Policy

It has been two weeks since the Supreme Court blocked Donald Trump’s emergency tariffs, but an estimated 300,000 US businesses still have no idea if or when they will receive refunds.

Economists have estimated that more than $175 billion was unlawfully collected, and the US could end up owing substantially more than that the longer the refund process is dragged out, since the US must pay back daily interest on the funds. According to the Cato Institute, a libertarian think tank, a conservative estimate showed that “$700 million in interest is added to the final bill every month that the government delays tariff refunds, or around $23 million per day.”

The US is aware that interest is compounding daily on tariffs, as the Trump administration argued against an injunction that would have temporarily blocked the tariffs much sooner by noting that no one would be harmed, since tariffs would be repaid with interest if deemed unlawful. However, now that the court has ruled against tariffs, the Trump administration seems to be dragging its feet in finding a way to return all the ill-gotten funds.

Ed Brzytwa, vice president of international trade for the Consumer Technology Association (CTA), told Ars that delays seem counter to US interests at this point.

“The government should have an intrinsic interest in providing these new funds as fast as possible, so they don’t owe more interest over time,” Brzytwa said. Providing refunds sooner, he suggested, would be a benefit not only to companies, but also “to their employees, to the US economy, to US consumers, all the above.”

For the tech industry, many popular products have been spared hundreds of billions in tariffs since Trump took office, but, as the CTA documented in repeated court filings, many more products were hit by them. Ahead of midterms, when analysts predict that tariff whipsawing might slow down, tech firms remain uncertain about when to expect refunds, experts told Ars. At a time when firms already feel overwhelmed, they’re also navigating new tariffs that are raising new legal challenges, while risking more supply chain strains as additional threats of tariff-stacking loom.

Refunds should be automated, CTA argued

Pressure is increasing on Trump to deliver refunds faster, however, after US Court of International Trade Judge Richard Eaton ordered universal refunds for all importers who paid Trump’s emergency tariffs on Wednesday. At a hearing that day, Eaton noted that Customs knows how to issue refunds, later ordering that all claims be efficiently resolved, CNBC reported.

Officials from Customs and Border Protection (CBP) are expected to share an update on their proposed refund plans at a hearing Friday in that case, raised by Atmus Filtration, which reportedly paid about $11 million in unlawful tariffs.

In the meantime, the CTA and the Chamber of Commerce (CoC) filed a motion to submit a proposed brief in another tariffs lawsuit outlining what the trade groups believe is the best strategy for handling refunds.

That lawsuit, raised by V.O.S. Selections, is being overseen by a different Court of International Trade judge, Gary Katzmann. The groups are hoping that he may agree with Eaton, who noted at the Wednesday hearing that “the agency should be able to program its system to issue refunds,” CNBC reported. The trade groups’ proposed brief emphasized that “in fact, CBP has already issued refunds for some of those tariffs because they were retroactively reduced by a subsequent trade agreement.”

According to the trade groups, the US government has the technology to streamline—and possibly even automate—tariff refunds.

“They have the technology to do it,” Brzytwa said. “They offer refunds to importers all the time.”

But apparently, the Trump administration so far lacks the will to use it, instead planning to wait for court direction before taking any steps to send the funds back. So now the court must intervene to draft a blueprint that all businesses can use to secure a quick and easy refund, the groups said.

“There is no question that American businesses are now entitled to the return of the billions of dollars they were forced to pay under these unlawful tariffs,” the groups wrote. “The law is clear on that point, and the government has repeatedly stated that it would issue refunds if the tariffs were ultimately deemed invalid.”

If the court requires each business to either litigate their claims or go through “impractical” CBP administrative procedures to request refunds, either the courts or CBP will be overwhelmed, the groups argued. Dealing with the backlog could drag out refunds for years, while the interest accrues and the most vulnerable businesses risk being forced to shut down, they argued.

For many small firms with tight profit margins, the emergency tariffs “have already stretched their resources to the breaking point,” groups wrote.

“Those are the types of companies that need to be prioritized in a refund plan,” Brzytwa said. He suggested the court should require officials to take steps “to help the companies that barely are making it at this point because they paid such steep amounts in tariffs.”

Perhaps even more concerning to the court, for any firms that end up negatively weighing the costs of a lengthy legal battle with the government against likely much smaller tariff refunds, some claims may be abandoned. That would, troublingly, leave taxes collected unlawfully under the International Emergency Economic Powers Act (IEEPA) in the Trump administration’s hands, groups warned.

“There is no need to individually litigate whether particular IEEPA duties were valid—they are all invalid,” the groups wrote. Instead, groups urged the court to “craft an injunction facilitating a streamlined administrative process for plaintiffs in this case to use in obtaining their refunds.” That same process could become “a blueprint for other importers to secure refunds,” they suggested.

Possibly, a “commonsense” court-ordered solution could be easily created to streamline refunds, groups proposed.

“Because the government has tracked the payment of IEEPA tariff duties, it knows who paid them and in what amounts, even without refund-seeking submissions from the affected importers,” the groups said. Later on, they added, “this efficiency is important not only to reduce strain on courts and the government, but to ensure that refunds issue on a defined and predictable timeline. Delay should not become a de facto denial of recovery for importers who paid unlawful tariffs and wish to seek appropriate relief.”

Dallas Dolen—a technology, media, and telecommunications leader for PwC, a leading global professional services network that advises big firms on tax questions—told Ars that he’s also worried that tariff refund fights will drag on for years without a court-ordered pathway to expedite them.

Until courts clarify how the refund process will work, he said that PwC continues to advise companies to “be really organized, be really prepared.” Every business impacted should stop now to assess what tariffs they expect they’re owed and possibly hire staff to ensure they’re prepared to secure a refund when processes are created, PwC advised. That level of preparedness may be critical, since “it’s unlikely the government will write them two checks,” Dolen said.

It may be time for Trump to rethink tariffs

Dolen suggested that consumer technology might be the sector of the tech industry most hurt by tariffs, and even if refunds are automated, alternative tariffs that Trump is threatening to impose could change the calculus on refunds.

According to Dolen, some businesses required to pay new tariffs under Section 122 of the Trade Act of 1974 may instead get a gross refund, possibly subtracting Trump’s latest 10 percent global tariffs from the total of IEEPA tariffs owed.

Perhaps complicating the math further, those new tariffs could increase before refunds are issued. Just yesterday, Treasury Secretary Scott Bessent said that Section 122 tariffs could be raised by another 15 percent this week, The New York Times reported. And over the next five months, the tech industry could be paying tariffs at the same levels as under Trump’s IEEPA tariffs, Bessent has claimed.

However, Trump’s tariffs remain hugely unpopular, even with Republicans. Both experts agreed that Trump will likely be more thoughtful about tariffs ahead of the midterms. And since he’s unlikely to get much support from Congress members focused on reelection, any changes will likely come by executive order. Dolen suggested that Trump’s concerns about inflation from tariffs may make him less willing to impose them.

“Restraint’s probably not the perfect word,” but the president may start exhibiting “a little more contemplation and thoughtfulness,” Dolen suggested.

Brzytwa told Ars that the CTA is also hoping that the back-to-back court rulings might push Trump to rethink his aggressive tariff strategy—especially given that his goals of increasing US manufacturing are not being achieved by them.

“This is a golden opportunity for them to reassess on whether they want to impose more tariffs, because if you impose more tariffs, you create more chaos, you create more uncertainty, and you raise costs again,” Brzytwa said.

Another wrinkle is that the Supreme Court ruling has emboldened critics of Trump’s tariffs. Although Trump and Bessent have postured that the Supreme Court ruling is meaningless, since they have other tariff avenues to explore, those will not replace his prior IEEPA tariffs, Brzytwa said. And the administration already is facing legal pressure that could gut the Section 122 authority to impose tariffs, after 20 states sued Trump to block his next go-to tariff tool.

But Trump seems unlikely to give up tariffs as a source of leverage in negotiations with all of America’s trading partners, and sometimes even in negotiations with US companies. And even if Section 122 tariffs are one day blocked, just as IEEPA tariffs were, Brzytwa told Ars that CTA is “very closely” monitoring additional tariffs that could be imposed under Section 232 of the Trade Expansion Act and Section 301 of the Trade Act of 1974. Those could hit products like semiconductors or critical minerals, as well as any downstream products containing them, perhaps further hurting cash-strapped tech firms stuck feeling fuzzy about what costs or supply chain disruption may come in the near future.