The US customs agency is preparing a system that will be ready to process refunds on billions of dollars of illegally collected tariffs in 45 days without requiring importers to sue, a court has been told.
Brandon Lord, a top official at US Customs and Border Protection (CBP), said in a filing to the US court of international trade on Friday that the total sum held in relation to such tariffs was estimated to be “approximately $166bn”.
The declaration came as government lawyers were meeting with a federal trade judge to hammer out a process for returning the money to about 330,000 importers.
The court of international trade’s website said the meeting would be a “closed conference”, while Gina Justice, its clerk, described it as a “settlement conference”.
The supreme court decided last month that a 1977 law designed to address national emergencies did not provide the legal justification for most of the Trump administration’s global tariffs.
On Wednesday Judge Richard Eaton of the court of international trade told CBP it must start paying back importers using its existing systems – with interest – in an order covering all affected importers, not just those who had taken their cases to court.
The supreme court struck down Donald Trump’s “liberation day” tariffs on 20 February, ruling that he had exceeded his authority when issuing them last year. The decision gave no detail on how importers would get their money back, leading to a swathe of lawsuits.
“Customs knows how to do this,” Eaton told a court hearing on Wednesday. He said the agency should be able to issue refunds simply on its system, which are regularly provided when importers are found to have overpaid initially.
When goods are brought into the US, an importer pays an estimated amount that is eventually finalised a little over 10 months later, in a process called liquidation. Eaton has said CBP should finalise the entry cost on shipments without the tariff – effectively issuing refunds.
“They do it every day. They liquidate entries and make refunds,” he said.
The order by Eaton came in a case brought by the manufacturer Atmus Filtration, which said in court filings it had paid about $11m (£8m) in illegal tariffs.
Atmus’s lawyers are expected to be able to attend Friday’s meeting remotely, according to court documents. It potentially earmarks the Atmus case as the vehicle that decides how to give tariff refunds more widely, for as many as 2,000 other cases brought so far.
“I don’t believe that any of this has to be chaotic with respect to anybody, because I know that you’re going to try to come up with a way of doing it,” Eaton said on Wednesday.
Lord said in his filing on Friday that more than 330,000 importers have made a total of over 53m entries “in which they have deposited or paid duties imposed pursuant to the International Emergency Economic Powers Act”. He said the new refunds process would “require minimal submission from importers”.
Separately, a group of Democratic attorneys general and governors across 24 US states said on Thursday that they would sue Trump over his more recent round of tariffs. In the aftermath of the supreme court decision, the White House said it would bring in a new 15% charge on all imports under a different law.
The suit, led by Letitia James, the New York attorney general, argues that the US president does not have the authority to impose the new tariffs, and demands states be refunded for extra costs.
“Once again, President Trump is ignoring the law and the constitution to effectively raise taxes on consumers and small businesses,” James said.
Reuters contributed to this report
