The U.S. International Trade Court orders the Trump administration to refund IEEPA tariffs. Thousands of importers, including COST.US, are expected to receive refunds.

The U.S. International Trade Court ruled on Wednesday that U.S. Customs and Border Protection must refund tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). The case was brought by auto parts manufacturer Atmus Filtration Technologies (ATMU.US). This decision is expected to speed up the refund process for companies that paid these tariffs over the past year, benefiting large retailers like Costco (COST.US), logistics giants like FedEx (FDX.US), and many small businesses under pressure from rising import costs.

This ruling comes after the U.S. Supreme Court previously determined that most tariffs imposed by the Trump administration under the IEEPA were unlawful. The Supreme Court delegated the issue of refunds to the U.S. International Trade Court, which has exclusive jurisdiction.

The Trump administration expressed dissatisfaction with the ruling and is exploring new legal avenues to continue imposing tariffs on imported goods. Officials previously stated that if they are forced to refund the tariffs already collected, the process would be “extremely complex.”

Judge Richard Eaton, who issued the ruling, stated that cases related to IEEPA tariff refunds will be handled solely by him. Scott Lincicome, Vice President of Economic Policy at the Cato Institute, described the judge’s order as “surprisingly simple,” requiring refunds to all importers and to be completed quickly. He noted that this ruling is “like a heavy bomb” on the market.

International trade attorney Doug Jacobson said the order means tariffs paid since late April last year under the IEEPA should be refunded. According to estimates from the University of Pennsylvania’s Wharton School’s budget model, U.S. Customs previously collected about $175 billion through IEEPA tariffs, which now need to be refunded to importers along with interest.

Rick Woldenberg, CEO of Learning Resources, an educational products company involved in the Supreme Court case, welcomed the ruling. He said it was “swift, clear, and decisive,” reaffirming the rule of law and providing clear guidance for companies bearing the costs of illegal tariffs.

Typically, when goods enter the U.S., importers must prepay tariffs, and Customs usually has 314 days in a process called “liquidation” to finalize the tax amount. Jacobson pointed out that the court’s order applies to tariffs that have not yet been liquidated, covering most tariffs imposed after the Trump administration’s April 2022 tariffs under the IEEPA.

While the scope of the order may still be subject to interpretation, legal experts generally believe that even tariffs already liquidated before late April could be subject to refund.

Additionally, the ruling means importers can receive refunds without filing individual lawsuits. Previously, companies like Costco, FedEx, and Toyota (TM.US) had filed lawsuits over tariffs. Jacobson said that more than 2,000 related cases pending in the International Trade Court are expected to be resolved collectively due to this ruling. Lincicome called this “a victory for many small businesses that lack resources to litigate.”

Ideally, U.S. Customs and Border Protection could automatically refund tariffs through its already digitized customs clearance system. Industry insiders believe that if the government acts quickly, companies could receive refunds within months.

However, some legal experts expect the government might try to delay enforcement. Ryan Majerus, a former U.S. Trade Representative official now at King & Spalding, said the government might seek a stay or extension of the implementation period. Lincicome also suggested that the government could delay refunds through appeals or by increasing customs review procedures.

In a separate document filed with the court, the U.S. government confirmed it will pay interest on refunds. A report released this week by the Cato Institute estimates that if the government delays refunds, interest costs could increase by about $700 million for each month of delay.

The White House has not yet commented on the ruling. Officials previously stated they plan to re-establish a similar tariff mechanism through other legal channels. Currently, the U.S. imposes a 10% tariff on global imports under Section 122 of the Trade Act of 1974, which allows tariffs to last up to 150 days. White House officials also revealed this week that they are considering raising this rate to 15%.

Due to the uncertainty surrounding the refund timeline, market participants advise investors not to prematurely include potential refunds in their financial forecasts. For example, American fashion brand Aéropostale (ANF.US) did not factor in any potential tariff refunds in its fiscal 2026 guidance released on Wednesday.

Furthermore, even if some companies receive refunds, they may choose not to retain the full amount as profit but instead return it to consumers who paid additional fees earlier, to avoid class-action lawsuits. International trade attorney Laura Siegel Rabinowitz noted that FedEx was sued last week in federal court by customers demanding refunds of related charges, and the court’s expedited refund order could further accelerate similar lawsuits.