U.S. Federal Trade Judge Orders Trump Administration: Stop Calculating IEEPA Tariffs for Importers

After the U.S. Supreme Court ruled that Trump’s emergency tariffs were illegal, the refund process is accelerating through the judicial system.

On Wednesday, March 4th, U.S. Federal Trade Court Judge Richard Eaton ordered the U.S. Customs and Border Protection (CBP) to immediately stop including tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in importers’ clearance documents. He also questioned why the government continues to do so, given that the Supreme Court has already ruled these tariffs illegal.

Judge Eaton stated that the relevant tariffs already processed should be recalculated, and confirmed that thousands of refund lawsuits currently handled by the trade court will be consolidated for review.

At the hearing, Eaton clearly said, “The legal conclusion has been reached,” and the refund process can proceed “quite smoothly,” emphasizing that “every cent of IEEPA tariffs must be refunded.”

He also rejected the Department of Justice’s request for a stay and asked the department to provide further details on the refund arrangements by this Friday.

Wall Street Journal reported that last month, the Supreme Court ruled 6-3 that Trump’s use of IEEPA to impose so-called “reciprocal tariffs” on imported goods was unlawful.

Since the ruling, market uncertainty remains about when and how importers will receive refunds. Previously, the U.S. government disclosed in court documents that hundreds of thousands of importers had paid the disputed tariffs.

Tariff settlement process becomes core dispute

The Wednesday hearing and order stem from Atmus Filtration, a U.S. filter manufacturer, seeking approximately $11 million in IEEPA refunds.

However, the case quickly drew widespread attention because it involved a key issue: how the tariffs are processed after the Supreme Court’s ruling.

The dispute centers on the “liquidation” process by Customs and Border Protection (CBP). Liquidation refers to the formal calculation and confirmation of taxes previously paid based on estimates by importers.

During the hearing, Department of Justice lawyer Claudia Burke admitted that CBP is still including IEEPA tariffs in the liquidation process, which will complicate the refund process for affected importers.

There was a clear disagreement between Judge Eaton and the Department of Justice. The judge emphasized:

Every penny of IEEPA tariffs must be refunded. The Supreme Court has told you what your position is—you are to refund that money.

Claudia Burke countered that the refund process takes time because government agencies affected by the Supreme Court’s decision have not yet reached final positions on subsequent procedures.

She also stated that the government’s stance is not that “every importer will receive a refund,” as some importers may need to file separate claims with the trade court.

Judge Eaton rejected the Department of Justice’s request for a stay of his order and scheduled the next hearing for Friday morning, during which the Department will be asked to provide more detailed explanations of the refund process.

Large-scale refunds with interest to be paid

Currently, over 2,000 refund lawsuits are pending in the U.S. Trade Court, most of which were filed after oral arguments at the Supreme Court last November.

Pratik Shah, chief lawyer for Learning Resources, which won the Supreme Court case, stated:

This order confirms the obvious conclusion after the Supreme Court ruling—that everyone who paid IEEPA tariffs is entitled to a refund.

Additionally, earlier Wednesday, the U.S. government confirmed in a written document to Judge Eaton that it will pay interest on any amounts ultimately required to be refunded.

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