Washington — A federal court on Monday rejected the Trump administration’s attempt to slow the rollback of billions of dollars in tariffs that the Supreme Court struck down as illegal last month.
The U.S. Court of Appeals for the Federal Circuit has begun the next stage in the recovery process by sending it to a lower court for settlement.
In a court filing on Friday, Trump’s Justice Department urged the Federal Circuit to proceed with caution and hold off for 90 days. But the judges refused.
The Supreme Court ruled on February 20 that Trump’s sweeping tariffs on most of the world’s countries were illegal, paving the way for importers who paid them to seek refunds.
The government had collected more than $130 billion in tariffs by mid-December, and could eventually find itself on the hook for a $175 billion refund, according to calculations from Penn Wharton’s budget model.
But the Supreme Court did not provide any guidance on refunds; They didn’t even mention her decision. Now the US International Trade Court in New York will decide how to proceed with the complex recovery process.
“I expect the ICC to quickly issue an order requesting a status update from the government on its plans with respect to refunds (or urgent briefing),” said trade lawyer Ryan Majerus, a partner at King. & Spalding and a former US trade official. “I expect the court to take an aggressive stance and ask the government to justify how it intends to comply with the Supreme Court ruling.”
Siddhartha Rao, Partner at Huggett Newman Regal & Kenney said he has received a lot of calls from customers with questions.
“We are somewhat in uncharted territory,” he added.
The Trump administration is seeking to impose new tariffs to replace those struck down by the Supreme Court.
One question is how the government can actually pay for these refunds, he said.
“Everyone is more or less aware of the fact that there’s nothing over a hundred billion dollars, you know, in a room somewhere just to cut checks,” Rao said. “So, you know, this is a Treasury issue, and it may be that the administration is reimposing tariffs for the reasons mentioned… It’s important for strategic trade agreements and bargaining power and all that. But it may also be that they need to raise revenues to pay for the refunds.”
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May Anderson reported from New York.
Associated Press writer Lindsay Whitehurst in Washington contributed to this story.