The Trump administration is resisting a court order that requires the government to refund the full $166 billion collected from illegal tariffs, raising the possibility that only some importers will be completely repaid.<\/p>\n
In a series of recent legal maneuvers, the administration has indicated that it could hold up the return of potentially tens of billions in those previously paid duties. The government collected the revenue under a slate of tariffs first enacted by President Trump last year and struck down by the Supreme Court in February.<\/p>\n
The Trump administration has also moved to shield Rodney S. Scott, the top customs official, from testifying at a court hearing scheduled for next week about the tariff refund process. Days after a judge ordered him to submit to questioning, the Justice Department filed a harshly worded emergency appeal, seeking to send someone else in his place.<\/p>\n
The administration\u2019s refusal only infuriated the judge, Richard K. Eaton on the Court of International Trade, who had issued the original order that commenced the tariff refund process. In a sharply worded series of letters, filed Wednesday, Judge Eaton doubled down on his demand for Mr. Scott\u2019s testimony, adding: \u201cThere is $166 billion at stake.\u201d<\/p>\n
The result was a dizzying new round of legal wrangling between the U.S. government and importers, the latest in a year of trade brinkmanship and uncertainty. For many businesses, it remains as unclear as ever if, or when, they will get back the full sums they paid in illegal tariffs, particularly given Mr. Trump\u2019s publicly stated opposition to returning any of the money.<\/p>\n
The fight came as the Trump administration took the first steps toward implementing a new round of tariffs meant to replace those struck down by the Supreme Court, including a proposed tariff of at least 10 percent on more than 80 countries.<\/p>\n
Sara Albrecht, the chair of the Liberty Justice Center, the legal group that represented small businesses in suing over Mr. Trump\u2019s past duties, stressed that it would continue fighting to secure full and easy refunds.<\/p>\n
\u201cAt the end of the day, this money belongs to the businesses that paid it,\u201d she said in a statement. \u201cFor the past year, many small businesses were forced to give effectively all of their working capital to the government supporting their illegal tariff scheme.\u201d<\/p>\n
The fight over refunds began in the spring, after Judge Eaton ordered the Trump administration to begin immediately and fully refunding duties imposed under the International Emergency Economic Powers Act, known as IEEPA. Under law, the refunds must be repaid with interest, which is costing the government millions every day.<\/p>\n
In subsequent court filings, the government revealed<\/a> that the task ahead would be massive and costly. The United States owed money to about 330,000 importers, particularly businesses, representing tariffs paid on about 53 million entries. To handle the expected flood of requests, officials at U.S. Customs and Border Protection raced to stand up a system that could process refunds in bulk, which went online in April<\/a>.<\/p>\n At the time, customs officials said they would focus first on processing claims for certain tariffs, targeting those that had been paid but not finalized before the Supreme Court decision. Tariff payments are computed and settled through a lengthy process, known as liquidation, and the government suggested the possible universe<\/a> of initial refunds could be about $127 billion of the total $166 billion amassed under IEEPA.<\/p>\n But the federal figure only told part of the story. The government also said there were entire categories of imports for which it could not, or would not, immediately and automatically process refund requests. At the time, customs officials offered little indication of how or when it would repay that money. While the administration has not supplied an exact figure to the courts, it could total nearly $40 billion.<\/p>\n That left in limbo many importers, including some businesses whose tariff bills were already paid and finalized. Only in the past week did the government reveal in clear terms<\/a> that it would not proceed these refunds automatically, and that it expected each importer to file its own lawsuit \u2014 on which a judge would have to issue \u201cimporter-specific orders\u201d \u2014 just to get its money back.<\/p>\n The stance appeared to infuriate Judge Eaton, who then ordered Mr. Scott, the commissioner of U.S. Customs and Border Protection, to testify at a hearing on June 9<\/a>. Lawyers for the government later tried to shield Mr. Scott from that unexpected demand, while filing a separate notice that it intended to challenge the court\u2019s original refund order.<\/p>\n The Trump administration has moved to shield Rodney S. Scott, the top customs official, from testifying about the tariff refund process at a court hearing set for next week.Credit…Eric Lee for The New York Times<\/p>\n A spokeswoman for U.S. Customs did not immediately provide a comment.<\/p>\n