The Donald Trump administration in the United States has begun to ‘hold out’ in an effort to reduce the scope of reciprocal tariff refunds deemed illegal by the federal Supreme Court. It is insisting on returning refunds only to companies that have filed lawsuits, rather than offering blanket refunds.
According to the U.S. political news outlet Politico, citing sources close to the White House, the Department of Justice argued in an appellate court hearing on November 9th (local time) that the government is not obligated to refund already collected tariffs across the board and will only issue refunds unless a court orders it for specific companies.
Previously, the U.S. Court of International Trade (CIT) ruled in favor of a filter company based in Nashville, Tennessee, that filed a lawsuit seeking tariff refunds. This verdict suggested that all importers might be eligible for refunds. In response, Customs and Border Protection (CBP) launched a reciprocal tariff refund system valued at $166 billion (about 252 trillion won). However, the Department of Justice appealed, questioning the CIT’s authority.
The Department of Justice contends that the CIT exceeded its powers by ordering blanket refunds for all companies nationwide, not just the litigants. They argue that the government cannot unilaterally issue refunds on tariff payments already finalized by CBP.
Moreover, the Department of Justice claims that the current refund system implemented by CBP is a voluntary government action, rather than a result of the CIT ruling. According to court documents, approximately 330,000 importing companies have paid the illegal reciprocal tariffs, and as of last month on the 22nd, CBP has approved $85 billion in refunds.
Legal experts believe the Department of Justice’s arguments are persuasive, suggesting that the government could win the appeal. This is based on precedents from the federal Supreme Court, which generally limit lower federal district courts to providing remedies only to the lawsuit parties and not issuing nationwide orders. The CIT shares the same authority as a federal district court.
If the government wins on appeal, the case is likely to proceed to the Supreme Court. The Supreme Court previously ruled in February that imposing reciprocal tariffs based on the International Emergency Economic Powers Act (IEEPA) is illegal but did not address the refund issue, leading to criticism for causing confusion.
Should the court accept the government’s logic, there are concerns that small and medium-sized businesses, unable to bear the costs and procedures of litigation, may abandon their claims. It is believed that this strategic element is part of the government’s motive for appealing.
Importers of wine, bicycles, and fishing gear have requested the CIT to recognize a class-action lawsuit representing all importers excluded from the refund system, arguing that they cannot afford individual refund litigation costs.
A toy company executive, who paid $7.5 million in reciprocal tariffs but only received $450,000 back, likened the government’s response to insurance companies that initially deny claims, describing it as a “war of attrition” strategy that only those who persist through repeated denials will succeed.