Trump Appeals Order Allowing Universal Tariff Refunds

The Trump administration announced on Friday its intention to appeal a federal court order that would allow all importers who paid tariffs later struck down by the Supreme Court to seek refunds — not just those who filed individual lawsuits. The appeal threatens to halt or slow what has already become a massive refund process, with $20.6 billion already returned to businesses and applications for $85 billion in refunds submitted, according to AP News.

At stake is the return of an estimated $166 billion in tariffs collected under the International Emergency Economic Powers Act (IEEPA) between April 2025 and February 2026 — duties the Supreme Court ruled unconstitutional in a landmark 6-3 decision.

Background: The Supreme Court Ruling

On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that President Trump lacked constitutional authority to impose country-by-country tariffs under IEEPA. Chief Justice John Roberts wrote for the majority that “when Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits.” The decision was joined by the court’s three liberal justices as well as two Trump appointees — Justices Amy Coney Barrett and Neil Gorsuch — as BBC News reported.

Following the ruling, Judge Richard K. Eaton of the U.S. Court of International Trade ordered in March that all importers who paid the invalidated tariffs are entitled to refunds, not merely the more than 1,000 companies that had filed individual lawsuits. Customs and Border Protection (CBP) subsequently launched the CAPE refund portal on April 20, which briefly crashed due to overwhelming demand, as CBS News detailed.

The Appeal and Legal Arguments

The Justice Department informed Judge Eaton of its planned appeal on Friday, arguing that the universal injunction exceeded the court’s authority under Trump v. CASA, Inc. (2025), a Supreme Court precedent restricting nationwide injunctions. The administration contends that only businesses that filed lawsuits — approximately 1,000 companies — are entitled to refunds.

However, legal experts like Ilya Somin, a professor at George Mason University who helped bring the original case, counter that CASA applies to injunctions under the Judiciary Act of 1789, not the separate 1980 statute governing the Court of International Trade. Writing on Reason / The Volokh Conspiracy, Somin argued that “this situation illustrates why we need universal injunctions in some types of cases,” noting that requiring each of the thousands of affected businesses to file their own lawsuits “would be a huge waste of time and money.”

What’s at Stake

If the appeal succeeds, only the 1,000+ businesses that filed lawsuits would receive refunds. The remaining roughly 329,000 importers would need to file their own legal actions — a prohibitive burden for many small businesses. If the appeal fails, full refunds continue for all importers, potentially totaling $166 billion.

During the appeal process, the administration may seek a stay, which could freeze refunds while litigation continues. As Barry Appleton, a professor at New York Law School, warned: “If the government can freeze the refund machinery while it litigates, it buys months, and every month of delay is a month the Treasury keeps the money.”

Businesses Respond

Some businesses have already received partial refunds. Jay Foreman, CEO of toy company Basic Fun, received about $450,000 — roughly 7% of his total claim — but described the pace as a “total slow roll.” Kevin Datoo, president of Manscaped, received about 30% of the $12 million his company applied for, noting the need to “shore up the balance sheet because there’s still a whole second chapter here.”

Major retailers have pledged to pass refunds to consumers. Walmart CFO John David Rainey told analysts the company would implement price cuts using its refunds, while Costco CEO Ron Vachris promised to return tariff costs to members. Shipping companies FedEx, UPS, and DHL have also committed to transmitting refunds to customers who paid the import taxes, as The Guardian reported.

Broader Trade Landscape

Even as the IEEPA refund process unfolds, Trump has imposed new tariffs under Section 122 of the Trade Act of 1974 — a 10% global levy that replaced the struck-down IEEPA duties. The trade court also ruled against this tariff in early May, suggesting ongoing legal battles across multiple fronts. Additional tariffs under Section 232 (steel, aluminum, autos) and Section 301 (China trade practices) remain untouched by the Supreme Court ruling.

What to Watch For

The appeal now heads to the U.S. Court of Appeals for the Federal Circuit. Key questions include whether the court will grant a stay of Judge Eaton’s order while the appeal proceeds, how quickly the case can be resolved, and whether small businesses without legal resources will be able to recover their tariff payments if the appeal succeeds. A scheduled June 9 hearing for CBP Commissioner Rodney Scott to explain the refund timeline also remains uncertain given the appeal.

As Somin put it: “Ultimately, the government illegally seized billions of dollars and therefore must pay them back. If I unjustly and illegally take your property, I have a duty to give it back, and pay interest. The same principle applies when the federal government does it.”