Here’s what the Trump team had to say.
The Trump administration pushed back Friday against a federal court order tied to billions of dollars in tariff refunds, telling judges that the government needs several weeks to build a system capable of handling the enormous task.
Officials say the process could involve tens of millions of refunds totaling more than $166 billion, making it one of the largest financial reversals in modern trade history.
The dispute follows a recent Supreme Court ruling that struck down President Donald Trump’s use of emergency powers to impose sweeping tariffs on foreign imports.
Now the administration says federal agencies simply cannot process the refunds overnight.
Trump Administration Says Refund System Will Take Time
In a declaration submitted to the U.S. Court of International Trade, a senior official with U.S. Customs and Border Protection (CBP) said the agency needs roughly six weeks to design an automated refund system.
According to the official, the government is currently facing the possibility of about 53 million refunds to companies that paid tariffs under Trump’s emergency trade policy.
Those refunds could total approximately $166 billion.
The agency warned that attempting to process the refunds manually would consume around four million hours of work, potentially pulling personnel away from their core mission of enforcing U.S. trade laws.
CBP officials described the situation as an “unprecedented” administrative challenge, noting that existing government systems were never designed to handle a project of this size.
Instead, the agency plans to build an automated process to calculate and distribute refunds more efficiently.
Clinton-Appointed Judge Orders Refund Calculations
The update came after Judge Richard Eaton, who was appointed by former President Bill Clinton, issued a brief order outlining how the refund process should begin.
Eaton directed Customs officials to start calculating what importers would have paid if the tariffs had never existed.
Those calculations would eventually determine how much money businesses may receive back.
The judge also clarified that he will have exclusive authority over the cases related to the refunds, which stem from more than 1,000 lawsuits filed by companies challenging the tariffs.
Eaton wrote that the court’s chief judge had designated him as the only judge who would handle disputes involving the refund of duties imposed under the emergency law.
Supreme Court Blocks Emergency Tariff Authority
The controversy stems from tariffs President Trump imposed last year under the International Emergency Economic Powers Act (IEEPA).
That law, passed in 1977, allows presidents to regulate financial transactions after declaring a national emergency related to foreign threats.
Trump used the law to impose tariffs on a broad range of foreign imports, arguing the move was necessary to protect American industries and counter unfair trade practices.
However, in February the Supreme Court ruled 6-3 that the emergency law does not clearly authorize the president to impose tariffs in that way.
The majority concluded that Congress never explicitly granted the executive branch that power under IEEPA.
Because of that decision, companies that paid the tariffs could now be eligible for refunds.
Justice Kavanaugh Warned Refund Process Could Be a “Mess”
Some members of the Supreme Court warned that undoing the tariffs could create enormous complications.
Justice Brett Kavanaugh, writing in dissent, cautioned that the federal government may be forced to refund billions of dollars to importers.
He also pointed out that many companies may have already passed those costs along to consumers.
“As was acknowledged at oral argument, the refund process is likely to be a ‘mess,’” Kavanaugh wrote.
The justice warned the ruling could create major financial and logistical consequences for the U.S. Treasury.
Judge Says Refunds Will Not Cause Chaos
Judge Eaton rejected the idea that the process would create widespread confusion.
During a recent hearing, he argued that government agencies regularly handle refund processes and suggested this case would be no different.
“There is nothing particularly novel about providing refunds,” Eaton said.
He added that he does not expect the process to create the kind of administrative chaos some critics have predicted.
What Happens Next
Judge Eaton is expected to hold a closed-door conference with attorneys involved in the case to discuss how the refund process will move forward.
Meanwhile, the Trump administration says it is working to develop an automated system capable of handling the massive workload.
The outcome could have major financial implications for both the federal government and thousands of American businesses, as courts determine how the refunds will ultimately be calculated and distributed.
For now, the administration says the priority is ensuring the process is handled accurately and efficiently, given the historic scale of the refunds involved.