The $166B tariff mess begins

When the U.S. Supreme Court heard arguments last November about whether to strike down tariffs imposed by President Donald Trump under a 1977 federal law, Justice Amy Coney Barrett worried about whether refunding them would be a "mess."

Milbank LLP partner Neal K. Katyal, representing the businesses challenging the tariffs, responded by acknowledging that it would be "a very complicated thing."

More than three months after the U.S. Supreme Court struck down President Donald Trump's February decision to unilaterally impose tariffs under a 1977 federal law, the reimbursement process - with an estimated $166 billion at stake - has officially entered the messy stage.

U.S. Customs and Border Protection has reimbursed a little more than $20 billion to companies thus far and has received $85 billion in claims. But the remaining money - about $80 billion - is the object of an increasingly pointed dispute between Senior Judge Richard K. Eaton of the U.S. Court of International Trade and the Trump administration.

Claudia Burke, deputy director of the Justice Department's international trade field office, wrote that the CBP cannot refund tariff revenue that has been "liquidated" because too much time has passed unless an administrative protest is filed with the CBP or a lawsuit is filed with the trade court. V.O.S. Selections Inc. et al. v. U.S. et al., 25-00066 (CIT, filed April 14, 2025).

"It's this weird, mutually exclusive refund system where nobody quite knows exactly what the right path is to receive a refund," said Luke Mathers, a member of Sandler, Travis & Rosenberg PA and a former Justice Department attorney who handles customs matters.

Eaton tried to cut through the logjam by ordering the agency to refund the duties paid on all entries regardless of whether the importer filed an action in court, but the U.S. Court of Appeals for the Federal Circuit suspended that ruling and the Trump administration appealed it last month.

The government argues it cannot refund that money because Eaton's order is a "universal injunction" that it says is not permitted under a June 2025 decision by the Supreme Court. Trump et al. v. CASA Inc. et al., 2025 DJDAR 5795 (S. Ct., filed March 13, 2025).

"The showdown at the Federal Circuit is going to be over that," Mathers said.

Fear of Trump?

More than 1,000 companies, including Costco Wholesale Corp., have filed complaints seeking refunds. But many other companies, including Amazon.com Inc. and Apple Inc., have not done so.

President Donald Trump has noticed the companies that did not sue and suggested that not doing so would be "brilliant" in an April 21 appearance on CNBC. "If they don't do that, I'll remember them," he said.

Attorneys who represent companies said some will decide not to pursue refunds - either to avoid the Trump administration's wrath or because the amount of money that can be recovered is not significant enough to justify other potential downsides.

"We have advised clients to walk away from claims because they are not worth the effort," said Robert A. Shapiro, chair of Thompson Coburn LLP's international trade and transportation regulatory practice group.

He noted that some companies are seeking exceptions from tariffs the Trump administration is seeking under Section 301 of the Trade Act of 1974.

"It may be awkward to walk into that negotiation having sued them," Shapiro said. "That is definitely a factor that companies are considering."

Class actions seeking tariff refunds

Another factor affecting refund decisions is consumer class actions.

Several companies also are facing lawsuits seeking to prevent what plaintiffs' attorneys say is "double recovery," on the argument that the defendants charged higher prices due to tariffs only to get a refund from the government.

Costco CEO Ron Vachris said during a May 29 earnings call that the company would make things right if it gets tariff money back, which hasn't happened yet. "Our plan is to return to our members in some form the portion of tariffs that were passed on to them," he said.

In a motion to dismiss plaintiff Matthew Stockov's lawsuit, Munger, Tolles & Olson LLP partner Brad D. Brian took a harder line, arguing that the complaint is not only unripe - because Costco hasn't received money yet - but that Stockov lacks standing to sue and that his equitable claims are meritless.

"It does not matter whether plaintiff paid a higher price than he thinks he should have paid," Brian wrote for the company. "Plaintiff got what he paid for, and Costco never suggested that it would (or even might) later refund part of the purchase price." Stockov v. Costco Wholesale Corp., 26-cv-02734 (N.D. Ill., filed March 11, 2026).

Federal Express Corp., facing consolidated consumer lawsuits in the Western District of Tennessee, is due to respond to those class actions later this month.

Retailers like Costco are in different positions than shippers like Federal Express because they charged specific amounts under the tariff scheme.

While retailers are avoiding commitments to refund money to consumers who bought a different variety of products, Federal Express said in a statement it is "fully committed to refunding all duties including the interest received from Customs and Border Protection."

"As a facilitator of trade, FedEx is different from a lot of other companies in this regard; we are effectively a passthrough," the company added.

Tim Meyer, a professor at Duke University School of Law, said companies may decline to seek refunds not only because of Trump but as a defense to class actions.

"It's a great argument for the companies," he said. "If there is no tax refund, there is nothing for the consumer to get."

Legal experts say the tariff battle is far from over, and that some businesses - especially smaller ones - may not receive full refunds despite the Supreme Court's decision declaring the tariffs illegal. Consumers may be even less likely to recover money.

"What the government is arguing is going to make it very hard for the small guy to get any money back," Shapiro said.

"If for some reason importers have not claimed a refund, it is likely that the government will keep that money," Mathers said.