The U.S. Court of International Trade in New York has ordered the government to refund potentially billions in tariffs to importers, stating that these tariffs were unlawfully collected.
Judge Richard Eaton issued the directive on Wednesday on the lawsuit that was initiated by Atmus Filtration Technologies (NYSE:ATMUS), which argued it had paid around $11 million in illegal tariffs.
The case filed by Atmus Filtration is one among nearly 2,000 lodged with the trade court, all demanding tariff refunds under the International Emergency Economic Powers Act (IEEPA).
Judge Eaton ordered the Customs and Border Protection (CBP) to calculate the cost of importing millions of shipments into the U.S. without imposing a tariff. He further directed that the refunds be made with interest. “Customs knows how to do this,” Judge Eaton said during the court hearing.
A hearing has been scheduled for Friday to receive updates on CBP’s refund plans. CBP had earlier said that determining entry costs without applying tariffs was “unprecedented” in scale and could require the manual review of more than 70 million entries.
Refund Delay Could Cost Taxpayers
This ruling comes on the heels of last week’s federal court’s rejection of the Trump administration’s bid to delay the refund of tariffs. Lawyers stated in a court filing, “Nothing about the refund issue warrants any delay in issuing this Court’s mandate, let alone a staggering three months’ delay,” adding, “the proper time to issue the mandate is now.”
Meanwhile, a Cato Institute report, released on Monday, said the $175 billion in tariff revenue held by the U.S. Treasury is accruing interest, adding that if refunds to importers are delayed, taxpayers would likely have to bear the cost of about $700 million per month.
Under rules from U.S. Customs and Border Protection (CBP), illegal or excess tariff payments must be refunded with interest, which compounds daily at 4.5% annually for overpayments above $10,000 and 6% for smaller amounts.
However, it remains unclear whether consumers will benefit, as there is no government data on how much of the tariff costs companies have passed on to them.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Image via Shutterstock
Recent Comments