A cornerstone of the second Trump administration's economic policy agenda suffered a defeat when the U.S. Supreme Court held that Congress did not authorize President Trump to impose tariffs unilaterally under the International Emergency Economic Powers Act (IEEPA).
The ruling left undecided what would happen to the tariffs that businesses have been paying. That question has now largely been resolved, although more legal developments are expected, and the situation remains complicated.
The Quick Technical Summary
On March 4, 2026, Judge Richard Eaton of the U.S. Court of International Trade (CIT) ordered the U.S. government to remove IEEPA tariff duties from future entries and to refund duties on unliquidated and not-finally-liquidated entries to all affected importers of record.
In plain English, that means Customs and Border Protection (CBP) must stop adding the now‑invalid IEEPA tariffs when it finalizes new import entries and must go back and fix entries that are still “open” in its system. This includes importers who never sued the administration, which was a major open question. However, while the order requires CBP to remove IEEPA duties from unliquidated and not‑finally‑liquidated entries, it does not yet provide a clear automatic refund path for entries whose liquidation is already final.
If you’re left a bit confused, that’s understandable. The bottom line for importers is that if the protest period for the tariffs you paid has passed, a call to a lawyer is a good idea. If it hasn’t, you should be eligible for an automatic refund … but a call to your lawyer probably wouldn’t hurt.
We Did Say It Was Complicated
With over $130 billion in collections by CBP from an estimated 300,000 importers, implementing a refund process may prove daunting. Nonetheless, Judge Richard Eaton, who will remain the only CIT judge to hear cases related to this ruling, indicated that the existing CBP liquidation process should prove up to the task.
This decision does not mean that businesses will no longer need to pay tariffs, even as they receive refunds on tariffs they’ve already paid. That is because President Trump invoked Section 122 of the Trade Act of 1974 to reissue unilateral tariffs in the wake of February’s Learning Resources Inc. v. Trump ruling. Unsurprisingly, the Trump administration was again hit with a lawsuit in the CIT challenging the viability of his use of Section 122. Attorneys general from 23 states filed the legal challenge to the latest round of tariffs.
Taking a Step Back
While President Trump was involved with tariffs during his first term, he made it clear they would be the centerpiece of his fiscal agenda in his second administration. Claiming that IEEPA gave him the authority, President Trump issued executive orders imposing and altering import tariffs. The rates were in constant flux, often reflecting his disposition toward a particular nation at the time. For example, the rates on goods imported from Canada and Mexico rose and fell in seeming accordance with how relations were with their leaders at any given moment.
The tariffs generated under IEEPA were taxes imposed on importers in the United States. While import tariffs are nothing new, the often hefty rate increases made it challenging for many businesses to pay what they owed to receive their goods.
The two-step process for imported materials begins with importers paying an estimated amount to CBP for what they’ll owe at entry. It concludes with CBP conducting liquidation, which assesses if the importer is due a refund within about 314 days. The inflated rates and uncertainty around import tariffs in 2025 forced businesses to either absorb the increased costs or pass them along to their customers. Reluctance to opt for the latter sometimes left smaller businesses open to scammers and grifters, as they struggled to raise the funds to have their items released.
Any Chance You’d Accept Store Credit?
Atmus Filtration, which claimed it paid $11 million in IEEPA global tariffs, was the plaintiff in the case decided by the CIT. CBP requested four months to develop a plan to facilitate $130 billion in returns, but Judge Eaton suggested that the agency was already well-versed in the liquidation process. The ruling indicated that the refunds were expected to include interest on the wrongly collected tariffs, which makes the CBP’s task even more difficult.
As if that weren’t enough of a task, Judge Eaton also ordered CBP to finalize what the cost of bringing millions of shipments into the U.S. would have been if the tariffs hadn’t been assessed. While figuring out the liquidated entries is time-consuming, the expected appeal by the federal government may temporarily shelve the process. That’s not welcome news for importers struggling to stay afloat in the meantime.
The pending battle over President Trump’s pivot to Section 122 for his tariffs ought to be legally fascinating, as well. In defending President Trump’s IEEPA tariffs last year, the Department of Justice (DOJ) argued that Section 122 wasn’t an option because it “doesn’t have any obvious application” in affecting the trade deficit. However, Section 122 may provide President Trump with the legal support he needs to continue with his tariff campaign.
For small businesses impacted by tariffs, the promise of impending refunds is welcome news, even if any relief is unlikely to be a smooth process.
Related Resources
- Justice Department Promises Increased Enforcement of Tariff Collections (FindLaw’s Law and Daily Life)
- Costco Sues Trump Administration To Preserve Right to Full Refunds on Tariffs (FindLaw’s Courtside)
- Understanding Proposed Tariffs From a Small Business Perspective (FindLaw’s Law and Daily Life)
