A federal appeals court has temporarily paused the ruling that declared President Donald Trump's latest global tariffs unlawful, as judges weigh the administration's request to allow officials to continue collecting the levies while the legal fight continues. The US Court of Appeals for the Federal Circuit issued a brief order on Tuesday entering what's known as an administrative stay, setting a fast schedule for both sides to file briefs on the administration's request to leave the tariffs intact while it appeals. The order means importers will continue to pay the 10% tariffs under Trump's use of Section 122 of the Trade Act of 1974 for now, according to Reuters. This unexpected development in U.S. trade policy has sent shockwaves through international markets, with businesses and global markets now facing uncertainty as they manage difficult trade tensions. The appeals court's decision is not a final ruling but temporarily pauses the judgment by the lower court - the Court of International Trade in New York - while the appeals judges consider the US administration's request. The plaintiffs, including the US state of Washington and two companies, now have seven days to respond to the administration's request.
The Trump administration is processing more than $160 billion in tariff refunds for importers following the US Supreme Court's February 20 ruling that President Donald Trump unlawfully used the International Emergency Economic Powers Act (IEEPA) to impose tariffs on goods entering the country. According to reports from Business Standard, the court's 6-3 decision didn't address refunds directly, leaving it to lower courts to determine the process. The scramble for refunds began immediately after the Supreme Court ruling, with importers rushing to file claims for the overturned duties. In separate litigation, a trade court judge has been overseeing efforts by customs authorities to develop a refund process after the US Supreme Court struck down Trump's use of an emergency economic powers law to impose global tariffs. At least two businesses confirmed this week that they had received a partial refund, almost three months after the nation's highest court determined that Mr. Trump did not have the power to enact his original, country-by-country duties without Congress.
The refund process is being handled through a new online government portal designed to handle claims on the $160 billion in duties that were overturned. As reported by Business Standard, Brandon Lord, executive director of trade programs for the Customs and Border Protection's Office of Trade, confirmed that the payments include interest on duties paid across more than 8 million import entries. The Consolidated Administration and Processing of Entries (CAPE) launched on April 20, with 126,000 declarations received as of May 11, of which 87,000 had been validated. According to a customs official's report filed in court on Tuesday, the administration is processing $35.5 billion so far in refunds and interest. The government must return money to about 330,000 importers, federal officials previously estimated, sending back what they paid in taxes. That money must be paid with interest, which is accruing at an estimated rate of about $650 million per month. The court was made aware that CBP is in contact with surety companies regarding their refund claims, while experts advise businesses to examine contracts with foreign suppliers and customers, evaluate supply chain and inventory vulnerabilities, and keep up with future government pronouncements and court rulings.
According to the court filing reported by Business Standard, more than 8.3 million of the accepted entries have been reprocessed to remove IEEPA duties. However, 1,880 consolidated refunds have not yet been sent to Treasury because importers have not provided bank account information. CBP Commissioner Rodney Scott discussed the refund process at a closed court hearing on Tuesday, with the agency instructed to file another update on May 26. The refund process comes at a difficult political moment for Mr. Trump, who arrived in China on Wednesday for high-stakes trade talks. Many large companies, including Costco, have separately sued the government to recoup their tariff payments, while they simultaneously stare down class-action cases brought by angry customers seeking financial relief. The Trump administration had argued in its request to suspend the trade court's ruling that the decision would "severely undermine the President's trade agenda and will destabilise efforts to remedy our longstanding trade deficit," and that there was a risk that tariffs already collected, as well as future duties, could be permanently lost.
As reported by Business Standard, CBP had indicated in earlier court filings that the first phase of the refund program won't be able to accept claims for more than a third of the import entries at issue. The remaining entries have more complicated circumstances, and Customs officials haven't specified a schedule for rolling out future phases of the refund program. Payments for some of the first refund requests started reaching importers earlier than expected, with the agency filing regular updates to the court regarding the program's progress. The final decision might establish a precedent for future presidents to impose tariffs without express congressional consent, while the pause gives stakeholders time to make adjustments amid ongoing uncertainty. The Trump administration may once again be on the hook to return billions of dollars in collected tariffs plus interest to businesses if it loses the related tariff case. The refund process is expected to be extensive, expensive and lengthy, turning what was once a prized windfall for President Trump into a liability on the federal balance sheet.
