US could owe over €110bn in tariff refunds after court rejects Trump delay
US Could Owe Over €110bn in Tariff Refunds After Court Rejects Trump Delay
The US Supreme Court’s 6–3 ruling on February 20th invalidated a key trade policy, sparking concerns over potential refunds for billions in tariffs. A federal appeals court has accelerated the process to determine whether the administration must return over €110bn to importers, following the rejection of a four-month delay requested by the Justice Department. The decision was made in a single-page order by the US Court of Appeals for the Federal Circuit, which sent the case back to the US Court of International Trade (CIT) for resolution.
Supreme Court Ruling and Tariff Measures
The landmark verdict struck down the International Emergency Economic Powers Act (IEEPA) of 1977, undermining President Donald Trump’s authority to impose duties. The ruling nullified tariffs introduced in 2025, which included a 10% “reciprocal” baseline rate on goods from nearly all US trading partners, along with higher levies based on trade deficits and targeted duties such as 25% on certain Canadian and Mexican imports and 10% on Chinese goods. These measures were swiftly suspended after the 24th of February, when collections ceased.
Litigation Surge and Legal Challenges
A wave of legal action has followed the decision, with around 2,000 importers already filing claims at the CIT. The litigation stems from “tag-along” strategies, where businesses transfer pending cases between courts to avoid missing deadlines. Under US customs rules, importers generally have 180 days post-liquidation to protest duties. The initial challenge was led by small businesses like Learning Resources, a toy company, but now major corporations including FedEx, Revlon, Costco, and Reebok have joined the effort.
“The judgment’s silence on refunds while highlighting its broader significance.”
– European Parliament’s research service
EU Impact and Financial Implications
While the EU has welcomed the decision as a reinforcement of trade accountability, it has not received automatic compensation for the costs incurred. EU goods faced reciprocal IEEPA tariffs, which burdened American buyers of machinery, chemicals, vehicles, and luxury items. With those tariffs eliminated, EU exporters benefit from reduced expenses, though refunds will only go to US importers, not to European firms or governments.
The CIT is now tasked with creating a framework for the largest tariff refund initiative in US history. Despite the administration’s prior commitment to issue refunds if tariffs were overturned, President Trump warned of prolonged legal battles, potentially lasting up to five years. Delays could cost the Treasury substantial interest, though the timeline for resolution remains unclear. For importers, successful claims could provide much-needed cash flow relief after duties that were not fully passed on to customers.
Continued Uncertainty and New Measures
Soon after the Supreme Court’s decision, the administration implemented a new 10% tariff on global imports under Section 122 of the Trade Act of 1974. This move suggests the possibility of increasing the rate to 15% for 150 days. The new measures have introduced fresh challenges, as businesses race to secure their claims amid evolving legal and tariff dynamics.