Awaiting refunds on struck Trump tariffs? Here's what officials, precedent and legal experts say can happen…

The Supreme Court of the United States (SCOTUS) on 20 February struck down Donald Trump's global tariffs, ruling that the American President overextended his authority under IEEPA. Hours later Trump re-imposed a 10% tariff under Section 122, and a day later increased this to 15%.

The International Emergency Economic Powers Act (IEEPA) of 1977 is a national emergency law. And Section 122 of the 1974 Trade Act allows for a temporary import surcharge (up to 15%) for 150 days to address balance-of-payments deficits. Beyond the five-month period however, Trump requires Congressional approval to continue imposing the duties.

Notably, the SCOTUS verdict also opened a path for refund claims worth over $175 billion on the more than $133 billion collected in tariffs so far. However, the court chose to leave this aspect unanswered, and Trump officials said they are awaiting direction even while companies, including Costco and Revlon, line up for possible tariff refunds.

In its verdict, the court did not specify measures of processes for tariff refunds. A point that Justice Brett Kavanaugh, in his dissent, warned could create complications.

“The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. As was acknowledged at oral argument, the refund process is likely to be a ‘mess’,” Kavanaugh wrote.

Speaking to reporters after the verdict, Trump also indicated that the case may take years to be resolved. “I guess it has to get litigated for the next two years. We’ll end up being in court for the next five years," he stated, according to an AP report.

US Trade Representative Jamieson Greer told reporters they would wait for the court order, as per the AP report. “So, it’s a matter for the courts. They created the situation, and we’ll follow whatever they say to do,” he said.

Bessent echoed a similar voice. “I’m not going to get out ahead of the court. We will follow the court’s direction. But as I said that could be weeks or months away. That decision was not rendered on Friday,” he told CNN on 22 February.

"It’s going to be a bumpy ride for a while. The amount of money is substantial. The courts are going to have a hard time. Importers are going to have a hard time. Still it’s going to be really difficult not to have some sort of refund option given how decisively the Supreme Court repudiated Trump’s tariffs,” trade lawyer Joyce Adetutu, a partner at the Vinson & Elkins law firm told the agency.

Trade lawyer Dave Townsend, a partner with the law firm Dorsey & Whitney told AP the Customs agency already has refund processes in place for instances where importers can prove error; and may develop this for the IEEPA tariff refunds.

Another precedent is from the 1990s, when the courts held a harbor maintenance fee on exports as unconstitutional and set up a system for exporters to apply for refunds, the report added.

But Adetutu warned the government has no incentive to speed up its process and could take its time sorting the issue. “The government is well-positioned to make this as difficult as possible for importers. I can see a world where they push as much responsibility as possible onto the importer — maybe forcing them to go to court to seek the refunds," she told AP.

Illinois Gov. JB Pritzker, a Democrat and Trump antagonist, is demanding a refund on behalf of his state's 5.11 million households. In a letter addressed to Trump and released by Pritzker's gubernatorial campaign, the governor said the tariffs had cost each Illinois household $1,700 — or $8.7 billion. Pritzker said failure to pay will elicit "further action.''

Nevada Treasurer Zach Conine submitted a payment request to the federal government for $2.1 billion to recoup the costs of the tariffs, his office announced Friday.

“As Nevada’s chief investment officer, I have a responsibility to try to recoup every single dollar that the Trump Administration takes from Nevada families," Conine said in a statement.

(With inputs from AP, Agencies)