Over 1,500 Companies Sue US Government Seeking Billions in Tariff Refunds
Supreme Court's February 20 ruling invalidating IEEPA tariffs triggers unprecedented legal battle over estimated $160-175 billion in duties, as major retailers and small businesses race to secure refunds while administration deploys alternative trade authorities.
More than 1,500 companies have filed lawsuits in the US Court of International Trade seeking refunds after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act, potentially exposing the government to $160-175 billion in claims. The February 20, 2026 decision represents one of the sharpest judicial rebukes of executive trade authority in decades, but leaves the refund process in legal limbo.
According to The Hill, entities affiliated with major brands including Costco, GoPro, Goodyear, and Toyota have joined more than 900 other companies in pursuing refunds, while FedEx became the first major corporation to file suit after the Supreme Court ruling, according to CNBC. Revlon, EssilorLuxottica, Kawasaki, Bumble Bee, and Yokohama Tire have also filed suits, alongside hundreds of smaller firms.
The Legal Architecture of the Challenge
The Supreme Court’s 6-3 decision in Learning Resources, Inc. v. Trump invalidated tariffs imposed under IEEPA—a 1977 emergency powers law—ruling that the statute does not permit the President to impose tariffs, which amount to taxation reserved for Congress. The ruling invalidated “reciprocal” tariffs ranging from 34% for China to a 10% baseline, plus 25% “fentanyl” tariffs on goods from Canada, China, and Mexico, according to NBC News.
Crucially, the decision left intact tariffs imposed under other statutory authorities. Section 232 (national security) tariffs on automobiles, auto parts, steel, aluminum, copper, semiconductors, and timber remain in effect, as do Section 301 tariffs on Chinese imports addressing unfair trade practices, according to industry analysis from SEMA.
More than 1,500 companies filed lawsuits while waiting for the Supreme Court to rule, reports SupplyChainBrain, with many seeking to preserve refund eligibility before customs entries “liquidated”—the 314-day process after which duty amounts become final.
The liquidation timeline created urgency for companies. Under US customs law, importers have 180 days after liquidation to protest, then another 180 days to appeal to the Court of International Trade. Companies filing preemptive suits aimed to suspend liquidation and preserve claims worth potentially tens of millions per firm.
The Refund Dilemma
The Supreme Court opinion conspicuously avoided addressing refund mechanics. Justice Brett Kavanaugh’s dissent noted: “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”, according to NPR.
The struck-down tariffs amounted to around $130 billion, and anyone who paid should be reimbursed, but the high court did not address how. As of December 14, 2025, the government had collected $133.5 billion in IEEPA tariff payments, with estimates reaching at least $160 billion through February 20, 2026, according to Tax Foundation.
Treasury Secretary Scott Bessent indicated the refund process could take “weeks, months, may take over a year”, while President Trump suggested repayments would get bogged down in litigation for “two, maybe five years”, according to NPR.
“Just because the process is difficult to administer doesn’t mean the government has the right to hold on to fees that were collected unlawfully.”
— Alexis Early, Partner, Bryan Cave Leighton Paisner
Senate Democrats introduced a bill requiring US Customs to refund tariffs—with interest—within 180 days, prioritizing small businesses, though passage appears unlikely in the divided Congress.
Alternative Trade Authorities in Play
Within hours of the Supreme Court decision, the administration pivoted to alternative statutory authorities. Trump signed a proclamation under Section 122 of the Trade Act of 1974 imposing a new 10% tariff, subsequently announcing an increase to 15%, according to Lawfare.
Section 122 authorizes a “temporary import surcharge” capped at 15% and limited to 150 days unless Congress acts, making it a potentially short-term replacement, notes analysis from Ropes & Gray. The administration also announced new Section 301 investigations into unfair trade practices.
| Statute | Rate Cap | Duration | Process Required |
|---|---|---|---|
| IEEPA (struck down) | Unlimited | Indefinite | Emergency declaration |
| Section 122 | 15% | 150 days* | Balance-of-payments finding |
| Section 301 | None specified | 4 years** | USTR investigation, public comment |
| Section 232 | None specified | Indefinite | Commerce investigation |
*Requires congressional approval to extend
**Must be reviewed and renewed
Before IEEPA tariffs were struck down, consumers faced an overall average effective tariff rate of 16%, the highest since 1936. Current policy with Section 122 tariffs brings the rate to 13.7%, the highest since 1941, according to analysis from the Yale Budget Lab.
Who Pays, Who Gets Paid Back?
Costco sued in December for a full refund of IEEPA tariffs, noting about a third of its US sales come from imported products, reports NBC News. FedEx indicated in September it expected a $1 billion hit to fiscal year earnings from tariffs.
Small businesses face steeper obstacles. Danny Reynolds, who runs Stephenson’s of Elkhart fashion store, questioned: “For small businesses who don’t have retained legal teams to file suit and sort of get their place in line, will there be anybody going to bat for us?”
A Federal Reserve Bank of New York analysis found almost 90% of the “economic burden” of tariffs fell on consumers and businesses, with Senator Elizabeth Warren noting no “legal mechanism for consumers and many small businesses to recoup the money they have already paid”, according to NBC News.
- Refund process likely requires individual lawsuits or Court of International Trade intervention
- Companies with liquidated entries before Supreme Court ruling face tighter deadlines
- Section 232 and 301 tariffs—worth tens of billions—remain legally intact and unchallenged
- Consumer refunds virtually impossible; businesses will pocket any payments received
- Alternative tariff authorities may recreate much of the revenue impact within statutory limits
Trade Deal Fallout
The Trump administration negotiated various agreements with eighteen countries, all premised on escaping IEEPA tariffs or securing lower rates. With the legal basis invalidated, the fate of these deals is in question, according to analysis from the Council on Foreign Relations.
Section 232 and 301 tariffs are not as readily subject to legal challenge, given these statutes expressly authorize the President to adjust imports following investigative processes, but courts may now be more inclined to scrutinize new tariff actions, notes Ropes & Gray.
What to Watch
The Court of International Trade must now establish refund procedures without Supreme Court guidance. Attorneys for small business plaintiffs filed requests for a fresh injunction blocking tariff enforcement and initiating refunds, with more than 1,500 refund lawsuits filed to date, according to Transport Topics.
Three variables will determine economic impact: whether Congress extends Section 122 tariffs beyond 150 days; how quickly the Court of International Trade processes refund claims; and whether Section 301 investigations yield new country-specific duties. The Yale Budget Lab estimates temporary fiscal impulse from IEEPA refunds will approximately offset negative growth impacts of remaining tariffs for 2026, though real GDP remains persistently 0.1-0.2% smaller in the long run.
For companies that paid IEEPA duties, the race is now between legal costs and potential refunds—with Treasury holding $160 billion that importers want back, and an administration determined to replace lost revenue through every available statutory channel.