U.S. judge warns: DOJ appeal will disrupt Trump tariff refund process

A federal trade judge has made a rare public statement regarding the Trump administration’s appeal against his order for tariff refunds, as the legal battle over control of refund proceedings escalates.

U.S. Court of International Trade Judge Richard Eaton directly responded on Wednesday through an open letter to the Department of Justice’s appeal of his ruling, questioning the government’s legal position and warning that intervention by the appeals court could disrupt the online application system that has already processed at least $85 billion in refunds.

The Supreme Court ruled in February that the relevant tariffs were illegal, and Eaton subsequently ordered refunds totaling around $166 billion.

The Department of Justice responded the same day, claiming it established the online refund system based on its own authority, attempting to dissociate the system from Judge Eaton’s tariff refund order.

The Department of Justice’s core argument in its formal appeal this week is: CBP has no legal authority to reopen import declarations already “finally liquidated”, and Eaton likewise lacks authority to order refunds to importers who did not independently file suits in the trade court.

The outcome of this case directly affects whether about 330,000 importers who paid the disputed tariffs can successfully obtain refunds, with particular attention on the application barriers faced by small businesses.

Judge points out: Online refund application website was established "per his court order"

In the letter sent to the Department of Justice and requested to be entered into the case record, Eaton’s wording was unusually direct.

He described the government’s submitted documents as "fancy wording," and attached 30 pages of material indicating that U.S. authorities previously acknowledged that the online application portal was established “in response to his court order” rather than as a "voluntary" initiative, as claimed by the government.

The government insists this portal was built under its own authority and unrelated to Eaton’s order. Eaton responded, "The government has good reason to take pride in its refund efforts," but also warned that any intervention in his case handling would "hinder the continued progress currently underway."

Liberty Justice Center, a major plaintiff representing many small businesses, stated on social media that Eaton’s letter highlighted an "important fact"—all progress so far on refunding illegal tariffs “was entirely because the court ordered the government to act.”

Department of Justice rebuts: Refunds initiated by Customs

In its response that day, the Department of Justice disputed Eaton’s claim that the refund progress stemmed from his order.

Government lawyers cited a court filing from early March in which an official stated the Customs and Border Protection (CBP) had already "prepared for potential refund demand" when the judge initially ordered recalculation of tariffs, indicating the refund work was not merely a passive response to a judicial order.

Additionally, the Department of Justice’s formal appeal this week centers on its argument that CBP has no legal authority to reopen already "finally liquidated" import declarations, and Eaton has no power to order refunds to importers who have not individually filed suits in the trade court. The government cited a Supreme Court precedent to advocate limiting courts’ ability to issue nationwide or so-called "universal" injunctions.

Also on Wednesday, Eaton submitted another letter defending his order requiring CBP Director Rodney Scott to testify in court. The government likewise appealed this appearance requirement, as Scott’s agency is responsible for tariff collection and refund management.

Outlook for refunds for 330,000 importers remains uncertain

This case, overseen by Eaton, consolidates thousands of suits filed by importers in the U.S. Court of International Trade, most of which were on hold prior to the Supreme Court’s ruling in February.

Eaton previously paused his overall refund order to allow the government time to develop the online application system; the system launched relatively smoothly in April, but U.S. officials made it clear from the outset that some categories of tariffs—especially those in “final” status—were not covered by the system.

The government has not yet specified how many among the approximately 330,000 importers who paid the disputed tariffs are ineligible to apply for refunds through the portal.

Some trade lawyers and businesses have expressed concerns that the government is attempting to shift too much burden of proof onto importers, and that small businesses may face significant difficulties with the application process or in filing separate suits.

In recent weeks, Eaton has hinted at lifting the pause on his order to push for full implementation of the refund order, prompting the Department of Justice’s formal appeal this week. Eaton has now scheduled a public hearing for June 9 to discuss next steps.

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