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A federal judge has granted the Trump administration additional time to establish an automated system to process tariff refunds, following a request from Customs and Border Protection (CBP). The agency stated it requires 45 days to develop this new system.
Judge Richard Eaton of the U.S. Court of International Trade initially demanded immediate action but modified his directive after hearing from CBP officials during a hearing on Friday. He has now scheduled a progress update for March 12.
According to government data, CBP has collected approximately $166 billion in tariffs from over 330,000 importers. These tariffs were invalidated by the Supreme Court and must now be reimbursed to the importers.
“These duties must now be refunded with interest, and the clock is ticking,” Judge Eaton stated in his concise ruling.
He further noted that interest is accruing daily, amounting to about $650 million each month. If the tariff entries are not resolved by the end of the year, it is estimated that $10 billion in interest could accumulate, placing a significant financial burden on American taxpayers.
The trade court recently tapped Eaton, an appointee of former President Bill Clinton, to oversee all the refund litigation. More than 2,000 companies have filed lawsuits.
Eaton has signaled he wants a streamlined process where companies don’t all have to sue, and he has rejected the notion that refunds will be a messy process.
The Trump administration has raised logistical concerns with immediate compliance, however. With more than 50 million impacted tariff entries, CBP says the automated system is needed to minimize errors and make the process efficient.
“CBP estimates that the automated controls described above will save CBP over 4 million hours compared with the manual processes it would otherwise have to complete,” Brandon Lord, a top trade official at CBP, wrote to the judge.
Lord’s 45-day estimate would have the system ready by April 20.