A federal judge has ordered the Trump administration to begin refunding an estimated $130 billion in tariffs to American companies after the Supreme Court struck down the emergency measures, setting up a massive government payout that Justice Brett Kavanaugh warned would create a financial mess.

Clinton Judge Takes Control of Refund Process

Judge Richard Eaton, appointed by former President Bill Clinton, issued a three-page order Wednesday directing U.S. Customs and Border Protection to calculate what more than 1,000 importing companies would have paid without the now-invalid tariffs. Eaton declared he has sole jurisdiction over all refund cases in the U.S. Court of International Trade, stating no other judge can reach contrary conclusions on the matter. The order follows a February Supreme Court decision that voted 6-3 to block President Trump’s use of emergency powers to impose sweeping tariffs on trading partners.

Supreme Court Blocks Emergency Tariff Authority

The Supreme Court majority ruled that the International Emergency Economic Powers Act, a 1977 law allowing presidents to regulate economic transactions during national emergencies, does not authorize tariffs. The justices determined Congress never clearly granted the executive branch that power, even after declaring a national emergency. Trump had imposed the tariffs on nearly every country last year under IEEPA. Justice Kavanaugh dissented, warning the government may be required to refund billions even though many companies already passed costs to consumers.

Administration Signals Appeal as Refunds Loom

Judge Eaton rejected concerns about chaos during a hearing before issuing his order, stating that nothing is particularly novel about providing refunds. The Trump administration indicated it will likely appeal the order to delay its implementation. Eaton scheduled a closed-door conference on Friday to discuss refund procedures with parties in the case, which was initially brought by Atmus Filtration, a company that paid the disputed tariffs. CBP must now calculate affected imports as if the tariffs never existed, paving the way for companies to recoup billions in payments.

Constitutional Powers Under Scrutiny

The ruling represents a significant check on executive authority, with the Court emphasizing Congress must explicitly grant emergency economic powers to the president. The decision affects fundamental questions about the separation of powers and presidential authority during declared emergencies. The refund process will test federal bureaucracy as customs officials work through thousands of claims while the administration considers its legal options to halt or slow the massive payout to American businesses.