US could owe over €110bn in tariff refunds after court rejects Trump delay

US Could Owe Over €110bn in Tariff Refunds After Court Rejects Trump Delay

The Legal Turning Point

A recent decision by the US Court of Appeals for the Federal Circuit has accelerated the process for determining tariff refunds, following the Supreme Court’s pivotal ruling that invalidated President Donald Trump’s trade policies. In a one-page order issued on Monday, the appeals court sent the matter back to the US Court of International Trade (CIT), dismissing the Justice Department’s request for a four-month extension. This move allows the refund process to proceed without further delay, potentially impacting billions in tariffs.

Impact of the Supreme Court Ruling

The 6–3 Supreme Court verdict on 20 February declared the International Emergency Economic Powers Act (IEEPA) of 1977 insufficient for granting the president authority to levy tariffs. This ruling nullified broad trade measures introduced in 2025, including a 10% baseline tariff on goods from most US trading partners, as well as higher rates for specific imports from Canada, Mexico, and China. These reciprocal tariffs were suspended immediately after the decision, halting collections from 24 February.

The CIT now faces the task of establishing a framework for managing what could be the most extensive tariff refund process in US history. While the administration has expressed willingness to issue refunds, President Trump warned that the process could span several years, possibly extending to five. Delays would incur substantial interest costs for the Treasury, though the exact timeline remains unclear.

Global Trade Implications

The ruling has sparked a surge in legal action, with over 2,000 importers already filing claims at the CIT. Many of these suits stem from “tag-along” strategies, where businesses transfer pending cases between courts to secure relief before deadlines expire. The litigation reflects a race against time, as importers strive to reclaim duties they could not fully transfer to customers.

Initially, the challenge was spearheaded by Learning Resources, an educational toy company. A coalition of small importers later urged the Federal Circuit to expedite proceedings, leading to broader involvement from major firms such as FedEx, Revlon, Costco, and Reebok. Legal teams are working intensively to navigate the complexities of this unprecedented case, coordinating on documentation and distribution logistics.

EU’s Mixed Response

“The US Supreme Court’s ruling affirms checks and balances, yet clarity in transatlantic trade is still essential,” said a spokesperson for the European Commission.

Although the EU gains indirect advantages from the decision, no automatic financial compensation is guaranteed. EU exports faced increased costs due to the now-invalidated reciprocal tariffs, but any refunds will benefit only US importers, not European firms or governments. Companies that absorbed tariffs or lost sales during the period may see indirect benefits if importers pass on savings through reduced prices or improved terms.

Following the ruling, the administration swiftly introduced a new 10% tariff under Section 122 of the Trade Act of 1974, hinting at potential increases to 15% for 150 days. This development signals ongoing efforts to adjust trade policies despite the legal setback. The path forward remains uncertain, with the CIT poised to play a critical role in shaping the refund process.