The coffee arrived in burlap sacks from Colombia, Ethiopia, and Indonesia—each one now carrying a hidden tax that Gabe Hagen never budgeted for. His Arizona roastery absorbed the blow quietly at first, like thousands of other small importers across the country. Then the Supreme Court ruled in February that the tariffs were illegal all along. Hagen started pulling invoices, adding up what the government owed him. Tens of thousands of dollars sat somewhere in federal accounts, collected under false pretenses. The question now isn’t whether he’s owed a refund—it’s whether he’ll ever see it.
Over $166 billion flowed into U.S. Customs coffers during the chaotic year of emergency tariffs imposed by President Donald Trump under a 1977 statute meant for genuine national crises. The International Emergency Economic Powers Act became a blunt instrument for trade policy, wielded to punish political adversaries and address everything from fentanyl flows to diplomatic grievances. Businesses paid rates as high as 145% on Chinese goods during retaliatory escalations. Brazilian steel, Indian pharmaceuticals, Canadian lumber—all targets of emergency declarations that courts would later invalidate. Small business owners like Hagen paid the price in real time while legal challenges wound through the system.
U.S. Customs and Border Protection filed a progress report with the Court of International Trade on March 12, outlining a four-step refund process that ranges from 40% to 80% complete depending on which phase you’re measuring. Nearly 2,000 companies have filed lawsuits demanding their money back, many before the Supreme Court even issued its 6-3 decision striking down the tariffs. The justices offered no guidance on refunds, leaving businesses to navigate a fragmented lower court system while the administration drags its feet. Customs officials estimated in early March that any functional refund mechanism would take at least 45 days to implement. That timeline has already passed. The money remains locked away.
Beth Benike runs Busy Baby, a Minnesota company that manufactures patented infant products in China. She had expansion plans, new hires lined up, product shipments ready to roll. Then the tariffs hit and she couldn’t afford to bring merchandise stateside. Inventory sat in overseas warehouses while her cash flow choked. Matthew Platkin, her attorney and former New Jersey attorney general, said she survived but barely. The illegal tariffs cost her tens of thousands at minimum—substantial money for a small operation. Benike is now suing Customs Commissioner Rodney Scott and Treasury Secretary Scott Bessent to recoup what the government seized unlawfully. Platkin’s frustration is palpable: the federal government got caught taking illegal money from millions of businesses and should simply return it with interest, no litigation required.
The Cato Institute, a libertarian think tank, calculated that interest payments on the $166 billion owed now accumulate at roughly $700 million per month. Alfredo Carrillo Obregon, a trade policy researcher there, notes that delays have serious implications not just for taxpayers broadly but for companies relying on refunds to keep operations afloat. U.S. Court of International Trade Judge Richard Eaton ordered the administration in early March to stop collecting the invalidated tariffs and recalculate past duties. His ruling applies universally to all refund claims, sidestepping a recent Supreme Court decision in an immigration case that restricted such broad orders. Yet the machinery of reimbursement grinds slowly while businesses bleed.
Victor Schwartz imports wine and spirits through his New York-based company VOS Selections. He’s been in the business for 40 years and served as lead plaintiff in the Supreme Court case that struck down Trump’s emergency tariffs. Standing outside the courthouse after arguments last November, Schwartz represented a coalition of importers who challenged the legal foundation of Trump’s tariff regime. His victory was definitive in court but incomplete in practice. Customs officials collected from 330,000 American importers according to government filings. Many paid quietly, unable to afford legal battles or unsure of their rights. Others, like Schwartz, organized resistance and won a legal vindication that still hasn’t translated into returned funds.
Barton O’Brien runs a dog apparel company that sources from manufacturers in China and India. He absorbed tariff costs rather than pass them to customers, watching profit margins evaporate. In a written response to States Newsroom, O’Brien said he’s not counting on a refund anytime soon. The administration seems determined to avoid repayment, he believes, and will drag the process through courts as long as possible. As a small business, he lacks resources to fight the federal government directly. He’s content to let Fortune 500 companies with legal departments wage that battle, hoping to benefit if they prevail. Even if refunds eventually arrive, O’Brien notes they won’t cover the damage already inflicted by cash flow disruptions and lost opportunities.
The Trump administration didn’t wait for refunds before seeking new revenue streams. Almost immediately after the Supreme Court struck down IEEPA tariffs, the White House instituted temporary import taxes under a different 1970s trade statute. The Office of the U.S. Trade Representative launched investigations into dozens of major trading partners, creating pathways for fresh tariffs based on different legal justifications. Two dozen Democratic-led states, including Oregon, Arizona, Michigan, and Pennsylvania, filed suit in the Court of International Trade challenging these new levies. The legal strategy appears designed to maintain tariff pressure while avoiding the constitutional vulnerabilities that doomed the emergency declarations.
Shawn Phetteplace directs national campaigns for Main Street Alliance, an advocacy group representing small businesses. His organization is applying legal and public pressure to force the administration’s hand on refunds. The government should simply do the right thing and return the money, he argues, while also abandoning creative attempts to impose new tariffs that courts will likely strike down. The cycle of dubious legal theories, business disruption, and eventual judicial invalidation serves nobody except lawyers. Small businesses need predictability and fair rules, not emergency declarations that treat routine trade disputes as national security crises.
Hagen’s coffee roastery continues operating while he consolidates invoices and waits. A pallet of beans that cost $5,000 to $7,000 before tariffs jumped to $8,000 to $11,000 afterward. Those increases compounded across dozens of shipments, creating a financial burden that squeezed every aspect of his business. He told States Newsroom he needs the money back—if the government will actually return it. That conditional phrasing captures the uncertainty hanging over hundreds of thousands of importers who paid what courts determined were illegal taxes. They followed the rules, paid what customs demanded, and now find themselves creditors to a federal government in no hurry to settle accounts.
The Atmus Filtration lawsuit, decided by Judge Eaton in early March, established key precedents for how refunds should proceed. The Nashville-based company successfully argued that customs must not only stop collecting invalidated tariffs but recalculate past duties to exclude them. Eaton’s order theoretically benefits all companies seeking refunds, not just Atmus, because rulings from the Court of International Trade carry universal effect in tariff disputes. Yet theory and practice diverge sharply when an administration opposes compliance. Customs officials control the refund machinery and face no immediate consequences for delays beyond judicial orders they can appeal or slow-roll through bureaucratic resistance.
Democratic-led states were instrumental in the Supreme Court case that invalidated Trump’s emergency tariffs. Attorneys general from states with significant import activity joined forces with business plaintiffs to challenge the legal theory underpinning IEEPA tariff declarations. Their argument was straightforward: the statute grants emergency powers for genuine crises threatening national security, not trade imbalances or political grievances. Six justices agreed, finding that Trump stretched statutory language beyond recognition. Yet that legal victory left practical questions unanswered, including how and when businesses would be made whole for payments extracted under invalid legal authority.
Interest calculations matter enormously at this scale. Seven hundred million dollars per month represents real money that could fund operations, hire workers, or expand capacity for the companies owed refunds. Instead it accumulates as a growing federal obligation while businesses struggle with reduced liquidity. The Cato Institute’s analysis suggests total interest could exceed several billion dollars if delays stretch into late 2025 or 2026. Federal refund statutes typically require interest payments on improperly collected taxes, but enforcement depends on courts and an administration with little incentive to expedite payments. Every month of delay transfers wealth from private businesses to government coffers.
States Newsroom contacted the Trump administration for comment but received no reply. That silence speaks to a broader strategy of minimizing discussion about refunds while maximizing efforts to impose replacement tariffs. Acknowledging the scale of money owed would create political pressure for swift repayment. Ignoring the issue allows bureaucratic processes to unfold slowly while public attention shifts elsewhere. Companies like Busy Baby and Hagen’s coffee roastery lack the media platforms or lobbying power to sustain focus on their plight. They’re left hoping that larger corporations with resources to litigate will break through administrative resistance and establish precedents benefiting everyone.
The refund struggle illustrates a fundamental power imbalance in U.S. trade policy. Presidents can impose tariffs almost instantly through emergency declarations or trade statutes, disrupting business operations and forcing immediate payment. Reversing those decisions, even after courts rule them illegal, requires navigating complex bureaucratic processes and litigation that stretches across years. Businesses bear the risk and cost of government overreach while lacking equivalent power to demand swift remedies. That asymmetry encourages aggressive use of tariff authority since consequences for presidential miscalculation fall primarily on private actors with limited recourse.
Coffee beans, baby products, wine, dog apparel—the tariff burden fell across American businesses with little regard for industry or size. What united 330,000 importers was their vulnerability to executive action justified by emergency declarations courts would later invalidate. Some, like Schwartz and Benike, fought back through litigation. Others, like O’Brien, absorbed losses and hoped larger players would win battles benefiting everyone. Still others, like Hagen, dutifully paid while wondering if the government would ever make them whole. Their experiences reveal the real cost of using trade policy as a blunt instrument for political objectives unrelated to genuine emergencies.
