A federal judge overseeing a high-profile tariff refund case pressed the government to speed up repayments to small importers, warning that the slow pace is creating an uneven playing field that favors larger companies. More than $85 billion in tariff refunds, deemed illegal by the Supreme Court, have been approved but remain unpaid, widening the gap between importers with abundant resources and those without.

The legal dispute traces back to a Supreme Court decision that ruled the president lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose certain tariffs. Following this ruling, the judge issued orders directing Customs and Border Protection (CBP) to reprocess and refund duties collected under these tariffs. Despite these instructions, the implementation of refunds has progressed slowly, particularly impacting smaller firms that do not have customs brokers to navigate the complex system.

At a recent hearing, the judge expressed frustration that the refund process had shifted from legal arguments to administrative execution and settlement negotiations. He emphasized that all substantive legal questions were resolved, and urged the government to complete all refunds promptly. Customs and Border Protection has reported that nearly $90 billion in claims have entered phase one of processing, with a total potential refund pool of up to $127 billion. Although over $85 billion in refunds have been approved, only approximately $22 billion has been fully reimbursed to importers so far.

To manage refunds, CBP launched the CAPE refund tool, which integrates tariff claims into the Automated Commercial Environment (ACE) Portal. This system requires submissions in CSV format and limits batches to 9,999 entries, a structure that has inadvertently advantaged large importers equipped to maneuver efficiently within the platform. The judge acknowledged the administration did not intend to favor big companies but highlighted that current procedures disproportionately disadvantage smaller firms.

The government has appealed restrictions on universal refunds, particularly challenging the court’s ability to mandate repayment for entries already finally liquidated. This legal contention contributes to ongoing delays, prolonging uncertainty for many businesses awaiting restitution of funds the Supreme Court deemed improperly collected.