Companies prepare — as best they can — for possible tariff refunds

Companies are jostling for position in case the Supreme Court forces the Trump administration to refund billions in tariff revenue it has collected this year.

But they are doing so without clarity on the best approach and amid plenty of uncertainty about whether any decision to invalidate Trump’s signature “blanket” tariffs and demand the money be paid back is even in the offing.

“We just don’t know how this one’s gonna shake out,” Erik Smithweiss, a partner focused on an array of trade issues at the firm of GDLSK, noted in between calls with clients this past week.

He described the preparations underway as about getting ready for multiple scenarios.

“We’re really talking about belts and suspenders,” he said.

These business-world preparations include preemptive lawsuits against the Trump administration, preparing petitions to the US Customs Department, as well as simply double-checking bills to make sure they know exactly what they paid.

All to secure a spot in a tariff refund line that may or may not ever queue up.

A demonstrator holds up a sign reading — A demonstrator holds up a sign outside the US Supreme Court in Washington in November as the court heard arguments on whether a wide swath of Donald Trump’s tariffs are lawful. (MANDEL NGAN/AFP via Getty Images) · MANDEL NGAN via Getty Images

The work began in earnest after Supreme Court arguments in early November saw swing justices pose skeptical questions about the president’s defense of his tariffs powers.

At stake across the US economy is revenue in the neighborhood of $100 billion. The US government has collected over $200 billion in duties since the start of the year, and the Tax Foundations estimates that about 55% of that revenue is coming through the specific tariffs facing legal peril.

The Supreme Court case concerns whether a 1977 law called the International Emergency Economic Powers Act (IEEPA) empowers the president to impose tariffs.

Other tariff powers, like so-called Section 232 and Section 301 duties that also bring in significant revenue, are not on the court’s docket.

Costco (COST) made headlines this past week when it became the biggest name yet to join a fast-growing list of businesses suing the Trump administration in order to ensure their future eligibility for refunds.

The lawsuit called Trump’s IEEPA tariffs “unlawfully collected.” The company told a federal trade court it “seeks relief from the impending liquidations to ensure that its right to a complete refund is not jeopardized.”

CHICAGO, ILLINOIS - DECEMBER 02: Customers walk in the parking lot outside a Costco store on December 02, 2025 in Chicago, Illinois. Costco is suing the Trump administration for a refund of tariffs the company alleges were improperly imposed by President Trump. The company contends that only Congress has the power to impose tariffs. (Photo by Scott Olson/Getty Images) — Customers are seen outside a Costco store on December 2 in Chicago. (Scott Olson/Getty Images) · Scott Olson via Getty Images

Similar lawsuits have reportedly been filed by a range of other brand names, from Revlon to Ray-Ban to Kawasaki to Bumble Bee Foods.

In the trade context, ‘liquidations’ refers to when a final calculation of tariffs owed on an imported good is made. This process is required to be done within a year of the duty first being levied but generally happens sooner, at about the 10 to 11 month range.

That means the liquidation deadline is fast approaching for many tariffs levied soon after Trump took office. Businesses are worried that this final stamp on their early IEEPA tariffs could leave them facing a more difficult challenge in getting a refund later on.

Some companies, like Costco, have gone the litigation route to stop liquidation, but it’s far from the only option. Others — especially smaller companies — appear to be gravitating toward petitions with the US Customs Department.

This is another process, formally called a protest, to contest unfairly collected tariffs. It can theoretically be used even after a tariff is liquidated to remedy everything from clerical errors to illegal tariffs.

FILE - President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House, on April 2, 2025, in Washington. (AP Photo/Mark Schiefelbein, File) — President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House, on April 2 in Washington. (AP Photo/Mark Schiefelbein, File) · ASSOCIATED PRESS

Ted Murphy, an international trade lawyer at the law firm of Sidley Austin, has been sending messages to clients on actions that companies can take. He recommends first saving records of exactly what tariffs were paid while also considering the protest route, perhaps even preemptively.

“Importers have to remember that refunds almost certainly will NOT be automatic,” he said in a note to Yahoo Finance. “Importers will have to take some action to obtain a refund, and should be taking steps now to protect their rights.”

The Supreme Court is still deliberating and may not make its final decision until 2026, but the arguments in early November already featured a discussion of what possible refunds could entail.

“It seems to me like it could be a mess,” Justice Amy Coney Barrett said.

“We don’t deny that it’s difficult,” lawyer Neal Katyal, representing the companies trying to get tariffs struck down, offered in response, suggesting that in his view companies outside of the five that brought that suit may need to take action. “There’s got to be an administrative protest.”

He also noted that refund cases in recent history have proved difficult and lengthy.

Attorney Neal Katyal speaks to reporters outside the Supreme Court on Wednesday, Nov. 5, 2025, in Washington. (AP Photo/Mark Schiefelbein) — Attorney Neal Katyal speaks to reporters outside the Supreme Court on Nov. 5. (AP Photo/Mark Schiefelbein) · ASSOCIATED PRESS

It all comes as there is little sense that the Trump administration will make a refund process easy if the court forces its hand.

Smithweiss raised the possibility that the Trump’s team’s response in the face of a negative ruling will be an edict “to fight tooth and nail and don’t give the money back unless the judge tells you that you absolutely have to.”

“That’s what we all anticipate,” he said.

Trump himself has often said that the US would face an “economic disaster” if the court rules against his tariffs, and his aides have often dodged questions about the consequences of a negative ruling.

In an interview with CNBC this past week, Commerce Secretary Howard Lutnick was asked about Costco’s lawsuit. He responded that “if someone is getting in line saying. ‘If, if, if, if, I’d like some money,’ I get it, but it’s not going to happen.”

He quickly added, “We will have tariffs no matter what going forward.”

Ben Werschkul is a Washington correspondent for Yahoo Finance.

Click here for political news related to business and money policies that will shape tomorrow’s stock prices

Read the latest financial and business news from Yahoo Finance

Source link