Debate Over Seeking Tariff Refunds Grows as Court Decision Nears

Trade lawyers are urging clients to act immediately to get in line for a refund if the Supreme Court declares a sizable portion of President Donald Trump’s tariffs illegal.

But they don’t agree on how clients should try to get their money back.

At stake is tens of billions of dollars companies have paid on imports from virtually every country the US trades with—at least $90 billion, according to the latest trade statistics from September.

Importers have three options: They can tell the government that they think a tariff they paid was unlawful and shouldn’t be finalized—a process called liquidation. They can wait until after the tariff is liquidated, when an administrative process opens to protest a duty. Or they can ask a court to suspend liquidation—a step already taken by companies including Revlon and Kawasaki.

Their path—however they proceed—is light on legal precedent. Trade lawyers differ over advice, with some saying the best strategy depends—on how big a company is, how much it has paid, and where it is in the timeline of its tariff payments.

“The reason why you’re hearing a panoply of different options is because we fundamentally don’t know what’s going to happen,” said Luis Arandia, a partner at Barnes & Thornburg. “You have to prepare for all kinds of different outcomes.”

Several conservative justices voiced skepticism about the administration’s positions during Nov. 5 oral arguments before the nation’s highest court, fueling companies’ hopes that they’ll get back some of what they paid. The case involves only the tariffs imposed under an emergency powers law, the International Emergency Economic Powers Act or IEEPA—accounting for a significant portion, but not all, of the tariffs Trump has imposed in his second term.

If the court rules the tariffs unlawful, it could call for refunds or kick the refund question to a lower court, which could also leave it to Customs to determine a refund process.

In the meantime, “do nothing” isn’t high on anyone’s list of suggestions.

“If you just rest on your laurels thinking the government will pay you back, you are really rolling the dice,” said Brett Johnson, a partner at Snell & Wilmer. “And even if they did, it would probably be a couple of years before they figure that one out.”

Extend Liquidation

The first decision facing importers trying to protect their potential refund: Whether to act before or after Customs makes the final calculation of their tariff—a step known as liquidation.

Importers pay an estimated tariff when an entry crosses the border. Usually, a 314-day period follows before the payment is liquidated.

Trump imposed the first IEEPA tariffs in early February, so those entries would liquidate in mid-December.

There’s a risk that an importer could lose its right to a refund after the entry liquidates, said Kelsey Christensen, a senior attorney at Clark Hill.

Companies looking to buy more time before the payment is finalized could try asking Customs to extend the liquidation period. If that works, they’d delay liquidation until the court decision comes down, potentially avoiding protests or legal challenges. But it isn’t certain that Customs would agree to an extension.

Costco, for example, said in a Nov. 28 filing that CBP denied its request to extend liquidation for entries that were subject to the IEEPA tariffs.

Protest

Option two: After the payment has liquidated, companies could file a protest—a standard method for challenging a Customs decision—arguing the tariff shouldn’t have been paid because a court declared the policy unlawful.

Companies taking this route hope that if a court decision leads to refunds, and those are administered through Customs’ normal procedures, they’ll have skipped ahead in line by getting their protest in early.

They’re asking Customs now to suspend its consideration of the protest while the court case is pending—basically saying, “put it on ice” for now, Arandia said.

There’s a legal wrinkle with using the protest mechanism, said Robert Shapiro, a partner at Thompson Coburn. It’s designed to protest specific US Customs decisions on a given import—but in the case of a Supreme Court decision overturning the IEEPA tariffs, Customs wouldn’t have made a decision.

“The protest model doesn’t seem to work for it,” Shapiro said. “So then that falls into a gap, where there isn’t a defined procedure.”

Sue

Johnson said he’s advising clients to file a lawsuit at the Court of International Trade if they have “significant” payments at stake—over about $1.5 million.

Companies generally aren’t supposed to bring cases to that court until they’ve exhausted administrative avenues, Johnson said. But some are doing it sooner, pointing to an upcoming date of liquidation.

For example, Revlon said in a Nov. 14 filing at the Court of International Trade that it faces a Jan. 31, 2026 liquidation date for tariffs it had paid earlier in the year, and that refunds aren’t guaranteed even if the Supreme Court finds the IEEPA tariffs to be unlawful.

“Plaintiffs seek relief from the impending final liquidations to ensure that its right to a complete refund is not jeopardized (and is to that end filing a motion for a preliminary injunction to suspend liquidation),” the filing said.

The current political climate gives some companies pause before suing, said Ted Murphy, co-leader of the global arbitration, trade and advocacy practice at Sidley Austin.

“At least until the Supreme Court rules, they’re not super interested in being a plaintiff v. Trump on the signature policy initiative.”

The case is Learning Resources, Inc. v. Trump, U.S., No. 24-1287.