The Supreme Court ruled that President Donald Trump’s global tariffs were illegal, but that’s not going to stop the administration from holding on to the money it’s already collected.
Sources told Politico officials are weighing various ideas, including discouraging companies from demanding refunds, arguing revenue collected previously is retroactively legal under new tariffs, and letting claimants skip to the front of the line if they give up a portion of the funds they’re owed.
The White House did not immediately respond to Fortune’s request for comment.
Last Friday, the top court struck down tariffs invoked under the International Emergency Economic Powers Act, upholding decisions from lower courts. Hours later, Trump announced a fresh set of global levies under a different law as well as investigations that are likely to lead to longer-term duties.
But the Supreme Court didn’t detail a process for refunding tariff revenue, leaving it to the U.S. Court of International Trade to figure out. Meanwhile, there are now about 2,000 refund claims for more than $170 billion in IEEPA tariff revenue.
Treasury Secretary Scott Bessent already signaled the administration’s stance on refunds, telling Fox News last Friday refunds would be the “ultimate corporate welfare.” And speaking at the Economic Club of Dallas in the immediate aftermath of the ruling, he said the issue “could be dragged out for weeks, months, years.”
On the IEEPA revenues, he said: “I got a feeling the American people won’t see it,” though he added days later he will follow the court’s direction on refunds.
And soon after the Supreme Court ruling, Trump predicted refunds will “get litigated for the next two years.”
Trump attempted to use the IEEPA for the first time as a vehicle for imposing tariffs when he unveiled his “Liberation Day” duties last year.
The tariffs were quickly challenged in court. While litigating the case last spring, Justice Department lawyers repeatedly acknowledged that if the tariffs were deemed unlawful, then the government would issue refunds to the plaintiffs.
The DOJ also made those assurances to argue that courts shouldn’t grant plaintiffs emergency relief from the tariffs, and instead let them stand during the legal proceedings.
In a Washington Post op-ed published on Tuesday, the lawyer who argued the case before the high court on behalf of plaintiffs called out the administration for its hesitancy over refunds.
Neal Katyal, a partner at Milbank LLP and former acting U.S. solicitor general in the Obama administration, said judges relied on the government’s suggestion that tariff harm was temporary and repairable.
“The government cannot tell courts that refunds are simple and inevitable when seeking relief—and then imply they are complex and distant when the time comes to pay,” he wrote. “The rule of law does not operate on shifting premises.”
Katyal also pointed out most of the tariff revenue is owed to Americans. In fact, a New York Fed study found U.S. consumers and companies have paid 90% of Trump’s import taxes, despite his claims other countries are shouldering the burden.
Ahead of the Supreme Court decision, companies like Costco that paid the levies filed lawsuits to help ensure they get their money back. And FedEx became the first major company to sue for a full tariff refund with a complaint on Monday in the U.S. Court of International Trade.
The government has paid refunds after similar cases in the past. The Customs and Border Protection agency also has a process in place for refunding duties when importers can prove an error.
But trade lawyer Joyce Adetutu, a partner at the Vinson & Elkins law firm, told the Associated Press: “The government is well positioned to make this as difficult as possible” for importers seeking refunds.
“I can see a world where they push as much responsibility as possible onto the importer,” she added, speculating they may be forced to go to court to get their money back.
