NEED TO KNOW

• The DOJ filed a late Friday request asking the Court of International Trade to wait 120 days before scheduling tariff refund proceedings, after missing the court’s Feb. 27 response deadline
• More than 2,000 companies including FedEx, Costco, Hasbro, L’Oreal and Dyson have filed lawsuits seeking between $130 billion and $175 billion in refunds from tariffs the Supreme Court ruled unconstitutional
• During litigation, DOJ lawyers told judges companies would “assuredly receive payment on their refund with interest” to prevent courts from blocking tariff collection — now Treasury Secretary Bessent calls refunds “the ultimate corporate welfare”

WASHINGTON, DC (TDR) — The Department of Justice filed a late Friday request asking for up to four months before the U.S. Court of International Trade begins scheduling proceedings on what could become the largest tariff refund fight in American history — eight days after the Supreme Court declared the tariffs unconstitutional and after missing a court-imposed deadline to respond.

The filing came after the DOJ failed to respond by Feb. 27 to a motion by V.O.S. Selections — the small business plaintiff that helped win the Supreme Court case — asking the federal appeals court to send the case back to the Court of International Trade for refund proceedings. As of Thursday afternoon, no DOJ filing had appeared. When it finally landed late Friday, it asked for far more than the court expected.

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DOJ lawyers argued that “complexity in the future counsels appropriately careful process, not breakneck speed” and accused the plaintiffs’ attorneys of pursuing a speedy schedule out of an “apparent desire to be the center of attention.”

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What The Government Promised Courts

The contradiction at the center of this fight is documented in court filings.

During the year-long legal battle that reached the Supreme Court, DOJ lawyers repeatedly told judges that companies would not suffer irreparable harm from paying the tariffs because refunds would follow any adverse ruling. Those assurances were critical — they persuaded courts to let the government keep collecting tariffs while the case was pending rather than issuing emergency injunctions to stop collection.

In one filing, the government told the Court of International Trade that plaintiffs “will assuredly receive payment on their refund with interest.” In a separate January 2026 stipulation, the administration agreed it would refund IEEPA tariffs for “all current and future similarly situated plaintiffs” following a final decision ordering refunds.

Neal Katyal, the former acting U.S. solicitor general who argued the case before the Supreme Court on behalf of small business plaintiffs, called out the reversal in a Washington Post op-ed this week.

“The government cannot tell courts that refunds are simple and inevitable when seeking relief — and then imply they are complex and distant when the time comes to pay. The rule of law does not operate on shifting premises.” — Neal Katyal

Sara Albrecht, chairperson of the Liberty Justice Center, which also represented companies before the Supreme Court, echoed the point in a statement after the DOJ’s Friday filing.

“The government cannot have it both ways. It cannot argue there is no harm because refunds are available — and then delay when the time comes to return the money.” — Sara Albrecht

What The Administration Is Saying Now

The administration’s posture shifted within hours of the Feb. 20 ruling.

Treasury Secretary Scott Bessent told Fox News on the day of the decision that refund litigation “could take years to litigate and get to a payout.” He then framed the entire refund process as a giveaway to corporations.

“If there is a payout, it looks like it’s just going to be the ultimate corporate welfare.” — Scott Bessent

Speaking at the Economic Club of Dallas earlier that day, Bessent said of the IEEPA revenues: “I got a feeling the American people won’t see it.” He later said he would follow the court’s direction but estimated the actual amount closer to $130 billion than the $175 billion projected by the Penn Wharton Budget Model.

President Donald Trump predicted at a press conference the same day that refunds would “get litigated for the next two years.”

Meanwhile, Politico reported the administration is weighing strategies to limit payouts, including discouraging companies from demanding refunds, arguing the revenue is retroactively legal under replacement tariffs, and offering faster refunds to companies that agree to forfeit a portion of what they’re owed.

The Scale Of What’s Owed

The Penn Wharton Budget Model estimates cumulative IEEPA tariff collections reached approximately $175 billion through January 2026, with the IEEPA share of total tariff revenue exceeding 50% by December 2025. The Cato Institute noted that interest owed on refunds would add roughly $10 billion more, and that the total would exceed the combined fiscal 2025 spending of the Department of Transportation and the Department of Justice.

Approximately 300,000 shippers paid IEEPA tariffs over the past year. More than 2,000 have already filed refund lawsuits at the Court of International Trade. The plaintiff roster now includes FedEx — which projected a $1 billion earnings hit from tariffs — as well as Costco, Hasbro, L’Oreal, Dyson, Bausch + Lomb, Revlon and J. Crew.

A New York Fed study found that U.S. consumers and companies paid 90% of the tariff costs — contradicting the administration’s repeated claims that foreign countries bore the burden.

What Congress Is Doing — And Not Doing

Senate Democrats introduced the Tariff Refund Act of 2026 on Feb. 23, requiring Customs and Border Protection to process all refunds within 180 days and prioritize small businesses. The bill, led by Sens. Ron Wyden (D-OR), Ed Markey (D-MA), and Jeanne Shaheen (D-NH), now has 23 Democratic co-sponsors.

In the House, Rep. Steven Horsford (D-NV) introduced a companion bill with a faster 90-day deadline and is reportedly weighing a discharge petition to force a vote if Republican leadership blocks consideration.

Neither bill has a clear path to passage with Republican majorities in both chambers. No Republican senator or House member has co-sponsored the refund legislation. White House spokesperson Kush Desai told CNBC that “President Trump used tariffs to actually deliver where Democrats could only talk.”

The Senate Democrats wrote to Bessent on Friday accusing the administration of “stonewalling” and demanding immediate action: “This money does not belong to the federal government.”

What Happens Next

The legal path forward remains uncertain. The Supreme Court’s 6-3 ruling — authored by Chief Justice John Roberts and joined by Justices Gorsuch, Barrett, Sotomayor, Kagan and Jackson — was unambiguous that IEEPA does not authorize tariffs. But the Court did not order refunds or specify a process, leaving that to the Court of International Trade.

The DOJ’s Friday filing asked the Federal Circuit to wait until the Supreme Court finalizes its judgment — which can take up to 32 days — and then wait another 90 days to “allow the political branches an opportunity to consider options.” The filing also noted that the IEEPA tariffs “have been replaced by vigorous new tariffs” under Section 122 of the Trade Act of 1974 — though it did not explain why replacement tariffs are relevant to money already collected under an unconstitutional authority.

Trade attorney Pratik Shah, who led the Learning Resources Supreme Court case at Akin Gump, was unequivocal about the legal obligation.

“It is clear that the importers of record that paid the unlawful tariffs are entitled to the amounts they paid. There is no doubt that people that paid the IEEPA tariffs should get refunds.” — Pratik Shah

Justice Brett Kavanaugh, who dissented from the ruling, warned the refund process would be a “mess” — noting that some importers had already passed costs on to consumers.

The Cato Institute, a libertarian think tank that backed the tariff challenge, pointed out that CBP has existing authority to reliquidate entries within 90 days of liquidation and could unilaterally begin issuing refunds for qualifying shipments before mid-March — without waiting for court proceedings. The administration has shown no indication it intends to use that authority.

When the government tells courts that monetary harm is temporary because refunds will make companies whole — and uses that argument to keep collecting $175 billion in duties the Supreme Court later calls unconstitutional — does asking for four more months to “consider options” represent a complex logistical challenge, or a strategy to keep money the government was never authorized to collect?

Sources

This report was compiled using information from CNBC, Bloomberg via Business Standard, Fortune, SCOTUSblog, the Penn Wharton Budget Model, the Cato Institute, the Council on Foreign Relations, WilmerHale, the Peterson Institute for International Economics, Fox Business, The Hill, the Senate Finance Committee, Transport Topics, the Washington Times, and the U.S. Supreme Court opinion.

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