By Luc Cohen and Tom Hals
NEW YORK, June 9 (Reuters) – A U.S. trade judge on Tuesday urged Trump administration officials to speed up refunds of more than $10 billion in revenue from tariffs that were collected and later deemed illegal by the Supreme Court, but stopped short of issuing a new order compelling them to do so.
Judge Richard Eaton of the Manhattan-based Court of International Trade said the delay in processing some claims was leading to a “growing inequity” between large importers who hired customs brokers to help them navigate a government system for seeking refunds, and smaller businesses which had not.
Eaton called the inequity an “unintended consequence” of how the government set up its system to return the $166 billion in illegal tariffs and said he did not believe the administration was seeking to favor larger importers.
But he said the Trump administration’s decision to appeal his March 4 order requiring the government to refund all tariffs was delaying the payments.
“Time has come to refund all the duties,” said Eaton, an appointee of former Democratic President Bill Clinton. “One way to accomplish this would be for the government to not appeal my order.”
‘WE CAN’T DO IT ALL AT ONCE’
U.S. Customs and Border Protection has said that it has accepted and started processing claims for nearly $90 billion in refunds of what it estimates could be up to $127 billion in so-called Phase 1 refunds, which are the least complicated cases.
Susan Thomas, a CBP official who testified at Tuesday’s hearing, said that $23 billion in refunds have been completed and sent to the Treasury Department for distribution to importers.
At issue in Tuesday’s hearing were more legally complicated and older, so-called liquidated tariffs. An importer typically pays an estimated tariff and around a year later the CBP finalizes the tariff amount, which is called liquidation.
Eaton’s March 4 order required the government to refund liquidated tariffs, but he suspended enforcement of that order to give the government the chance to build a system to process refunds. He called the hearing on Tuesday to evaluate whether to lift that suspension in light of the disparity between large and small importers.
Thomas said CBP planned to move on to refunding liquidated tariffs at a later date.
“We can’t do it all at once,” she said.
But Eaton questioned whether the government truly intended to process those refunds, given its appeal of his March 4 order on the basis that federal judges lack the authority to issue nationwide injunctions.
To circumvent that potential problem, companies have asked Eaton to certify a class of all importers who paid the illegal tariffs. Creating a class of importers could give Eaton a path to issue a single order that would apply to all importers and simplify the refund process without the need for each importer to file a lawsuit.
Eaton did not rule during Tuesday’s hearing on whether to certify the class or to lift the suspension of his March 4 order.
The U.S. Supreme Court struck down tariffs U.S. President Donald Trump imposed under an emergency economic law in February. The Trump administration, which has put tariffs at the center of its trade policy, has since used other legal authorities to impose new tariffs.
(Reporting by Luc Cohen in New York and Tom Hals in Wilmington, Delaware; Editing by Andrea Ricci and Daniel Wallis)
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