US importers win class-action route to Trump tariff refunds - ICLG

The US Court of International Trade allowed importers to pursue refunds collectively rather than forcing every business to file its own case. Judge Richard Eaton certified a class seeking repayment of duties collected under tariffs later ruled unlawful. The decision matters because individual lawsuits could cost smaller importers more than the refunds they seek.

Freestyle World brought the case against US Customs and Border Protection, its commissioner, and the United States. It sought an injunction requiring customs to recalculate affected entries without the unlawful IEEPA duties. Customs could then calculate each importer’s overpayment and refund it.

The ruling came despite an existing refund programme. By 2 October, CAPE had returned about $126 billion plus interest. Eaton warned that voluntary applications could leave tens of thousands of smaller importers unpaid, while stressing that certification itself did not provide immediate refunds.

A class-action lawsuit combines people or businesses with a common legal problem into one proceeding. Representatives act for the wider group. This matters here because smaller importers may be entitled to refunds, but the cost and effort of suing separately could outweigh the money recovered.

Freestyle World filed on behalf of smaller importers. It sought an injunction covering the class, rather than asking the court to calculate every importer’s individual damages. If customs removes the unlawful duty from each affected entry, the agency can determine the overpayment and issue the appropriate refund.

Judge Eaton certified the class under Rule 23(b)(2). He rejected the government’s argument that collective relief was unsuitable because each importer’s circumstances differed. He also noted that a voluntary refund system could miss businesses that lacked the resources, awareness, or time to apply, leaving them without repayment.

The court certified a class of importers seeking refunds for unlawful IEEPA duties. Freestyle World brought the case for smaller importers that might find individual litigation too costly. The article does not provide the final certification order’s complete membership rules, so it cannot identify every included business by name or category.

Freestyle’s original complaint proposed a class limited to importers whose relevant payments did not exceed $1 million. It later sought an injunction covering class members’ customs entries. That order would require customs to remove the unlawful duties and calculate resulting overpayments.

Some imports were excluded from CAPE because customs had already finalized their duty calculations and the voluntary revision deadline had passed. The article does not say those businesses were excluded from the certified class itself. It says they generally needed a separate court order to pursue repayment, making the class action significant for smaller importers.

The CAPE programme had already refunded approximately $126 billion in duties plus interest by 2 October. That figure shows the scale of the repayment effort after the tariffs were found unlawful. It also shows why the remaining gap matters: even a small share of unpaid claims could represent billions of dollars.

CAPE automates refunds by helping customs process entries without the unlawful IEEPA duties. Importers generally had to apply voluntarily. Some entries were also outside the programme because customs had finalized the duty calculation and the voluntary revision deadline had expired.

Judge Richard Eaton warned that tens of thousands of importers could still seek repayment. He believed many were smaller businesses deterred by litigation costs or effort, or unaware of the programme. Without collective relief, he said the Treasury could retain billions in unlawfully collected duties, even after CAPE’s substantial payments.

Liquidation is customs’ final calculation of the duties owed on an import entry. Reliquidation is a later recalculation of an assessment already made. These steps determine the amount an importer legally owes and whether money was paid in excess.

If an unlawful IEEPA tariff is included, the duty calculation is too high. Removing that tariff lowers the lawful amount owed. The difference becomes an overpayment, which customs can return to the importer. The trade court’s requested injunction would require customs to liquidate or reliquidate class members’ entries without those duties.

This mechanism makes the class action practical. The court would not need to calculate every importer’s refund itself. Customs could process each entry through its CAPE system and determine the amount individually. However, entries with finalized calculations and expired voluntary revision deadlines could require a court order before customs could revisit them.

Tariffs are collected at the border from the importer entering goods into the United States. In this case, the administration used the International Emergency Economic Powers Act as its claimed authority for duties targeting Canada, Mexico, and China, as well as later trade-deficit tariffs.

The importers, not foreign governments or companies, paid the duties to US Customs and Border Protection. Freestyle World was one such importer and sued for refunds. The Supreme Court later held in Learning Resources v Trump that IEEPA did not authorize the President to impose tariffs.

That ruling shifted the dispute from whether the duties were lawful to how importers would be repaid. Customs created CAPE to automate refunds, but the system depended on importers applying voluntarily and did not cover every entry. The court’s class action could help reach smaller importers that otherwise might not pursue repayment.

When tariffs are imposed on imported goods, the importer must pay the duty at the border. That raises the cost of bringing goods into the United States. The article describes US consumers as paying a high price for the policy and reports a measurable increase in consumer-goods inflation.

A Federal Reserve Bank of New York study estimated that the 2025–26 tariffs contributed 2.9 percentage points to consumer-goods inflation by February 2026. The estimate covered non-oil goods and excluded services. It therefore measured the tariffs’ effect on those goods, not overall inflation.

Businesses also faced the direct duty payments and the burden of seeking refunds after the tariffs were ruled unlawful. Some smaller importers may not recover money because applications require effort or because entries were already finalized. The refund litigation could determine whether those costs are returned, while the inflation estimate shows the policy’s broader consumer impact.