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A federal judge in New York has ruled that companies which paid tariffs later struck down by the Supreme Court are entitled to refunds — a significant defeat for the Trump administration.
Judge Richard Eaton of the U.S. Court of International Trade issued the ruling on Wednesday (March 4), writing that "all importers of record" were "entitled to benefit" from the Supreme Court's decision striking down sweeping double-digit import taxes. President Trump had imposed those tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977.
The Supreme Court found the IEEPA tariffs unconstitutional in its February 20 ruling, determining that the president could not unilaterally set and change tariffs because that power clearly belongs to Congress. The decision wiped out the sweeping "reciprocal" tariffs President Trump had placed on nearly every country in the world.
Eaton's ruling came in a case brought by Atmus Filtration, a Nashville, Tennessee, company that makes filters and filtration products. The judge also ordered U.S. Customs and Border Protection to stop collecting the tariffs on goods still moving through the "liquidation" process — the agency's final accounting of what importers owe. For goods already past that stage, the agency must recalculate duties without the tariffs included.
Eaton also stated that he alone "will hear cases pertaining to the refund of IEEPA duties," offering clarity on a process the Supreme Court did not address in its ruling.
The stakes are enormous. According to calculations by the Penn Wharton Budget Model, the federal government collected more than $130 billion in the now-defunct tariffs through mid-December and could ultimately face refunds totaling $175 billion.
The path to Wednesday's ruling accelerated earlier this week when another federal court rejected the Trump administration's attempt to slow the refund process. The U.S. Court of Appeals for the Federal Circuit forwarded the matter to the New York trade court to sort out the details.
Now, U.S. Customs and Border Protection must develop a way to process the refunds at scale.
Importers have 180 days from the final liquidation of their goods to formally contest tariff duties. Once that window closes, the liquidation becomes legally final. The next steps will depend heavily on how — and how quickly — the government responds to the court's order.