The companies are jockeying for position if the Supreme Court forces the Trump administration to repay billions in tariff revenue it collected this year.
But they do so without clarity on the best approach and amid much uncertainty about whether any decision to invalidate Trump’s signature “framework” tariffs and demand refunds is even on the way.
“We don’t know how this is going to shake out,” noted Erik Smithweiss, a partner focused on a range of commercial issues at the firm GDLSK, between calls with clients last week.
He described the ongoing preparations as being about preparing for multiple scenarios.
“We’re really talking about belts and braces,” he said.
These preparations for the business world include preemptive lawsuits against the Trump administration, preparing petitions to the US Customs Department, as well as simply checking invoices to make sure they know exactly what they paid.
All to secure a seat in a fare refund line that may or may not ever be in line.
A demonstrator holds a sign outside the US Supreme Court in Washington in November as the court heard arguments on the legality of much of Donald Trump’s tariffs. (MANDEL NGAN/AFP via Getty Images) ·MANADEL AND through Images
The work began in earnest after Supreme Court arguments in early November saw swing justices ask skeptical questions about the president’s defense of his tariff powers.
At stake in the entire American economy is nearly $100 billion in revenue. The U.S. government has collected more than $200 billion in taxes since the start of the year, and the Tax Foundations estimates that about 55 percent of that revenue comes from specific tariffs that face legal jeopardy.
The Supreme Court case concerns whether a 1977 law called the International Emergency Economic Powers Act (IEEPA) gives the president power to impose tariffs.
Other tariff powers, such as so-called Section 232 and Section 301 fees, which also bring in significant revenue, are not on the court’s docket.
Costco ( COST ) made headlines last week when it became the biggest name yet to join a rapidly growing list of companies suing the Trump administration to ensure their future eligibility for refunds.
The lawsuit called Trump’s IEEPA fees “illegally collected.” The company told a federal commercial court that it is “seeking relief from the impending liquidations to ensure that its right to a full refund is not jeopardized.”
Customers are seen outside a Costco store on December 2 in Chicago. (Scott Olson/Getty Images) ·Scott Olson via Getty Images
Similar lawsuits have been filed by a number of other brands, from Revlon to Ray-Ban to Kawasaki to Bumble Bee Foods.
In the commercial context, “settlements” refer to when a final calculation is made of the tariffs due on an imported good. This process must be done within one year of the first charge, but generally takes place sooner, around 10 to 11 months.
That means the wind-down deadline is fast approaching for many tariffs levied shortly after Trump took office. Businesses are concerned that this final stamp on their initial IEEPA rates could make them face a more difficult challenge in getting a refund later.
Some companies, like Costco, have gone the litigation route to stop liquidation, but it’s far from the only option. Others — especially smaller companies — seem to gravitate toward petitions with the U.S. Customs Department.
This is another process, officially called a protest, to challenge unfairly collected rates. In theory, it can be used even after a fare is liquidated to fix anything from material errors to illegal fares.
President Donald Trump speaks during an event to announce new tariffs in the Rose Garden of the White House on April 2 in Washington. (AP Photo/Mark Schiefelbein, File) ·THE ASSOCIATED PRESS
Ted Murphy, an international trade attorney at the law firm Sidley Austin, sent messages to clients about what actions companies can take. He recommends first saving records of the exact fares paid, taking into account the route of the protest, perhaps even preemptively.
“Importers need to remember that refunds will almost certainly NOT be automatic,” he said in a note to Yahoo Finance. “Importers will need to take action to obtain a refund and should take action now to protect their rights.”
The Supreme Court is still deliberating and may not make its final decision until 2026, but arguments in early November already featured a discussion of what the potential refunds could entail.
“It looks to me like it could be a mess,” said Judge Amy Coney Barrett.
“We don’t deny that it’s difficult,” responded attorney Neal Katyal, who represents the companies trying to reduce the tariffs, suggesting that he believes companies outside of the five that filed the lawsuit may have to take action. “It must be an administrative protest.”
He also noted that refund cases in recent history have proven difficult and lengthy.
Attorney Neal Katyal speaks to reporters outside the Supreme Court on November 5. (AP Photo/Mark Schiefelbein) ·THE ASSOCIATED PRESS
It all comes from the fact that it doesn’t make a lot of sense that the Trump administration will make the repayment process easy if the court forces its hand.
Smithweiss raised the possibility that the Trump team’s response to a negative ruling would be an edict to “fight tooth and nail and not give your money back unless the judge tells you you absolutely have to.”
“That’s what we’re all anticipating,” he said.
Trump himself has often said the US would face “economic disaster” if the court rules against his tariffs, and his advisers have often sidestepped questions about the consequences of a negative ruling.
In an interview with CNBC last week, Commerce Secretary Howard Lutnick was asked about Costco’s lawsuit. He replied that “if somebody gets in line saying. ‘If, if, if, if, I’d like some money,’ I understand, but it’s not going to happen.”
He quickly added, “We’re going to have tariffs regardless of what comes next.”
Ben Werschkul is the Washington correspondent for Yahoo Finance.
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