Trump fighting to hoard billions from tariffs despite Supreme Court knock-out
President Donald Trump's most aggressive tariffs suffered a knock-out blow from the Supreme Court, but according to Politico, the administration is digging in for a bitter fight to hoard billions in tariff revenue that it should be refunding.
After nearly a year of tariffs causing uncertainty, chaos and runaway inflation, the Supreme Court ruled that the authority under which Trump imposed his most severe and impulsive import taxes was illegal, putting one of his favorite policies in a bind and forcing his administration to begin planning refunds. However, in a report Tuesday morning, Politico revealed that while the Trump administration has processed around half of the $166 billion in tariff refunds it now owes, it is preparing a new legal battle to claim it is "not required to pay all of those duties back."
"Though they are processing refunds for thousands of importers, they are arguing they are doing so voluntarily," the report explained. "And they are digging in on other tariff payments that have already been finalized by the government, which legal experts say could add up to tens of billions of dollars."
“The message from the government is pretty straightforward: we don’t have the authority to issue these refunds, and unless a court orders us to repay a specific company, we’re not going to do it,” an anonymous former Trump administration official and trade lawyer told Politico. “They’re ready to claw back what they know they legally can.”
The Supreme Court's ruling from February did not have anything to say about what should be done with the revenue collected from Trump's tariffs, instead leaving the issue for lower courts to handle. In April, the U.S. Court of International Trade in New York ruled that the administration had to pay back the money it had received from the tariffs shot down by the Supreme Court, and initially, it seemed willing to comply with that order.
"As of May 22, they have approved more than $85 billion in repayments, according to the government’s court filings," Politico explained. "But it is limiting eligibility to specific types of tariff payments, despite growing impatience from the judge. After weeks of increasingly contentious court filings, the Justice Department officially appealed Eaton’s April order last week, arguing the CIT exceeded its authority when it ordered universal refunds, and that the government cannot refund payments that have already been finalized by CBP."
Politico further noted that the final word on the matter now sits with the U.S. Court of Appeals for the Federal Circuit, and spoke to legal experts who suggested that there is reason to believe that Trump will prevail in the fight, given a prior Supreme Court ruling barring federal courts from issuing nationwide injunctions against anyone not party to the lawsuit before them.
“That issue could really go both ways,” James Kim, an international trade partner at ArentFox Schiff, told Politico. "[The] DOJ has good arguments... Despite what Judge [Richard] Eaton [of the CIT] has said on that — it’s going to be interesting to see how this plays out.”
“It was inevitable that the government would appeal [Eaton’s April order requiring universal tariff refunds] and win," Matthew Seligman, founder of Grayhawk Law and a lawyer representing importers seeking tariff refunds, added. "The lasting effect of the universal refund order will be that importers have needlessly been kept in the dark for months about what exactly they need to do to get the refunds to which they are legally entitled."
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