The country’s top trade court has clarified that it can order refunds on tariffs owed more than 314 days prior should the Supreme Court strike down President Donald Trump's emergency tariffs, easing importers' fears of a potential barrier to a refund rollout.
Dozens of companies, including food retail giant Costco, have filed cases in recent weeks seeking tariff refunds in the event that the Supreme Court rules against the Trump administration in a landmark case challenging the legality of new tariffs. As part of that effort, lawyers representing the companies in a consolidated case have been pushing for an extension to a deadline for finalizing their tariff rates over concerns that once finalized, they may not be eligible for refunds at a later date.
Tariffs are finalized 314 days after the goods arrive at the border, through a process known as “liquidation.” This is the final step in the import process, where U.S. Customs and Border Protection ensures that the correct duties were paid and corrects any discrepancies.
The first tariffs Trump imposed under the International Emergency Economic Powers Act – a 10% duty on Chinese imports – kicked in Feb. 4 and have a liquidation date of Dec. 15. Accordingly, more than 60 companies filed lawsuits to delay that liquidation and protect their ability to secure a potential refund for those tariffs in the future.
Lawyers representing the plaintiffs cited a 1983 case in their motion for an injunction to move the deadline, in which a federal circuit court found that once tariffs are liquidated, they cannot be recovered through subsequent litigation.
“[T]here is no question Plaintiffs face potential irreparable harm if its duties are allowed to liquidate,” the filing reads.
On Monday, a three-judge panel on the Court of International Trade (CIT) ruled against the plaintiffs, deciding that there is no need to move the deadline because it can order reliquidation in the event the tariffs are ruled unconstitutional.
The judges pointed to the administration’s own legal filings stating that it wouldn’t stand in the way of a refund process for IEEPA duties, if they are later found to be illegally collected. But the judges also noted that the court could step in if the administration later reversed that position.
“The Government would be judicially estopped from ‘assum[ing] a contrary position’ in the future,” the decision reads.
A trade lawyer granted anonymity to speak candidly about the case said the CIT ruling “removes some doubt” about a potential refund process in the event that the Supreme Court rules the administration overstepped in its use of IEEPA to impose tariffs.
Cut through the clutter! We deliver the news you need to stay informed about farm, food and rural issues. Sign up for a FREE month of Agri-Pulse here.
Peter Harrell (LinkedIn photo)“There have been some concerns raised that the administration would fight every liquidation and protest,” the lawyer said.
The position put forward by the administration is that it won’t do that, and if it does, the CIT judges can force a reliquidation, they added.
Peter Harrell, a trade lawyer and former senior director for international economics in President Joe Biden’s White House, said in a post to LinkedIn that the ruling constitutes “another step on the road to refunds being available.”
“My read is that this means that if SCOTUS rules IEEPA tariffs illegal, either (a) CBP will have to set up some kind of administrative refund process, or (b) everyone is just going to have to sue,” Harrell added.
Refund recipients could still be limited
The Supreme Court is expected to issue a judgement on the legality of Trump’s IEEPA tariffs early next year. Multiple justices during oral arguments on the case last month even raised the prospect of refunds in their lines of questioning. But legal analysts have warned those hoping for tariff relief that refunds could be limited to companies that have pursued legal action against the administration.
Accordingly, companies across the U.S. economy, including in the agriculture sector, have been grappling with the prospect of future legal action and weighing whether to follow Costco and others’ lead and file before the Supreme Court decision.
An ag lobbyist granted anonymity to discuss conversations with industry clients said they’d heard from a number of companies this month with questions about whether they should be mounting their own legal efforts after they saw the filings by Costco and others.
The latest assurance from the CIT that it believes it will be able to revisit tariffs paid more than 314 days prior as part of any future refund process will reassure some nervous executives that they can afford to hold off until the Supreme Court weighs in.
“The court basically agreed there's was really no harm here,” the trade lawyer told Agri-Pulse. They added that they have not been advising clients to file legal action before a Supreme Court decision.
“We don’t think that it’s going to expedite a refund,” the lawyer said.
