Customs to return $120 billion in tariffs to importers in first phase

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(The Center Square) – The federal government is preparing to return an estimated $166 billion in tariff revenue after the U.S. Supreme Court struck down President Donald Trump's sweeping import taxes.

As Customs and Border Protection develops a new system to process the massive payouts, the decision has reignited debate over the future of tariffs in the U.S., with fresh legal challenges already mounting against alternative duties imposed by the president.

U.S. Customs and Border Protection has been developing a refund process for businesses and importers who paid the duties. The trade court judge overseeing the process has requested regular progress reports from officials to ensure timely completion. The agency previously told the court it expects the first phase of the new refund system to be ready by mid-April.

Brandon Lord, executive director of trade programs at Customs and Border Protection, said the four-part refund system is nearing completion, with some components nearly ready and others still in progress.

In the first phase of the refund process, Lord estimated that CBP could process about two-thirds of the refunds. He did not specify the issues delaying the remaining refunds or provide a timeline for when those would be addressed.

More than 26,000 importers have registered with the CBP for electronic refunds as of March 26. Those importers account for 78% of the tariff payments or deposits. Lord estimated the principal amount was about $120 billion.

Earlier this month, Judge Richard Eaton of the Court of International Trade ordered CBP to start processing refunds with its existing system. However, CBP proposed a new process that could accept refund applications as soon as next month and would not require importers to file lawsuits.

The refund update comes nearly a year after Trump rolled out the highest U.S. import taxes in nearly a hundred years in April 2025. On April 2, 2025, which the president dubbed "Liberation Day" for American trade, Trump put tariffs on every U.S. trading partner. Almost immediately, states and small businesses challenged Trump's interpretation of the International Emergency Economic Powers Act. In February, the U.S. Supreme Court struck down the president's tariffs under the 1977 law, dealing a major blow to the second-term Republican's economic agenda.

Even as CBP prepares to issue refunds, Trump has unilaterally reimposed tariffs using alternative legal authorities. Hours after the Supreme Court’s ruling, he invoked Section 122 of the Trade Act of 1974 to impose a 10% tariff on all imports, a move that states and small businesses have already challenged in court.

Trump has proposed using tariff revenue to fund $2,000 rebate checks for most Americans and to boost military spending. He has also suggested that tariffs could eventually help shift the income tax burden away from American households.

Trump has said he wants to use tariffs to restore manufacturing jobs and pay down the national debt.

Trump imposed tariffs to address trade practices around the globe that he said have hurt Americans. The president has said the tariffs could encourage businesses to build U.S. manufacturing capacity to avoid paying tariffs, potentially bringing back manufacturing jobs lost to lower-wage countries in decades past.