A federal trade judge in New York made a significant move this week. Yesterday, Judge Richard Eaton of the U.S. Court of International Trade ruled that importers who paid duties under the International Emergency Economic Powers Act, or IEEPA, can now seek refunds. This comes after the Supreme Court earlier limited how presidents can use that law for tariffs.
The story starts with President Trump. He invoked IEEPA to impose broad tariffs on imports from countries like Mexico, Canada, and China. Trump cited emergencies such as migration surges and fentanyl flows across borders. These measures hit nearly all goods, from toys to truck parts, and collected between $130 billion and $175 billion in revenue over time from all countries. Importers faced extra costs that rippled through supply chains.
In February the Supreme Court stepped in with a key decision. In Learning Resources, Inc. v. Trump, Chief Justice John Roberts wrote for a 6-3 majority that IEEPA does not let the president impose tariffs. The court upheld a lower ruling in V.O.S. Selections, Inc. v. Trump and sent other cases to the trade court. This cleared the way for challenges like the one from Atmus Filtration Technologies Inc. (NYSE: ATMU).
Judge Eaton built on that foundation. His ruling came in a case filed by Atmus Filtration, a Tennessee company that makes filtration systems for engines and industrial use. Eaton said all importers who paid these IEEPA duties qualify for relief based on the Supreme Courts stance. He took sole responsibility for handling refund cases, which speeds things up.
Eaton went further with clear instructions. He ordered the Trump administration to process import paperwork without adding IEEPA tariffs. For goods already cleared, U.S. Customs and Border Protection must recalculate duties and issue refunds. This practical step turns the Supreme Courts words into action for businesses waiting on cash back.
Consider what this meant for everyday importers before the ruling. Small businesses, for example, absorbed tariff hits on components like electronics or fabrics. A toy maker might have paid 25% extra on Chinese parts, squeezing slim margins. Logistics firms felt it too. FedEx Corporation (NYSE: FDX), which sued separately over similar duties, dealt with higher costs on international shipments. These tariffs raised prices for U.S. consumers and slowed operations for companies reliant on global trade.
Atmus Filtration provides a real example. Tariffs on steel or imported materials increased their production costs. Now, with Eatons order, they and others can recover those payments. This relief could total billions across thousands of claims, easing pressure on supply chains strained since 2025.
The ruling affects a wide group. Any importer who paid IEEPA duties on goods entering the U.S. can pursue refunds. Eaton emphasized that the Supreme Courts decision applies broadly. Customs must act quickly: finalize entries without tariffs or adjust past ones. Companies now file protests or supplemental refunds through standard channels.
Challenges remain, though. The administration might appeal Eatons order to the Federal Circuit. Past cases show appeals can delay payouts for months. Importers should document payments meticulously. Trade lawyers expect a rush of filings, with the court prioritizing cases like Atmus to set precedents.
Businesses watching this development see a shift. Tariffs under IEEPA aimed to protect U.S. interests but overreached into Congress’s domain over trade taxes. Eaton’s decision hands relief to those who paid up front. It also signals courts will scrutinize executive power closely in trade policy.
For importers, the path forward looks clearer. Small firms regain funds to reinvest, while larger ones like logistics giants stabilize costs. This week’s order marks a turning point after months of uncertainty. Trade flows might smooth out as refunds flow back into operations.
