U.S. Customs and Border Protection told a federal judge it cannot immediately comply with a court order to refund roughly $166 billion in tariffs collected under President Donald Trump’s use of emergency powers, citing technical and manpower constraints. The agency outlined plans to overhaul its systems for streamlined refunds, potentially starting in late April.

The tariffs, imposed last year on imports from most countries, were ruled illegal by the Supreme Court in a 6-3 decision on Feb. 20 in the case of Learning Resources, Inc. v. Trump. The court held that Trump exceeded his authority under the 1977 International Emergency Economic Powers Act (IEEPA) because setting tariffs falls under Congress’s taxing power. The ruling struck down the sweeping reciprocal tariffs, which imposed duties of up to 145 percent on dozens of trade partners.

Judge Richard Eaton of the U.S. Court of International Trade issued the refund order in a lawsuit filed by Atmus Filtration, a Nashville, Tennessee-based manufacturer of filters and chemical products. Eaton’s ruling applies broadly, holding that all importers of record are entitled to refunds of duties paid under the IEEPA tariffs, with interest. 

During a hearing, Eaton said, “Customs knows how to do this. They do it every day. They liquidate entries and make refunds.”

CBP reported that the tariffs involved more than 330,000 importers and over 53 million entries. The agency said its Automated Commercial Environment system lacks the capability for mass refunds, requiring manual processing that would divert staff from security duties. Instead, CBP proposed consolidating payments by importer, estimating the upgrade could save over four million hours of work.

The Trump administration may appeal Eaton’s order to the U.S. Court of Appeals for the Federal Circuit, potentially delaying refunds. Trade lawyer Ryan Majerus, a partner at King & Spalding and former U.S. trade official, said he expects the government to seek a stay “to buy more time for U.S. Customs to comply.”

Business groups have pushed for immediate refunds following the Supreme Court decision. The high court did not address refunds directly, leaving the process to lower courts. U.S. businesses paid billions under the tariffs, with Customs collecting more than $200 billion in total tariff revenue through August 2025, including over $70 billion from the country-based levies now invalidated.

U.S. Trade Representative Jamieson Greer indicated the administration plans to pursue tariffs through other congressional authorities. “We are very focused on using the alternative authorities that Congress has delegated to the president,” Greer said in a recent interview.

The tariffs originated from Trump’s push for reciprocal trade, aimed at leveling the playing field with countries imposing higher duties on U.S. goods. While some tariffs on specific industries, such as steel, remain unaffected, the IEEPA ruling affects broader levies. 

Treasury Secretary Scott Bessent noted that the administration awaits lower-court guidance on refunds, saying, “It’s not up to me.”

Importers have filed numerous lawsuits since the Supreme Court ruling, seeking clarity on the refund process. Eaton designated himself to handle all such cases, providing a centralized path forward.