When the US Supreme Court struck down Donald Trump’s sweeping tariffs on American trading partners on Friday (February 20), it did not specify how the US would go about issuing an estimated $175 billion in refunds to importers.In a dissenting opinion, Justice Brett Kavanaugh, a Trump appointee, warned that the refund process would likely be a “mess”. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers,” he wrote, adding that “refunds of billions of dollars would have significant consequences for the U.S. Treasury.”This has also been a point of contention repeatedly raised by the Trump administration, with the President himself criticising the court for both its ruling and this omission at a press conference on Friday. He subsequently unveiled a fresh set of duties under a different law.Also in Explained | What are Section 122 tariffs and how will they differ from Trump’s earlier tariffs?Treasury Secretary Scott Bessent, who previously acknowledged that an adverse court ruling would mean refunds for importers, has pointed to the lower courts for the way forward. He told CNN on Sunday that a decision on refunds could be “weeks or months away”, adding “that decision was not rendered on Friday.”On Monday (February 23), shipping conglomerate FedEx became the first company to sue the Trump administration for a “full refund” of duties paid, after the Supreme Court ruling. Other companies are expected to follow and file suits in the US Court of International Trade (CIT), which has exclusive authority to rule on matters concerning customs and tariff decisions.There is concern that the refund process would prove to be protracted and cumbersome, especially for small importers “that lack the resources to litigate tariff refund claims, yet never did anything wrong,” according to Scott Lincicome, vice president of general economics at the Cato Institute.Here is what to know.The US Customs and Border Protection (CBP) is entrusted with enforcing the regulations at the country’s 330 entry points under the Treasury Secretary’s directive. Every importer posts a bond with the CBP and pays an estimated tariff on their consignment. The tariff revenue collected is thus deposited in the Treasury Department’s General Fund.Story continues below this adIf the CBP rules that goods arriving in the US were ‘transshipped’, meaning they were transported through a country with a relatively favourable tariff rate, those will be subjected to a 40% tax and additional penalties.The government makes a final determination of the tariffs on these goods through a process called liquidation, usually 314 days after the goods have entered the US. Any excess payments will be refunded, or the importer will be charged the shortfall.Politico reported in December 2025 that ahead of the Supreme Court verdict, the Trump administration had accelerated the process of depositing the money collected from tariffs. This prompted a flurry of lawsuits from retailers in the CIT seeking to delay the process of determining final tariff payments.So, how would a tariff refund be initiated?According to court filings, the Department of Justice (DoJ) said that refunds would be initiated if the tariffs were deemed unlawful. The CBP would process these through its Automated Commercial Environment System.Story continues below this adIn December, the CIT ruled that it had the authority to reopen final tariff determinations and hold the government to account on refunds. Thus, importers would need to file suits in the CIT for refunds individually, which they can legally do for up to two years under US trade law. It is unclear whether a class action lawsuit could be brought against the Trump administration to cover the wide range of companies affected by the tariffs.Even as major industry groups pressure the Trump administration to issue refunds, the DoJ has tasked the CIT with establishing a steering committee to coordinate over 1,000 pending refund-related cases.Also Read | Despite US tariffs hike to 15%, most countries better off: Where India, others standSmall importers would be disproportionately affected since legal recourse would prove to be more expensive than continuing their current operations.How much is owed as refunds?According to an analysis by the think tank Penn Wharton Budget Model, over $175 billion would be subject to potential refunds following the Supreme Court ruling. The Yale Budget Lab has estimated that the US collected over $142 billion in IEEPA-related tariffs in 2025, slightly higher than the CBP’s estimate of $133.5 billion until mid-December 2025.Story continues below this adImporters are also looking to recoup the amounts they had deposited as customs or surety bonds with the CBP. These bonds guarantee payment of duties and taxes on the imported goods, and are typically issued 30 days before the consignment arrives in the US. The evolving nature of Trump’s tariffs has meant that the value of these bonds and linked collateral has also soared. Global shipping company Western Overseas Corporation estimated in November 2025 that there was a 526% increase in bond insufficiency notices, with existing bonds no longer covering the duties owed.Will the process be messy and delayed?Despite the Trump administration’s claims, the actual process of refunding the money should not be complicated. Importers have noted that the Customs paperwork, specifically the Entry Summary form, clearly details the tariffs they pay on the goods brought into the US. Importers would need to file a protest against their liquidated entries using the Entry Summary form, which directly links each shipment to the duties paid. However, the sheer volume of such forms with hundreds of thousands of importers would likely draw out the refunds over the next 12-18 months in processing time.Also Read | India-US trade deal: Why a ‘modify commitments’ clause in framework agreement offers New Delhi wriggle roomThe Trump administration would likely be the major impediment to a smooth refund process, with Bessent telling the Supreme Court that unwinding refunds — which he put at $750 billion to $1 trillion — could cause “significant disruption”. The Executive Order revoking the IEEPA tariffs also used deliberately vague language on the timeline – “as soon as practicable”.On Sunday night, the CBP amended its Cargo Systems Management Service to remove the IEEPA tariffs effective Tuesday midnight Eastern Time (February 24), meaning importers continued to report and pay the invalidated tariffs four days after the ruling.Is there a precedent for a refund?Story continues below this adA 1986 harbour maintenance tax enacted by Congress was ruled partially unconstitutional by the Supreme Court in 1998. The CIT then oversaw a refund process involving over 100,000 claimants, according to a Reuters report.More recently, in 2018, the Generalised System of Preference duties lapsed and were retroactively renewed. The CBP then automatically refunded the duties to individual importers without any need for action. However, the scale of duties under question now and the administration’s lack of cooperation will likely make the refund process difficult.Finally, what does this mean for US consumers?Even as importers now wage a battle for tariff refunds, the American consumer need not expect to see any money in their accounts as refunds.An analysis by the Germany-based Kiel Institute for the World Economy, published in January, showed that the tariff burden was effectively a distorted consumption tax on Americans, with 96% of the bill being footed by American consumers and importers. The report showed that exporters in foreign countries did not absorb the tariffs into their prices, but merely lowered their export volumes. This means the additional customs revenue came almost entirely from the wallets of domestic consumers. “Every dollar of tariff revenue represents a dollar extracted from American businesses and households,” the study says.Story continues below this adHowever, it is extremely unlikely that the end-consumer would be compensated for their troubles. The tariffs and duties are marked to the Importer of Record, the entity recognised by CBP as having paid the tax. The issue of traceability also poses a challenge to issuing refunds, given that the tariffs would be marked into the retail price, and the actual division per item would be cumbersome.