Judge Orders Refunds for Companies That Paid Tariffs Struck Down by Supreme Court
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A federal judge has ruled that companies that paid tariffs later invalidated by the Supreme Court of the United States are entitled to refunds, a decision that could result in tens of billions of dollars being returned to importers and represents a setback for the administration of Donald Trump.
Judge Richard K. Eaton of the U.S. Court of International Trade said importers who paid duties imposed under the International Emergency Economic Powers Act must benefit from the high court’s ruling, which determined the president lacked authority under the statute to impose sweeping tariffs.
In his ruling issued in March, Eaton said “all importers of record” who paid tariffs under the emergency powers law are entitled to refunds from U.S. customs authorities. Analysts estimate the potential repayment could reach as much as $175 billion depending on how claims are processed and which tariffs are deemed refundable.
The dispute stems from a series of tariffs announced by Trump in early 2025 on imports from several countries, including Canada, Mexico, and China. The administration argued the tariffs were justified under the International Emergency Economic Powers Act, a 1977 law that allows the president to regulate certain economic transactions during national emergencies.
Businesses, trade groups, and several U.S. states challenged the tariffs, arguing that the statute does not authorize the executive branch to impose taxes on imports and that tariff authority rests with Congress.
Two major lawsuits — Learning Resources Inc. v. Trump and Trump v. V.O.S. Selections Inc. — advanced through federal courts in 2025. In May of that year, the Court of International Trade ruled that the tariffs exceeded presidential authority and permanently blocked their enforcement.
The U.S. Court of Appeals later upheld the Federal Circuit’s decision. The Trump administration appealed to the Supreme Court, which agreed to hear the consolidated cases and scheduled oral arguments for November 2025.
During the arguments, several justices questioned whether the emergency powers law provided a legal basis for tariffs. Legal analysts noted that members of both the court’s conservative and liberal wings appeared skeptical of the administration’s interpretation of the statute.
On Feb. 20, the Supreme Court issued its decision, ruling that the International Emergency Economic Powers Act does not grant the president authority to impose tariffs. The majority opinion, written by Chief Justice John Roberts and joined by six justices, concluded that the law’s language allowing the president to “regulate” importation does not extend to imposing taxes or duties.
Roberts wrote that the statute contains “no reference to tariffs or duties” and warned that interpreting it to grant such authority would effectively allow the president to impose tariffs of unlimited scope without clear congressional authorization.
The ruling upheld the lower court decision in the V.O.S. Selections case while dismissing the Learning Resources case on jurisdictional grounds, determining that disputes over tariffs fall within the exclusive jurisdiction of the Court of International Trade.
Although the Supreme Court invalidated the tariffs, it did not specify how previously collected duties should be handled. Eaton’s ruling now clarifies that importers are entitled to seek repayment.
The financial implications could be substantial. By September 2025, the U.S. government had collected roughly $90 billion in tariffs tied to the policy, according to court records and government reports. Thousands of companies had already filed lawsuits seeking refunds before and after the Supreme Court decision.
Bloomberg News reported that more than 2,000 claims had been filed by the end of February 2026 as companies sought to recover tariffs paid under the policy.
Legal experts say the refund process could take years as courts determine how claims are processed and whether certain duties require additional legal actions to recover.
The decision has also raised broader questions about presidential authority in trade policy. While Congress has granted presidents certain powers to impose tariffs under specific statutes, courts have emphasized that taxation authority ultimately resides with the legislative branch.
Following the Supreme Court ruling, the Trump administration said it could pursue tariffs through other legal avenues explicitly authorized by Congress, including provisions of the Trade Expansion Act of 1962 and the Trade Act of 1974. Those statutes allow tariffs under limited circumstances, such as national security concerns or unfair trade practices, but require investigations by federal agencies and impose time limits.
Political reactions to the court’s ruling have been mixed. Some lawmakers from both parties supported the decision as a reaffirmation of Congress’s authority over taxation and trade policy, while others criticized it as undermining the president’s ability to respond quickly to economic and national security threats.
Additional litigation is expected as companies continue to seek repayment and courts determine how refunds should be administered. Economists and trade experts say the outcome could have lasting implications for the balance of power between Congress and the presidency in setting U.S. trade policy.
