Every month of delay is a month the Treasury keeps the money
In the wake of a Supreme Court ruling that stripped the executive branch of its authority to impose sweeping reciprocal tariffs, the machinery of restitution had barely begun to turn before the Trump administration moved to slow it down. By appealing a federal judge's order that would have extended refunds to all 330,000 affected importers — not merely those who had sued — the government has introduced fresh uncertainty into a process already distributing billions. The episode raises an enduring question about the relationship between legal remedy and political will: when a court declares a wrong, who decides how fully it is righted, and how soon.
- The Supreme Court's February ruling left no ambiguity — tariffs imposed on nearly every trading partner were unconstitutional, and roughly $166 billion in refunds was owed to American businesses.
- With $85 billion in claims accepted and $20.6 billion already disbursed, the refund process was gaining momentum before the Justice Department abruptly announced its appeal, threatening to freeze the machinery for months.
- The administration's argument is narrow but high-stakes: only companies that filed lawsuits deserve compensation, potentially cutting off tens of thousands of importers who paid unlawful duties without going to court.
- Judge Eaton is pressing for direct accountability, demanding the CBP commissioner appear in person to explain the timeline — a demand the government is also contesting, compounding the standoff.
- For smaller businesses — a toy company waiting on $6 million, a distillery that received $18,000 of $90,000 owed — the appeal is not an abstraction; it is deferred survival, delayed investment, and mounting debt.
The Supreme Court had already settled the constitutional question in late February: President Trump lacked the authority to impose the sweeping reciprocal tariffs he'd levied on nearly every trading partner beginning in April 2025. The government owed businesses an estimated $166 billion. By mid-May, Customs and Border Protection had begun accepting claims, $85 billion in applications had been filed, and $20.6 billion had been directed to the Treasury for disbursement. Then, on a Friday in late May, the administration announced it would appeal.
The target of the appeal was a blanket order from federal Judge Richard K. Eaton, who had directed that all 330,000 importers who paid the invalidated tariffs — not just those who had filed lawsuits — were entitled to refunds. Justice Department lawyers argued the Supreme Court's ruling did not automatically entitle every importer to compensation, only those who had actively sued. They also objected to Eaton's demand that CBP Commissioner Rodney Scott appear personally in court on June 9 to account for the pace of repayment. Eaton was unmoved, stating plainly that the remedy for unlawful collection was refund — full stop.
Trade law experts noted that even a losing appeal could serve a practical purpose: every month of delay allows the Treasury to hold the money longer. The refund process itself remained technically complex, with older liquidated accounts requiring system upgrades and case-by-case orders before recalculation could begin.
For large retailers, the refunds were meaningful but not existential. Walmart's CFO pledged price cuts; Costco promised to return costs passed to members; FedEx, UPS, and DHL committed to routing refunds back to the customers who had ultimately borne the tariff burden.
For smaller operators, the stakes were far more immediate. The CEO of toy company Basic Fun had received $450,000 — just 7% of his claim — and described the pace since as a slow roll. The president of men's grooming brand Manscaped had collected roughly 30% of a $12 million claim while his company deferred investments and took on debt. The owner of Greenbar Distillery in Los Angeles had received $18,000 of $90,000 owed for herbs, spices, and packaging sourced abroad. He had faced an impossible choice during the tariff period: raise prices and lose customers, or hold prices and stop making money. With an appeal now pending, the timeline for full recovery remained, once again, uncertain.
The Supreme Court had already decided the matter in late February: President Trump lacked the constitutional power to impose the tariffs he called reciprocal, the ones he'd levied on nearly every trading partner starting in April 2025. The ruling was clear, the math was clear—the government owed businesses roughly $166 billion in refunds for duties they'd paid on goods that should never have been taxed. By mid-May, the machinery of restitution had begun to turn. Customs and Border Protection started accepting claims. Money started moving. Then, on a Friday in late May, the Trump administration announced it would appeal.
The appeal targets a federal judge's order that would have made the refund process universal—open to all 330,000 importers who paid the invalidated tariffs, not just the ones who'd filed lawsuits to reclaim their money. Judge Richard K. Eaton had issued that blanket directive after watching the refund system work fairly smoothly for three weeks. Applications totaling $85 billion had been accepted for processing by May 22. The Treasury Department had already been directed to issue $20.6 billion. The process was moving. Then the Justice Department lawyers told the judge they intended to challenge his authority to order refunds for everyone.
Their argument was narrow but consequential: only companies that had sued deserved refunds, they contended. The Supreme Court's decision, they said, didn't necessarily entitle every importer of record to compensation. They also objected to Judge Eaton's demand that CBP Commissioner Rodney Scott appear in court on June 9 to explain how long it would take to repay all eligible businesses and whether the government should accelerate the process. A high-ranking presidential appointee couldn't be compelled to testify, the lawyers argued. Scott's deputies would have to do.
Eaton pushed back. He wanted to hear directly from Scott whether the government would return all the money it had collected between April 2025 and late February 2026. The judge was blunt: "It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties." The appeal, however, created immediate uncertainty. Even if the government had already lost the larger war before the Supreme Court, as trade law professor Barry Appleton noted, an appeal could freeze the refund machinery for months. Every month of delay meant the Treasury kept the money longer.
The refund process itself was already complicated. Customs and Border Protection was handling claims in phases, starting with payments that hadn't been finalized before the Supreme Court decision—the simpler cases still sitting open in the system. For older accounts where duties had been officially liquidated, the agency needed technological upgrades to its refund portal and importer-specific orders from each lawsuit before it could recalculate final tax bills. More than 1,000 companies had sued in trade court. But it remained unclear how many of the importers who'd paid tariffs without filing lawsuits might lose their right to refunds if Eaton's universal order was overturned on appeal.
Meanwhile, some of the businesses that had received partial refunds were already planning how to use the money. Walmart's chief financial officer said the company would implement price cuts, though the maximum refund represented less than half of 1% of Walmart's annual U.S. sales. Costco promised to return tariff costs passed on to members, though the timing and form of those returns would depend on the size of the refund and other factors. Shipping companies like FedEx, UPS, and DHL, which had acted as customs brokers, committed to passing refunds along to the customers who'd ultimately paid the tariffs.
For smaller businesses, the refunds represented something more urgent. Jay Foreman, CEO of toy company Basic Fun, received about $450,000—just 7% of his total claim—over two consecutive days in May. He called the pace since then a "total slow roll." Kevin Datoo, president of men's grooming brand Manscaped, had received about 30% of the $12 million he'd applied for. His San Diego company had deferred investments and taken on debt to cover tariffs on imports from Indonesia, China, and elsewhere in Asia. "We need to shore up the balance sheet," he said, "because there's still a whole second chapter here." Melkon Khosrovian, who owns Greenbar Distillery in Los Angeles, had applied for about $90,000 in refunds for 17 shipments of herbs, spices, and packaging hard to source domestically. He'd received $18,000. The tariffs had forced an impossible choice: raise prices and lose customers, or keep prices steady and stop making money. Now, with an appeal pending, the timeline for full recovery remained unknown.
Notable Quotes
It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties.— Judge Richard K. Eaton
If the government can freeze the refund machinery while it litigates, it buys months, and every month of delay is a month the Treasury keeps the money.— Barry Appleton, trade law professor at New York Law School
The Hearth Conversation Another angle on the story
Why would the administration appeal an order that just tells them to refund money they've already been told by the Supreme Court they shouldn't have collected?
Because the appeal buys time. If they can keep the refund machinery frozen while they litigate, that's months the Treasury holds onto billions of dollars. The government has already lost the constitutional argument, but delay is its own kind of victory.
But the judge seems to have the law on his side. He said it's undisputed that unlawfully collected duties must be refunded.
He does, and he does. But the administration's lawyers are arguing the judge overstepped—that only companies that sued deserve refunds, not all 330,000 importers. It's a narrower reading of what the Supreme Court actually required.
How many importers might lose out if the appeal succeeds?
Nobody knows exactly. More than 1,000 companies sued. But there are hundreds of thousands of importers who paid tariffs without filing lawsuits. If the appeal works, those businesses might get nothing.
What about the businesses that have already received partial refunds? Are they just waiting now?
Some are. A toy company got 7% of what it's owed. A distillery got 20%. They're using the money to shore up balance sheets and cover debts they took on to pay the tariffs in the first place. But they're also watching to see if the appeal slows everything down further.
And the retailers—are they actually going to cut prices?
Walmart and Costco have said they will, but the refunds are small relative to their sales. For them, it's a gesture. For smaller importers, it's survival.