The Trump administration has been given a Thursday deadline to tell the U.S. Court of International Trade how it plans to refund the "emergency" tariffs struck down by the Supreme Court.
President Donald Trump has made tariffs a central tenet of his economic policy, saying that they boost manufacturing in the U.S. and protect jobs. His moves have faced numerous legal challenges during both his first and second terms in the White House.
The nation's top court ruled last month to terminate the bulk of the president's sweeping second-term tariffs on U.S. imports based on the 1977 International Emergency Economic Powers Act (IEEPA), stating that the statute's authority to "regulate importation" does not include the power to impose the levies, especially without clear authorization from Congress.
The ruling did not address how refunds would be addressed, and it remains an open process with many uncertainties -- including when eligible businesses will receive compensation. The decision put about $166 billion in IEEPA tariffs collected at risk, leaving the country in what Justice Brett Kavanaugh called a "mess" in his written dissent in February.
The Trump administration has a 2 p.m. deadline on Thursday to report to the U.S. Court of International Trade (CIT) on its plan to refund IEEPA-based tariff collections.
The deadline was issued by CIT Judge Richard Eaton after Customs and Border Patrol (CBP) told the court last week that it needed 45 days to develop a system capable of processing the refunds, suspending an earlier request that asked CBP for "immediate compliance" with the Supreme Court ruling.
"Customs knows how to do this. They do it every day. They liquidate entries and make refunds," Eaton told a court hearing last week. "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."
But Eaton shifted on Friday after CBP asked for more time citing the limitations of its existing technology, processes and manpower.
In a court filing, CBP said it "is confident that it can develop and implement" an update within its Automated Commercial Environment, which tracks imported goods, "that will streamline and consolidate refunds and interest payments on an importer basis," instead of issuing millions of separate refunds.
"CBP is making all possible efforts to have this new ACE functionality ready for use in 45 days," the agency said. "This new process will require minimal submission from importers."
CBP said the update will save the agency's workforce "over 4 million hours" of work.
If it hits the Thursday deadline, CBP will show how it plans to issue the refunds -- paid with interest -- to more than 330,000 importers, according to the agency's estimates.
The Supreme Court's decision specifically struck down IEEPA-based tariffs and companies that paid these levies alone have the potential to request refunds. For individual businesses, according to Thomson Reuters, "the cash at stake could be significant," and companies could move fast to claim it.
More than 2,000 lawsuits have already been filed with CIT by companies seeking access to the potential refunds, according to POLITICO.
The "short report" which CBP is expected to submit to the court on Thursday will offer more information about how the Trump administration plans to issue refunds. In last week's court filing, CBP said it could begin issuing refunds by late April.
It is possible that the Trump administration could look to create new delays before issuing the refunds, including appealing Eaton's order directing CBP to stop calculating its IEEPA-based tariffs -- a move that could further stall repayments by sending the case to the U.S. Court of Appeals for the Federal Circuit.