Retailers Sue for $170 Billion in Tariff Refunds After Supreme Court Ruling

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2.28.2026

Quick Facts

Supreme Court ruled February 20, 2026 that Trump’s global tariffs under IEEPA were illegal, invalidating $133.5 billion in collections
Over 2,000 companies including Kohls, PacSun, J Crew, Skechers, and L’Oréal have filed lawsuits seeking refunds totaling more than $170 billion
Department of Justice seeks four-month delay on processing refunds while Trump imposes new 15% surcharge under different legal authority

The Supreme Court’s 6-3 decision on February 20, 2026 declared that the International Emergency Economic Powers Act does not authorize presidential tariffs. The ruling immediately invalidated Trump’s global tariffs imposed throughout 2025.

U.S. Customs and Border Protection collected approximately $133.5 billion in IEEPA tariffs from more than 301,000 importers across 34 million entries. Economic estimates suggest total refunds could reach $150-175 billion.

Major retailers moved quickly to secure their refund rights. Companies filing lawsuits include Kohls Inc., PacSun, J Crew Group, Uniqlo, Skechers, and L’Oréal. The plaintiff list extends to Costco, Toyota, Columbia Sportswear, Peloton, Crocs, and Bath & Body Works.

“Over 90 importers initially filed actions in the Court of International Trade, with the number growing to over 2,000 companies,” according to court filings. Recent additions include Hasbro, Dyson, and Bausch + Lomb.

The business impact hit small companies particularly hard. Beth Benike, co-founder of Busy Baby, halted all imports from China due to uncertainty. “I should have had it shipped last month, but I was waiting for the Supreme Court decision, because it was the difference between paying an extra $48,000 in tariffs or not,” she told reporters.

Within hours of the Supreme Court ruling, President Trump signed a proclamation imposing a 10% surcharge under Section 122 of the 1974 Trade Act. He later announced plans to raise it to 15%. This new tariff structure will remain until July 24, 2026.

The Department of Justice has requested a four-month delay on processing refunds, asking courts to wait until the Supreme Court finalizes its judgment plus another 90 days to “allow the political branches an opportunity to consider options.”

Trade attorney Pratik Shah stated: “It is clear that the importers of record that paid the unlawful tariffs are entitled to the amounts they paid. There is no doubt that people that paid the IEEPA tariffs should get refunds.”

Treasury Secretary Scott Bessent opposed the refunds, calling them the “ultimate corporate welfare” and told Fox News “I got a feeling the American people won’t see it.”

TD Securities estimates refunds will take 12 to 18 months to process. The Budget Lab at Yale projects the price level will rise 0.6% under remaining tariffs, representing an $800 loss for average households.

The IEEPA tariffs began February 4, 2025 on China, expanded to Canada and Mexico in March, then broadened to all trading partners in April. The average U.S. tariff rate was around 17% including IEEPA levies but will drop to approximately 7% without them.