‘Slugfest’: Businesses gird for battle with White House over tariff refunds

Businesses are giving up hope the Trump administration will quickly issue refunds for the billions of dollars paid in tariffs the Supreme Court invalidated last month. Now they’re lawyering up and preparing for a drawn-out legal fight.

In the immediate aftermath of the Feb. 20 ruling, major trade groups including the U.S. Chamber of Commerce called for “swift” and “seamless” refunds of more than $130 billion in duties collected during the president’s second term. The administration, however, is working to slow them down — on Monday, an appeals court denied its request to delay refund proceedings until around June — while privately weighing options to delay refunds indefinitely.

According to court filings and half a dozen trade and customs experts, more than 2,000 refund-related cases are now pending at the New York-based U.S. Court of International Trade — a number that has grown by dozens since the Supreme Court struck down President Donald Trump’s global duties imposed under a 1977 emergency law. Trade attorneys say they’re fielding a surge of calls from companies racing to take legal action to keep their refund claims from expiring.

And trade lawyers and policy experts warn the current trickle of cases could become a flood if the courts and administration don’t lay out a general refund process for all importers, and instead require them to pursue repayment case by case — a scenario that could overwhelm the trade court and drag the refund fight out for years.

“There could be hundreds of thousands of suits,” said Rick Woldenberg, CEO of Learning Resources and hand2mind, a plaintiff in the case against Trump’s tariffs that reached the Supreme Court. “It would be pretty dumb to set up circumstances where they cause the Court of International Trade to be basically hobbled — brought to its knees by hundreds of thousands of pointless lawsuits — all to try and get back money that the Supreme Court says we have a right to.”

Nate Herman, executive vice president of the American Apparel and Footwear Association, which represents more than a thousand clothing and shoe brands, said his members have concluded, “This is not something that will happen in a matter of weeks — and possibly not even months.”

Companies view repayment as “nothing they can count on right now,” Herman added.

He said that while the group has no immediate plans to sue for refunds, the possibility has “been part of the discussion” as it waits to see guidance from the courts. “The atmosphere and the mood has changed.”

“This is going to be a slugfest,” predicted a senior executive at another Washington-based trade group that is also weighing potential legal action, granted anonymity to speak candidly about internal discussions. “There’s not going to be any easy or timely resolution.”

The fight for refunds is quickly becoming the next phase of the legal battle over Trump's tariffs, a signature part of his second-term agenda. With billions of dollars at stake and no repayment framework in place, the dispute risks deepening tensions between the White House and corporate America at a fragile time for the U.S. economy. It also gives Democrats another opening to hammer the administration on economic policy ahead of the 2026 midterm elections.

“This deliberate effort to withhold Americans’ hard-earned dollars is unacceptable,” said Jeanne Shaheen, the top Democrat on the Senate Foreign Relations Committee. Shaheen and several of her Democratic colleagues introduced Senate legislation last week requiring U.S. Customs and Border Protection to issue full refunds with interest for the tariffs. The proposal would also direct companies that receive refunds to pass the money on to consumers.

While the legislation has no hope of going anywhere in the GOP-controlled Congress, it’s a sign of how Democrats hope to use the issue in their public messaging.

Trump is “in a real tough spot right now, because he's got the refund issue that's clearly going to be challenged in the courts,” said Rep. Richard Neal (D-Mass.), the ranking member on the House Ways and Means Committee, which oversees trade policy. “If there are no refunds, he's likely to lose another court case. And if there is a refund, then he's going to get blamed if the companies don't pass it off to the consumer.”

A 6-3 majority on the Supreme Court ruled last month that Trump exceeded his authority under the 1977 International Emergency Economic Powers Act when he imposed the sweeping duties. But the justices did not order refunds for money already collected for those tariffs over the past year, or spell out a repayment process. Instead, it is up to the CIT to determine the next steps.

There is no formal timeline for the CIT to provide more information and schedule next steps in the legal process, although the appeals court order allows judges on the trade court to start offering more direction in the coming days or weeks on how it will handle the cases and whether it will streamline them.

The White House has blamed the Supreme Court majority for not clarifying the process in their ruling, and argued that they cannot act until the lower courts lay out a process for moving forward. “They take months and months to write an opinion and they don’t even discuss that point,” Trump told reporters at the White House on Feb. 20 shortly after the ruling came out. “I guess it has to get litigated for the next two years.”

But trade lawyers and others say that the president has far more agency than he’s claiming. Trump’s Justice Department, after all, promised in court filings last year that it would pay back tariff fees, plus interest, to the businesses who brought the suit if the government lost the case. The administration could launch a process for doing so, if it wanted to.

That resistance is already reshaping corporate strategy.

The Japanese auto manufacturer Nissan's U.S. subsidiary joined a growing wave of post-Supreme Court lawsuits last week, seeking refunds of IEEPA tariffs Nissan North America paid on “certain imported articles” covered by Trump’s now-invalidated emergency trade orders.

U.S. shipping behemoth FedEx has also filed a refund suit since the high court’s ruling, seeking a “full refund” of duties it paid.

Under customs law, importers generally have about 314 days after goods enter the country before a tariff payment is finalized. If companies fail to challenge the duty and request a refund after the duty is finalized, they must file a formal protest and, in some cases, challenge the decision in the CIT to recover funds.

Even when protests are filed, there is “no guarantee CBP accepts them,” said Chris Duncan, a trade lawyer at Squire Patton Boggs, during a webinar on tariffs, hosted by the firm on Feb. 23. Customs could deny a protest and force importers into court, he said. “They should accept them, [but] they don’t have to.”

Matthew Seligman, founder of the firm Grayhawk Law who has represented small and midsize importers in tariff litigation, said: “There's a very, very significant risk that importers who don't have good trade counsel are going to end up in this situation where the Supreme Court said these are unlawful, but they're never going to get their money back.”

Trade lawyers say the White House could avoid that outcome by directing Customs to process refunds administratively rather than forcing companies into individual protests and court fights — a step they argue would be consistent with positions the government itself has taken in court.

After the CIT first ruled the tariffs unlawful in May, the Justice Department asked the U.S. Court of Appeals for the Federal Circuit to stay that decision while it appealed the ruling. In that filing, government lawyers argued plaintiffs would not suffer irreparable harm because they would refund any unlawfully collected duties, with interest.

“This is a pointless exercise of creating chaos and confusion and fear when it's unnecessary. If they leave it sufficiently vague, then everybody is going to file a lawsuit. Stupid,” Woldenberg said.

Daniel Desrochers contributed to this report.