The US customs agency is preparing a system that will be ready to process refunds of billions of dollars of illegally collected tariffs within 45 days without the need for importers to file lawsuits, a court was told.
Brandon Lord, a senior U.S. Customs and Border Protection (CBP) official, said in a filing with the U.S. international trade court on Friday that the total amount held in connection with such tariffs was estimated at “approximately $166 billion.”
The statement came as government lawyers met with a federal trade judge to negotiate a process to return money to some 330,000 importers.
The international trade court’s website said the meeting would be a “closed conference”, while Gina Justice, its secretary, described it as a “settlement conference”.
The Supreme Court decided last month that a 1977 law designed to address national emergencies did not provide legal justification for most of the Trump administration’s global tariffs.
On Wednesday, Judge Richard Eaton of the International Trade Court told CBP that it must begin reimbursing importers using its existing systems – with interest – in an order that covers all affected importers, not just those who had taken their cases to court.
The Supreme Court struck down Donald Trump’s “liberation day” tariffs on February 20, ruling that he had exceeded his authority by issuing them last year. The decision did not provide details on how importers would get their money back, leading to a series of lawsuits.
“Customs knows how to do this,” Eaton said at a court hearing Wednesday. He said the agency should be able to simply issue refunds in its system, which are given periodically when importers are found to have initially overpaid.
When goods enter the U.S., an importer pays an estimated amount that is finally finalized a little more than 10 months later, in a process called liquidation. Eaton has said CBP should end the cost of entry for shipments without the tariff, effectively issuing refunds.
“They do it every day. They settle tickets and make refunds,” he said.
Eaton’s order came in a case brought by manufacturer Atmus Filtration, which said in court papers it had paid around $11m (£8m) in illegal fees.
Atmus attorneys are expected to be able to attend Friday’s meeting remotely, according to court documents. It potentially points to the Atmus case as the vehicle that decides how to grant fare refunds more broadly, in up to 2,000 other cases filed so far.
“I don’t think any of this has to be chaotic for anyone, because I know you’re going to try to find a way to do it,” Eaton said Wednesday.
Lord said in his presentation on Friday that more than 330,000 importers have made a total of more than 53 million entries “on which they have deposited or paid duties imposed under the International Emergency Economic Powers Act.” He said the new refund process “will require minimal filing by importers.”
Separately, a group of Democratic attorneys general and governors from 24 U.S. states said Thursday they would sue Trump over his most recent round of tariffs. In the wake of the Supreme Court decision, the White House said it would introduce a new 15% charge on all imports under a different law.
The lawsuit, led by Letitia James, the attorney general of New York, argues that the US president does not have the authority to impose the new tariffs and demands that states be reimbursed for the additional costs.
“Once again, President Trump is ignoring the law and the Constitution to effectively raise taxes on consumers and small businesses,” James said.
Reuters contributed to this report.
