US importers can begin seeking refunds for nullified tariffs on Monday

U.S. Launches Refund System for Unconstitutional Trump-Era Tariffs

A new refund system for businesses that paid tariffs deemed unconstitutional by the U.S. Supreme Court is set to launch Monday morning, marking the first step in what could be a lengthy reimbursement process worth billions of dollars.

Starting at 8 a.m., importers and their brokers can begin submitting refund claims through an online portal established by U.S. Customs and Border Protection (CBP). The system will process reimbursements for tariffs that were collected under former President Donald Trump’s emergency powers declaration, which the Supreme Court ruled in February exceeded presidential authority.

In a 6-3 decision on February 20, the high court determined that Trump had overstepped his constitutional bounds when he imposed new import tax rates on products from almost every country outside the United States. Trump had cited the U.S. trade deficit as a national emergency that warranted invoking the 1977 International Emergency Economic Powers Act (IEEPA), but the court found this action usurped Congress’ constitutional power to set taxes.

Although the Supreme Court ruling did not specifically address refunds, a subsequent determination by a judge at the U.S. Court of International Trade established that affected companies are entitled to reimbursement.

The scale of refunds is substantial. According to CBP court filings, over 330,000 importers paid approximately $166 billion in tariffs on more than 53 million shipments. As of April 14, 56,497 importers had completed registration for the electronic payment system and were eligible for refunds totaling $127 billion, including interest.

However, not all importers will receive immediate relief. The first phase of the refund system is limited to cases where tariffs were estimated but not finalized, or within 80 days of receiving a final accounting. The government plans to process refunds in phases, beginning with more recent payments.

“If there is an entry on that file that does not qualify, it may cause the entire entry to be rejected or that line item might be rejected by Customs,” explained Meghann Supino, a partner at law firm Ice Miller. She advised clients to carefully compile all necessary documentation numbers in their declarations.

Businesses seeking refunds face a complex process requiring meticulous attention to detail. According to Nghi Huynh, partner-in-charge of transfer pricing at accounting and consulting firm Armanino, most companies will have imported various items, not all of which will qualify immediately for refunds.

“It’s about having a clear process in place and keeping track of what’s been submitted and what’s been paid, so nothing falls through the cracks,” Huynh said. “Each file can include thousands of entries, but accuracy is critical, as submissions can be rejected if formatting or data is incorrect.”

Once CBP approves a claim, the agency estimates it will take 60-90 days for a refund to be issued, further extending the timeline for reimbursement.

Small businesses have been particularly eager for the refund process to begin. Brad Jackson, co-founder of After Action Cigars in Rochester, Minnesota, which imports products from Nicaragua and the Dominican Republic, said his company paid $34,000 in tariffs last year and absorbed much of that cost rather than raising customer prices.

“My main concern is the turnaround time,” Jackson said. “A refund process that takes several months to complete doesn’t solve the cash flow problem that it is supposed to fix.”

A significant question remains whether consumers will ultimately benefit from these refunds. Since tariffs are paid directly by importers, who often pass these costs on to customers through higher prices, consumers may be wondering if they’ll see any reimbursement.

The system launching Monday will refund tariffs directly to the businesses that paid them, with no obligation to share the proceeds with customers. However, class-action lawsuits seeking to force companies like Costco and Essilor Luxottica (maker of Ray-Ban) to reimburse shoppers are currently moving through the U.S. legal system.

Individual consumers may have better luck receiving refunds from delivery companies like FedEx and UPS, which collected tariffs directly from consumers on international shipments. FedEx has already committed to returning tariff refunds to customers once it receives them from CBP.

“Supporting our customers as they navigate regulatory changes remains our top priority,” FedEx stated. “We are working with our customers as CBP begins processing refunds and plan to begin filing claims on April 20.”

As the refund system launches, experts advise patience and diligence, acknowledging that like any new electronic program with high demand, there may be initial technical challenges in the process.