoe lace, both made in China.
"I'm at a place," he said, "where it's just like, how high does this go on my to-do list?"
Customers and costs
Without knowing what might happen, or how long they will have to wait, some companies have sold their refund claims to investors, or considered doing it, just to be able to move on.
Richard Kesselhaut considered selling the rights to his $227,000 claim early on, but investment firms were only offering 15 to 30 cents on the dollar. Offers have risen to upward of 70 cents, but he said that's still not enough.
For now, Kesselhaut is holding out for the full refund. Without one, it could take three years for International Coconut Corp. to become profitable again.
The company has scraped by, he said, because it had a decent cushion before the tariffs were imposed. It also got a reprieve in November, when Trump modified his executive order to exempt more than 100 food items from the tariffs -- including the desiccated coconut Kesselhaut imports from the Philippines.
But tariffs on the coconut ultimately added a little over $16,000 to every $85,000 container it purchased. With only $2 million to $4 million in annual sales, the New Jersey-based business hemorrhaged money.
When he tried to pass some of the cost on to his customers, many said "it's not my problem," Kesselhaut said. Some sent their invoices back with the tariff line item crossed out, along with a check for what was owed minus that amount.
By last August, he thought he was going to have to close International Coconut, which his father started almost 50 years ago.
Arthur Kesselhaut, now 95, still works a couple of days a week at the company, calling customers and ordering the sugar for its sweetened coconut product. When Richard told him about his fears, "I saw tears well up in his eyes."
Big companies likewise are conflicted about how to proceed. Most large importers -- Walmart and Home Depot among them -- haven't embraced Costco's assertive legal posture. They have already digested the cost of higher tariffs, and executives are wary of blowback from the Trump administration, so plan to wait and see if an obvious refund process emerges, said people familiar with their thinking.
They're also facing potential legal fights over what, if anything, they owe customers after their refund comes in.
FedEx and United Parcel Service have pledged to return tariffs they collected directly from their customers. Some aren't willing to take that on faith and have sued the companies in proposed class-action lawsuits to hold them to their promise.
Costco is facing a similar lawsuit, with the lead consumer plaintiff alleging the retailer will enjoy an undeserved windfall if it's not forced to hand over its refunds to customers, the "truly injured parties" after paying higher prices. Costco has said it didn't pass along all tariff costs to shoppers, only a portion, and it will use any refund to lower prices going forward.
Jim Foster, the owner of Global-Pak, an Ohio-based industrial packing distributor that sells bulk bags for shipping and storing dry powder products, spent about $7 million paying the now-voided tariffs. He was forced to start using a line of credit he hadn't been utilizing and ask the bank for an increase to cover the tariffs, which have to be paid when his product comes into port.
Foster passed on a portion of that cost in higher product prices, and since the Supreme Court ruling has been getting plenty of calls from customers asking when they will get a refund, and how much they'll get.
The packing products he supplies come from India, China, Vietnam and Bangladesh. One customer order could be subject to three different tariff rates depending on the products purchased -- and that payment now has to be recalculated, he said. He thinks he will have to pay employees overtime and add a temporary accountant to his staff of 48 to help sort through thousands of orders. He said the company will manage, but he's expecting it will cost an additional $10,000 to $20,000 to sort it all out.
"I don't even know legally if I can do this, but do I charge an administrative fee to do that?" he asked. "If we get interest on the money as well, are we expected to give that interest back to the customers?"
Foster thought he was voting for a more tax-friendly president when he three times cast his vote for Donald Trump. "I would have preferred to pay higher taxes than deal with tariffs," he said. "It would have been easier."
Write to Louise Radnofsky at louise.radnofsky@wsj.com, Lydia Wheeler at lydia.wheeler@wsj.com and Sarah Nassauer at Sarah.Nassauer@wsj.com
(END) Dow Jones Newswires
March 30, 2026 21:00 ET (01:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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