Customs officials to lay out tariff refund plans to US trade judge

 Customs officials will head to court Friday to lay out ideas for how to process refunds for billions of dollars of tariffs invalidated by the Supreme Court. 

Judge Richard Eaton, who serves on the U.S. Court of International Trade in New York, began managing the process this week.  

He scheduled the closed-door session after the Trump administration signaled that refunds will take time. At an earlier hearing, the judge said the government’s position amounts to calling refunds “really, really hard.” 

“So, on Friday, we’re going to hear at least the initial ideas from the customs service as to how this will proceed,” Eaton said. 

More than 2,000 companies have filed lawsuits seeking refunds of Trump’s sweeping levies imposed under the 1977 International Emergency Economic Powers Act (IEEPA). Last month, the Supreme Court ruled 6-3 that the statute doesn’t authorize tariffs. 

The trade court’s chief judge has selected Eaton, an appointee of former President Clinton, to oversee the fallout. He quickly made clear “every single cent” must be returned, but he wants a streamlined process. 

“You are going to have to answer 2,000 cases within 60 days, and I am going to have to hear 2,000 cases. We don’t want that to be the result,” Eaton told the Trump administration at Wednesday’s hearing.

“We also don’t want to require people who have a claim to file suit,” he continued. “We want to work out a method by which those importers can make a claim.” 

Justice Department attorney Claudia Burke warned the judge that each tariff entry must undergo an individual review before a refund can be processed.  Nearly 72 million tariff entries were filed in the year after Trump began his sweeping levies, according to Customs and Border Protection data, nearly double the prior year. 

“Obviously, that is going to require a significant effort. I don’t know the number of people who are tasked with this job,” Burke said at the earlier hearing. 

It echoes warnings from other lawyers involved and even Supreme Court Justice Amy Coney Barrett, who have suggested the refund process will be messy. 

“I don’t anticipate that at all,” Eaton pushed back Wednesday. “The customs service is going to act with goodwill to comply with the decision of the Supreme Court.” 

That decision provides no guidance about refunds. It leaves Eaton to figure it out.

For most importers, they’ve only paid an estimated tariff so far.  

Customs officials don’t typically finalize the amount until nearly a year later, a step known as “liquidation.” And even after liquidation, there’s still a 90-day period for the government to make corrections. 

Eaton sees those imports as being the easiest to deal with. 

“The customs service will do what it knows how to do: liquidate the entries without the IEEPA duties and issue refunds, just as it has done in thousands and thousands of cases and with respect to millions of dollars in the past,” the judge said.  

“Customs knows how to do this.” 

Already, Eaton compelled the Trump administration to commence that process. Friday’s closed-door conference mainly won’t concern those imports. 

At Friday’s session, the judge is focused on entries that have been liquidated. He also wants to sort out a process for companies who haven’t yet sued. 

“I hope that you will be cleared to straighten us out on at least some of these things on Friday,” Eaton told the government. 

The conference kicks off at 10:30 a.m. EST and will unfold in a federal courthouse in Lower Manhattan. The public and press will not be allowed inside. 

Atmus, a Nashville-based filtration company, has emerged as the lead plaintiff in the refund fight.  

But some of the companies that won at the Supreme Court are hoping to get involved, too.  

Led by wine importer VOS Selections, the five businesses are represented by the libertarian public-interest firm Liberty Justice Center and attorney Neal Katyal, who once served as then-President Obama’s top Supreme Court attorney. 

On Thursday afternoon, Katyal asked for a hearing in their case “at the earliest possible opportunity.” He said the businesses should be “able to fully participate in proceedings regarding the remedy” since they’ve been suing for almost a year and brought the tariff case to victory before the high court. 

It remains to be seen whether the trade court will allow them to do so. 

“I’m afraid I’m going to steal the march from VOS,” Eaton said this week. “And this case is going to be the case where we determine how customs should proceed.” 

https://thehill.com/regulation/court-battles/5770188-supreme-court-tariff-refunds/