U.S. Businesses Could Receive Over \$200 Billion in Tariff Refunds if Courts Uphold Ruling Against Trump’s Duties

A federal appeals court ruling has challenged the legality of tariffs imposed by former President Donald Trump, raising the possibility that U.S. businesses may be entitled to more than \$200 billion in refunds.

On Friday, the appeals court determined that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) when imposing sweeping import duties during his second term. Tariffs affected countries including India, Brazil, and China, with rates reaching up to 50% for India and Brazil, and up to 145% for China earlier this year.

As of August 24, U.S. businesses had paid over \$210 billion in tariffs that courts now consider illegal. Trump acknowledged on Tuesday that if the Supreme Court upholds the appeals court ruling, the U.S. Treasury could be required to return the collected revenue.

Trump announced that his team is planning to take the case to the Supreme Court, potentially as early as Wednesday, in an effort to keep the tariffs in place past the October 14 deadline imposed by the appeals court. He described the ruling as “extremely significant” and warned that an unfavorable outcome could have serious consequences for the nation.

Legal experts note that the Supreme Court may choose not to hear the appeal, allowing the lower court’s decision to stand. If so, businesses could receive refunds, though the process may be complex. Options for handling refunds include reimbursing all importers, limiting refunds to plaintiffs named in the case, or requiring importers to submit claims through an administrative process. Representatives from the Treasury Department declined to comment on potential procedures.

Following a May decision by a three-judge panel at the U.S. Court of International Trade, which deemed Trump’s use of IEEPA to levy tariffs unlawful, trade lawyers recommended that their clients keep submitting administrative protests with U.S. Customs and Border Protection to preserve the possibility of future refunds. Meanwhile, some companies have been contacted by investment firms seeking to purchase interests in potential refund claims.

Experts caution that large-scale tariff refunds could affect the broader economy. The Treasury has used tariff revenue to reduce borrowing; returning funds could require increased issuance of Treasury bonds, potentially raising yields and borrowing costs. On Wednesday, the 30-year Treasury yield briefly hit 5%, its highest level since July.

Economists caution that large-scale tariff refunds could add to inflationary pressures. Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, highlighted that persistent budget deficits and past monetary policies have already increased the risk of rising prices.

The Supreme Court is expected to consider the case during its upcoming term. In the meantime, tariffs remain in effect while the appeal is pending.

Source: CNN