This article first appeared in our sister publication Shop Eat Surf Outdoor (SESO)
Key Takeaways:
- The Supreme Court’s Feb. 20 ruling struck down emergency IEEPA tariffs, potentially opening the door to significant tariff refunds for U.S. importers.
- A March 4 court order covers approximately 330,000 importers and does not require individual lawsuits to qualify for repayment.
- The government must return the full amount of illegal tariffs paid, plus interest, and U.S. Customs and Border Protection (CBP) is building out the infrastructure to process an estimated $166 billion to $175 billion in refunds within 45 days.
- Refunds will only be issued via ACH bank transfer, yet only 6% of eligible importers have completed the required setup.
- Smaller brands face unique challenges: legal fees make individual lawsuits unviable, and many are focused on documentation and advocacy instead.
Brand and retail executives who have spent the last year managing record-high import costs may be on the verge of a significant financial reprieve. Following the Supreme Court’s Feb. 20 decision striking down emergency IEEPA tariffs, a subsequent court mandate has potentially cleared the way for substantial tariff refunds, though the path from legal victory to actual payment remains complicated.
Another reason for optimism: U.S. Customs and Border Protection (CBP) said in a court filing Friday that it is preparing to build out the infrastructure needed to process tariff refunds.
Court Orders Tariff Refunds for All 330,000 Importers
On March 4, Judge Richard Eaton of the U.S. Court of International Trade issued a sweeping order that could affect every importer in the country. According to Reuters, the ruling covers approximately 330,000 importers. Critically, it does not require each company to have filed an individual lawsuit to qualify for repayment.
Under the order, the government is legally obligated to return the full amount of the illegal tariffs paid, plus interest accrued during the time the funds were held. CBP has also been directed to “liquidate” or “reliquidate” entries to strip out the illegal charges, effectively correcting import records to trigger a tariff refund, according to publications by several law firms.
Outdoor and Surf Brands Could Receive Tariff Refunds
Many outdoor and surf brand executives are closely watching the potential refund process unfold and are ready to act.
“We’ve been closely monitoring the legal developments and working with our customs broker to track which of our imports may qualify for refunds,” Cassie Abel, founder and CEO of Wild Rye, told SESO.
“For small businesses like ours, the key right now is making sure our entries are properly documented and that any shipments still within the protest or reliquidation window are carefully tracked,” she added. “We’re also working with trade advisors to understand whether additional filings may be required on our end. The process is still evolving, so a lot of it involves careful monitoring and coordination with our broker and industry organizations like the Outdoor Industry Association.”
Leaders at Jetty are also working to get their records in order to take advantage of potential refunds: “While the potential tariff refunds are good news, they were also served up with a good old-fashioned helping of more uncertainty,” Jetty CEO Jeremy DeFilippis told SESO. “We’re anxious to be educated on how the refund process will work, and in the meantime, we’re organizing our purchase orders from the last year to drill down on what is eligible and whether we’ll be applying directly versus through our vendors who are often the Importer of Record.”
Filing Tariff Refund Lawsuits Not Feasible for Many Brands
While major corporations including FedEx, Costco, Ford and Tesla have filed thousands of lawsuits in the U.S. Court of International Trade seeking billions of dollars in tariff refunds, smaller brands and retailers say they do not have the money to pay for extensive legal fees.
“Independent legal action is expensive and requires cash that we simply don’t have in excess right now,” Abel of Wild Rye said. “For most small businesses, the cost of federal trade litigation is out of reach.”
Instead, she’s focused on advocacy, including spending time in Washington, D.C., speaking with lawmakers and supporting broader industry efforts pushing for relief for small businesses.
“Our goal has always been to help policymakers understand how deeply policies like this affect small companies,” Abel said.
Joey Santley, co-founder and co-CEO of I-SEA, said his company also does not plan to file a lawsuit to recoup tariff costs: “Suing the U.S. government is not an option for us as it is expensive, time consuming and more difficult than just using existing structures that are in place, which is what we are doing,” he said.
Still, many legal experts are advising companies to file their own protective lawsuits. The core concern is that the Trump administration could still appeal the ruling, and a higher court may determine that only active litigants are entitled to payment.
Filing an individual suit also helps companies “toll,” or pause, the statute of limitations, a step that firms including Sandler, Travis & Rosenberg say is necessary to ensure older refund claims are not lost if the administrative process stalls. Law firm Mowry & Grimson has also said that individual suits can provide a more direct legal path to ensuring interest is calculated correctly for specific entries.
CBP Prepares a 45-Day Refund Processing Window
On the administrative side, CBP is preparing to build out the infrastructure needed to process what Reuters estimates to be between $166 billion and $175 billion in refunds.
In a March 6 court filing reported by Reuters, Brandon Lord, a senior CBP official, stated that the agency is developing a system that will be ready within 45 days. Lord added that the process will require “minimal submission from importers,” with the goal of making repayment as automated as possible.
ACH Banking Setup Now Mandatory for Tariff Refund Eligibility
For finance teams, one of the most urgent takeaways from the ruling involves how refunds will actually be paid. As of Feb. 6, a new federal rule requires that all refunds be sent via Automated Clearing House (ACH) directly to a U.S. bank account, according to CBP.gov. Paper checks are no longer being issued.
If a company is not correctly set up for ACH refunds inside the ACE Secure Data Portal, the refund will be rejected. According to logistics company Mohawk Global, a rejected refund due to missing banking information means the company forfeits its right to collect interest on that payment.
The scale of the problem is significant. In a sworn declaration filed with the court on March 6, CBP’s Brandon Lord stated that while 330,566 importers are owed IEEPA refunds, only 21,423 — roughly 6% — have completed the necessary ACH setup, according to reporting by EY Tax News and Reuters. That leaves 94% of affected companies currently at risk of having their refunds rejected.
The Tariff Drain on Companies – Financial, Operational and Psychological
Abel of Wild Rye said the resource drain from navigating the ever-changing tariff landscape has been significant: “Financially, tariffs forced us to absorb hundreds of thousands of dollars in unexpected cost,” she said. “For a small brand, that kind of hit directly affects hiring plans, marketing investment, and product development.
“Operationally, the amount of time we’ve spent navigating tariff changes, evaluating counter-sourcing options, and modeling different supply chain scenarios has been enormous,” added Abel. “Instead of focusing purely on growth, we’ve had to dedicate leadership time to risk management and contingency planning. We’ve also had to run constant price analyses, communicate and renegotiate pricing with retailers and manage order reductions that came because of necessary price increases. Even with strong partnerships, those conversations take time and energy.”
But there is a recent bright spot she is celebrating after the Supreme Court ruling.
“We were lucky enough to have at least one shipment land within the section 122 transit exemption window and after IEEPA tariffs were removed,” Abel said. “So, we’re going to celebrate that small win!”
