US starts tariff refunds after Supreme Court strikes down Trump trade measures

Washington: The United States has started processing tariff refunds worth more than $166 billion after the US Supreme Court struck down a major part of President Donald Trump’s trade policy, setting off a rush by importers seeking repayment of duties collected under the measures.

According to The New York Times, US Customs and Border Protection launched the refund process this week, allowing companies to seek reimbursement for tariffs imposed under emergency powers that the court found had been used improperly. Officials estimate that more than 330,000 importers paid the tariffs on tens of millions of shipments, making the exercise one of the largest reimbursements to businesses in recent US history.

The dispute centres on Trump’s use of the International Emergency Economic Powers Act, or IEEPA, a 1977 law that had not previously been used to impose broad tariffs. In February, the Supreme Court invalidated those tariffs, ruling that the administration had gone beyond its authority. The decision removed a central tool of Trump’s trade approach, which had covered imports from a wide range of countries.

The Hill reported that demand rose sharply within hours of the system becoming operational as companies moved quickly to submit claims. Even before the formal launch, more than 3,000 businesses, including FedEx and Costco, had already begun legal action to secure refunds.

For importers, the tariffs had added substantial costs, forcing companies to absorb the expense, transfer it to consumers, or reduce spending elsewhere. Under the refund programme, however, only the official importers who paid the duties can receive repayments. That means consumers who ultimately faced higher prices are not eligible for direct reimbursement.

Economists say any benefit for households will depend on whether companies choose to pass on the gains. FedEx, which often serves as the importer of record while charging customers for duties, has said it plans to return funds where applicable. Costco has indicated it may pass on benefits through lower prices, although it is also facing legal pressure from consumers seeking direct payouts.

Concerns over access and delays

Fortune reported that smaller businesses may face greater difficulty navigating the refund process. Many lack the legal and administrative resources needed to deal with what has been described as a complicated and unclear system. Industry groups have warned that the documentation requirements and the possibility of months-long processing could favour larger companies with dedicated compliance teams.

One trade analyst familiar with the process said, “There’s a real concern that smaller players will be crowded out or delayed.” The analyst added, “Big firms have already lawyered up and filed early claims. Smaller businesses are still trying to figure out how the system works.”

US authorities have also had to create a new digital platform to handle claims at scale while separating legal and illegal tariffs, which were in some cases applied to the same shipments. Officials had earlier said the system currently covers only about two-thirds of affected import entries and would be expanded in stages.

Processing is expected to take 60 to 90 days after claims are accepted, although experts have cautioned that delays and technical problems are likely because of the size of the operation. The government is also responsible for interest payments, which add about $650 million per month to the overall refund cost.

Small business owners who had already been dealing with shifting trade policies said the uncertainty had been damaging. Many had joined coalitions opposing the tariffs, arguing that the duties disrupted supply chains and forced difficult decisions including layoffs and reduced investment. A representative of a small-business advocacy group involved in litigation against the tariffs said, “There’s a sense that even if the money comes back, it’s too late to reverse what’s already happened.”

Further legal uncertainty remains

Analysts say the wider economic effect of the refunds may be limited because companies could hold on to the money rather than spend it, given continuing uncertainty over US trade policy. The Trump administration has already opened new investigations under other legal authorities that could result in fresh tariffs, potentially reducing the impact of the repayments.

The legal dispute may also continue. The administration has not ruled out further court action aimed at limiting or delaying refunds, even though lower courts have ordered repayments to move forward.

The development has highlighted the consequences of using emergency powers for broad economic action. While large corporations have moved quickly to recover billions, smaller firms remain concerned that limited resources and administrative hurdles could again leave them at a disadvantage as the refund process unfolds.