Trump administration will appeal in US court

By Laura Curtis, Zoe Tillman and Eric Larson

But even though the administration has moved forward with that plan, the Justice Department has refused to acknowledge that a judge could use the nationwide power to order CBP to reprocess entries that have already been finalized through a process called liquidation, leaving open the possibility of another legal battle.

“CBP has no authority to seize or return the money without a court order,” the Justice Department said in a court filing Friday.

At the heart of the dispute is whether the judge has the authority to order nationwide refunds for all importers who have paid tariffs issued under the International Emergency Economic Powers Act, or IEEPA, even if they have not filed a lawsuit in trade court.

The US has suggested that the government simply need to return the money to the importers who sued, and the judge’s order is effectively a nationwide injunction barred by a recent Supreme Court decision in the birthright citizenship fight.

The government’s disclosure of its intention to appeal included an objection to a judge’s order that CBP Commissioner Rodney Scott appear in person for a June 9 hearing.

The Justice Department argued that the situation failed to present the “extraordinary circumstances” necessary to compel a high-level official to testify, and said it would appeal that issue as well if the judge refused to change his mind.

Judge Richard Eaton immediately denied the government’s request, writing that he needed Scott’s testimony to understand whether the administration intended to fully refund all tariffs collected to all importers “large and small” who paid.

“This includes $166 billion,” he wrote.

The White House did not immediately respond to a request for comment.

A law firm advising companies said importers should avoid applying to the Court of International Trade for now.

“We advise importers to wait and see before making any filings in the CIT as the statute of limitations will not run until February 2027,” law firm Faegre Drinker Biddle & Reath LLP said in an email alert to clients.

In a 6-3 decision in February, the Supreme Court held that Trump’s use of the IEEPA to impose sweeping global tariffs was unlawful. He was silent on the question of refund; However, the lawsuit has been sent back to the U.S. Court of International Trade in Manhattan to determine next steps.

Eaton was tasked with presiding over thousands of lawsuits that importers filed to recover taxes paid before the Supreme Court decision. He ordered the customs agency to recalculate the tariff amount for all importers who paid the disputed levy, not just the companies that filed the lawsuit. The government has also committed to pay interest on any refund.

There is uncertainty over whether officials will oppose paying the full amount. Eaton has held mostly non-public court hearings to discuss the government’s progress, but he indicated in a public order that there was disagreement over how to handle the tariffs that became final, a process that automatically occurs on a rolling basis.

A customs official had also revealed in court filings that the first phase of the refund portal roll-out would not be able to handle a significant proportion of the import entries at issue, and did not provide a concrete program to expand the capabilities of the system to deal with more complex claims.

Meanwhile, Trump criticized the Supreme Court’s decision and suggested that companies that have not asked for refunds could take political advantage in the future, saying he would “remember them.”

The issue raised by the government in Friday’s filing appears headed for resolution by an appeals court, according to Valerie Sorensen-Clark, who served as CBP’s counsel on the case until last month and is now a partner at the law firm GDLSK LLP in New York.

“This question now appears headed for appellate resolution,” Sorensen-Clark wrote in a LinkedIn post after the DOJ filing. “Regardless of where the courts ultimately land, additional clarity on this issue will benefit importers, CBP, and the trade community alike.”

Separate from the IEEPA legal wrangling, the Trump administration is defending before the trade court a new round of global tariffs that the president imposed under a different law shortly after losing at the Supreme Court.

A three-judge panel declared the policy unlawful. But a federal appeals court temporarily halted that ruling while it considered the government’s request for a longer-term injunction that would allow customs officials to continue collecting the levy as the court battle progresses.