The Trump administration’s increasingly shaky trade agenda has been dealt another decisive blow.
After a federal appeals court denied the federal government’s request to delay refunds on International Emergency Economic Powers Act (IEEPA) tariffs earlier this week, the United States Court of International Trade (CIT) has ruled that Customs and Border Protection must begin the process of refunding importers.
CIT Judge Richard K. Eaton said that CBP should utilize standard procedures to issue paybacks to companies that paid the tariffs. While the CIT decision does not establish a refund process, it makes stipulations about customs entries that have not been liquidated—i.e., those that are pending liquidation—as well as those that have been liquidated but aren’t yet final.
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In the decision released Wednesday afternoon, Eaton wrote, “with respect to any and all unliquidated entries that were entered subject to the IEEPA duties, U.S. Customs and Border Protection is hereby directed to liquidate those entries without regard to the IEEPA duties. Any liquidated entries for which liquidation is not final shall be reliquidated without regard to IEEPA duties.”
“All importers of record whose entries were subject to IEEPA duties are entitled to the benefit” from the Supreme Court’s ruling against the tariffs, he added. Eaton indicated that he will be the only judge to hear cases pertaining to the IEEPA duties, including in V.O.S. Selections v. Trump, “So there is no danger that another Judge, even one in this Court, will reach any contrary conclusions.”
The CIT does not require importers to file lawsuits in order to obtain refunds, Eaton said, nor does the court desire a slew of additional cases to work through. “I want to make it clear to the customs service that they have to refund any money that was unlawfully collected,” Eaton told the Manhattan-based court while reading the ruling.
During the hearing, the Department of Justice expressed its opinion that importers should have to file suits in order to obtain refunds for liquidated customs entries. The DOJ made an oral motion for a stay pending any appeal of the decision authorized by the Attorney General, which Eaton swiftly denied.
A conference has been set for Friday wherein CBP is expected to provide updates on its refund plans. The DOJ asked that CBP be allowed to file a declaration before that hearing elucidating the administrative burden that millions of tariff refunds will foist upon on the agency. The judge said he would allow it, but expressed skepticism that the liquidation and refund actions would create the bottleneck that the federal government has claimed.
“What you have raised today is that each of these 79 million entries will have to have some kind of manual review. We live in the age of computers. It must be possible for the customs service to program its computer so it doesn’t need a manual review with respect to the IEEPA duties.”
“Customs knows how to do this,” he added. “They do it every day. They liquidate entries and make refunds.”
As of Wednesday, CBP had not yet issued any refunds on IEEPA tariffs, though the Trump administration admitted that it would have to pay interest on the refunds that are due. The Cato Institute estimated that the cost of interest on the tariff refunds could be as high as $700 million per each month that the payments are delayed.
The federal government has collected an estimated $175 billion in IEEPA tariff revenue since the tariffs were first announced in April 2025. More than 300,000 American importers have paid into these duties, and thus far, over 2,000 have filed lawsuits with the CIT with the goal of securing refunds.
