The Refunds Were Working. Then DOJ Pulled the Cord.

As recently as May 12, the tariff refund system was doing what it was supposed to do. Real money hitting real bank accounts. U.S. Customs and Border Protection reported that applications totaling $85 billion — more than half of the estimated $166 billion owed — had been accepted for processing as of May 22, according to a CBP legal filing reported by the New York Post. CBP had directed Treasury to issue $20.6 billion in refunds.

Then, on Friday, the Department of Justice filed to block it.

DOJ lawyers informed Judge Richard K. Eaton of the U.S. Court of International Trade that the administration intends to appeal his order — the one requiring the government to refund every importer who paid the tariffs, not just the ones who filed lawsuits.

What the Fight Is Actually About

This isn't about whether the tariffs were legal. The Court of International Trade ruled that Trump's use of the International Emergency Economic Powers Act of 1977 (IEEPA) to impose "reciprocal" tariffs on nearly every country was unlawful, and that ruling is the basis for the refund order now being appealed.

The fight now is over who gets their money back.

The administration's position: only businesses that filed individual lawsuits are entitled to refunds. Everyone else — the 330,000 importers who paid the duties but didn't sue — would need to pursue their own legal action.

Judge Eaton's position: "It is undisputed that the remedy for this unlawful collection is for the United States government to refund the unlawfully collected duties." No distinction based on whether plaintiffs hired lawyers.

The Legal Hook DOJ Is Dangling

The administration's appeal hinges on last year's Supreme Court ruling in Trump v. CASA, Inc., which imposed new limits on "universal injunctions" — court orders that apply beyond just the parties who sued.

DOJ lawyers argued Eaton exceeded his authority by extending relief to all importers, not just plaintiffs in existing cases.

But Ilya Somin, a law professor who helped litigate the original IEEPA tariff case alongside the Liberty Justice Center, disputed this in Reason. He argues Trump v. CASA specifically applies to injunctions issued under the Judiciary Act of 1789 — NOT the separate 1980 statute that gives the Court of International Trade its jurisdictional authority. The administration may be using the wrong legal standard.

Somin also noted the administration sat on this argument for nearly three months after Eaton's original March order — long enough to build and partially operate a refund system — before suddenly deciding to appeal.

Real People Already Got Paid. That Could Stop.

Victor Schwartz, owner of V.O.S. Selections and the lead client in the original tariff lawsuit, has already received his refund, according to Somin's reporting in Reason.

He's one of the few. The 330,000 importers who didn't sue are now in legal limbo. If DOJ's appeal succeeds, they would have to file individual lawsuits to recover money the court already determined was illegally taken. According to Somin, that would create a massive legal backlog, cost smaller businesses more in legal fees than they'd recover, and force taxpayers to pay additional interest on delayed refunds.

Judge Eaton Isn't Rolling Over

Eaton has ordered CBP Border Patrol Chief Rodney Scott to appear before the court on June 9 to answer two specific questions: How long will full repayment take, and should the court require the government to accelerate the timeline?

DOJ tried to swap Scott out for deputies, arguing a high-ranking presidential appointee can't be compelled to testify. Eaton rejected the request — he wants Scott himself.

The judge is clearly not interested in watching a bureaucratic delay play out at the expense of 330,000 businesses.

Trump Calls the Courts "Rigged"

President Trump responded to the broader wave of adverse rulings over the weekend by calling the court system "rigged," according to The Hill. He made the comments after both the tariff refund ruling and a separate decision about the Kennedy Center.

The Brennan Center for Justice noted that two federal appeals courts ruled against Trump in the same week — the tariff case AND a Fifth Circuit ruling that Trump's use of the Alien Enemies Act to deport Venezuelan nationals was also illegal. The Fifth Circuit is widely considered the most conservative federal appeals court in the country.

What's At Stake

This case involves a fundamental question about executive power and refunds. The government took $166 billion from American importers under a law the court ruled it had no authority to use. The refund system worked. Businesses got paid. Then DOJ filed to shut it down — betting that most of the 330,000 companies won't bother suing individually to recover their money.

If that strategy succeeds, the $166 billion remains in government hands.