Jack speaks with Matthew Seligman, a fellow at the Stanford Constitutional Law Center, about the remedial consequences of the Supreme Court’s decision invalidating tariffs imposed under the International Emergency Economic Powers Act. They walk through how tariff collection works, why repayment is not automatic, and the procedural hurdles importers face in trying to recover what they paid, including major barriers to class-wide or aggregate relief. They also examine the practical and political constraints shaping the process, including institutional capacity, litigation costs, and why many smaller importers may never recover their losses.
Thumbnail: President Donald Trump announces the administration’s plans to invoke tariffs under the International Emergency Economic Powers Act on April 2, 2025. (White House Photo.)
This is an edited transcript of an episode of “Executive Functions Chat.” You can listen to the full conversation by following or subscribing to the show on Substack, Apple, Spotify, or wherever you get your podcasts.
Jack Goldsmith: As everybody knows, on Friday the Supreme Court ruled in Learning Resources that the International Emergency Economic Powers Act, or IEEPA, does not authorize the tariffs that President Trump has imposed under that statute. The president has begun to assert substitute tariffs under other statutes, which raise a whole host of legal issues. But today we’re going to discuss a follow-on from last week’s case — an issue that the Court did not address and did not say a word about — namely, what is the remedy, if any, including refunds, for the tariffs that were collected unlawfully under IEEPA?
These tariffs have been estimated to be in the range of $130 to $175 billion, or maybe even more.
To discuss this with us, we’ve got Matthew Seligman, who’s a fellow at the Constitutional Law Center at Stanford. He filed an amicus brief on behalf of former government officials and legal scholars in Learning Resources opposing the government’s tariffs, and he also represents importers who may seek refunds following Learning Resources.
Good afternoon, Matthew.
Matthew Seligman: Thanks for having me, Jack.
So I would like this to be just a primer on how to understand the issue of refunds — or whatever other remedies may be available. I think we should start very basic. Why don’t you just tell us how tariff collection works and how it worked for these IEEPA tariffs?
Sure. So we’ll start with the basic legal and logistical framework for how tariff duties are assessed.
When an importer brings goods into the United States at a port of entry — whether that’s a physical port, an airport, or a land crossing — the Customs and Border Protection agency assesses a duty based on the customs declaration. There will be a provisional amount of money that’s paid.
Then sometime after that — the legal limit is up to a year afterward — CBP will liquidate, or finalize, the customs assessment, the duty assessment. So that’s how the collection process works.
Importantly, since the IEEPA tariffs were imposed in early 2025, leading up to so-called Liberation Day in April 2025, CBP has been collecting these tariff duties all along.
Now, importantly, even though the Court of International Trade — which is the specialized federal court that handles these types of trade disputes — held that the government, the president, didn’t have the authority to impose these tariffs, it stayed its decision. And that decision has been stayed throughout this litigation.
As a result, the government has continued to collect these billions and billions of dollars of tariffs, even though a federal court had already ruled that they were unlawful.
Right. So if I understand you correctly, there’s a provisional assessment and then there’s a kind of final assessment, which is called the liquidation. Is that correct?
Yeah, that’s right.
And do we have a sense — maybe we don’t — what percentage of the tariffs have been liquidated or not, i.e., subject to a final assessment?
The best public data that we have on this comes from a filing that DOJ made in a Court of International Trade case in early December. It attached a declaration from a CBP official.
As of December 10, there had been approximately 34 million entries. Each time, say, a container comes in for an importer, it creates an entry. That’s the legal object for which the duty is assessed.
So there have been 34 million of these entries as of December 10.
Thirty-four million or thirty-four thousand?
Thirty-four million. And those 34 million entries were for over 300,000 separate importers.
As of Dec. 10, DOJ represented that 19.2 million of them had not yet been liquidated, which means that about 50 percent had been. And that was in early December. We’ve had two and a half months since then.
OK, so we’ve got a giant mix of liquidated and unliquidated assessments. Is that right? Is that the right word?
Yeah — entries, because each time a container comes in, there’s an entry.
OK. So the Supreme Court ruled that the government collected these funds unlawfully. I think that’s the right reading of Learning Resources. Do you agree with that?
Absolutely.
OK. So then, in a normal case — and this has happened before — when customs collects duties that turn out to be unlawful, what does the normal refund process look like? Is there a normal refund process?
There is, but it involves an agency process.
Once an entry is liquidated, the importer — the importer of record, who actually paid the duty — has 180 days, and only 180 days, to file a protest within CBP.
Now ordinarily, the types of disputes involved are things like whether the category of goods was correct — maybe the goods were categorized incorrectly and should have come in under a different classification with a different percentage rate. Occasionally there are instances where there’s a question about the legality of the tariff duty at all.
This is the process through which refunds are supposed to be sought.
OK. And I take it that the refund is not going to be automatic. The government is not going to start, after this decision, cutting checks to the importers who paid the IEEPA tariff. So, I take it — is it true that to recover, the importer who paid has to file some type of process?
For most cases, that’s going to be correct.
So I want to be precise here. For the entries that aren’t liquidated yet, the government could just choose to liquidate them at a level lower than the initial assessment. It could say, “OK, the Supreme Court has ruled; we’re going to follow the ruling, and we’re going to liquidate these entries at the lower level, subtracting out the unlawful IEEPA tariff duties.”
It has the power to do that. Whether it will exercise that power is an open question. We can watch what the president and some of his advisers said over the weekend — it doesn’t seem likely to me — but it’s at least possible.
But why would that only apply to unliquidated entries and not liquidated ones?
Because the process always works this way: the entry is initially made and then liquidated. CBP has unilateral and discretionary authority to make adjustments to the amount of the duty that was initially assessed at the time of liquidation.
After liquidation, there’s actually a 90-day period when CBP can voluntarily reliquidate. But after that, there’s no longer any kind of discretionary authority on the part of CBP — or the federal government more generally — to just cut checks.
So someone has to seek to recover the funds.
That’s right. And the big question then is going to be whether they have to file protests or whether they can sue directly in court.
Filing protests before the—
Before CBP. So it’s an interagency process.
So it’s an administrative process before CBP, or going directly to the Court of International Trade.
That’s correct. And there’s been some disagreement among trade lawyers about which of those two approaches is viable.
OK, and I take it this is all that question — that foundational question. Assuming that the government is not going to start cutting checks, which I think we can assume — the president, as you alluded, said that this is going to be in litigation for five years. So I guess that suggests that the president, anyway, thinks that there’s going to be a lot of contestation here.
So that’s a foundational question: whether you go to CBP first in an administrative process versus going straight to the Court of International Trade. And does that turn on the liquidated–unliquidated distinction?
It turns on something else. And so the question about whether you go to court first, or whether you have to protest and then — if the protest is denied — then go to court, has to do with whether the administrative exhaustion requirement — that you have to go through this agency process first and give the agency a chance — is mandatory or not.
And there is some uncertainty in the precedent of the Court of International Trade about whether it’s mandatory. I think that ultimately there’s a significant likelihood that the Federal Circuit — which is the appellate court for the Court of International Trade — or eventually the Supreme Court again, is going to say that the administrative exhaustion requirement — that you have to protest and only then can you go to court if the protest is denied — is mandatory. I think there’s a pretty significant chance that the appellate courts are ultimately going to hold that that’s mandatory.
OK, and I take it just to be clear, because I don’t understand this area of law very well, that it’s the importers who paid that can bring the claims. They’re the only ones that can bring the claims.
That’s right. And this is something that’s been discussed more broadly, because as the economic impact of the tariffs has been discussed over the last year, there’s been this question about whether, and how much, the cost of the tariffs has been passed on from the importer to a retailer and then to consumers. And the answer to that is: some. And it’s hard to say exactly how much.
But the only party that has standing to challenge the assessment of the duty that was paid to the federal government is the importer of record. Whether there are other legal remedies down the line is a separate question. You know, whether consumers can sue companies is a completely separate question. But as far as seeking a refund of the tariff duty that was paid from the federal government, only importers can do that.
OK, before we get to what the government might argue, it just seems like this process is going to be a nightmare because of the scale of the issue. I mean, is CBP and/or the Court of International Trade set up to process all of these claims at this scale?
The short answer is, it seems that — like — no. And in fact, in that December filing that DOJ made —
What case was that again? Tell us about that case.
So that case was called AGS. And so there were about 1,500 — maybe 1,700 — companies, importers, that had filed lawsuits in the Court of International Trade back in November and December, even before the court had ruled. And the relief that those importers sought from the court was an injunction telling CBP not to liquidate any more entries.
And the hope there was that if CBP stopped liquidating entries, then once the Supreme Court ruled that the tariffs are unlawful, CBP could just liquidate at the lower levels. I think that was an optimistic request in a variety of ways. And ultimately the Court of International Trade denied the motion for an injunction.
And part of the reason why it did — the principal reason why it did — is because DOJ represented, and CBP represented, that it would be a complete logistical nightmare for them to suddenly stop liquidating. And it would create this rush of bureaucratic process all at once once the court rules one way or another. And so the government claimed then that it was going to be too much of a problem for them to put a stop on the process.
But now they’re in a situation where they are going to have to do it — and even more process — because they’re going to have to handle these protests and/or lawsuits, which is even more than they would have had to deal with if they had just stopped liquidation and voluntarily given the money back.
OK, and what — yeah, that’s good. So what has the U.S. government, in its legal filings — has it represented anything that it’s going to stop from re-litigating? What has it represented about — I mean — legal defenses, qualifications on a duty to refund, anything about the proper process? What representations has the government made?
In that AGS case, DOJ represented — along with its representations in maybe two dozen other similar cases, which were all consolidated together — that it would not oppose an eventual court order ordering CBP to re-liquidate previously liquidated entries for the plaintiffs. And that last phrase — DOJ was absolutely consistent in limiting its concession to relief for the plaintiffs in that case.
And that ends up being really important, because what it means is that what I think a lot of importers and general observers of this process may think — well, OK, look, all of these cases are basically the same. Why don’t we just have one case, and then the Court of International Trade says, OK, the Supreme Court ruled — we’re just going to order refunds for everybody?
And what DOJ has been saying — and this connects with a case that the Supreme Court decided last year about universal injunctions, Trump v. CASA — DOJ was saying that it was only conceding that the court had the power to issue that refund relief for the plaintiffs who have actually sued, not for anybody else.
The plaintiffs who had sued before Learning Resources was decided to allege that the tariffs were unlawful.
That the tariffs were unlawful and that they sought this relief about an injunction.
So are you suggesting that the government might argue that anyone who didn’t sue before Learning Resources can’t now bring suit and recover?
No, I don’t think it’s going to say that. I think what it’s going to say — and I think there’s actually a Supreme Court precedent that we can talk about that supports this view — is that they will grant refund relief, if they stick to this concession, to importers who sue later, but not to importers who don’t sue.
Yeah. In other words, there’s not going to be universal relief. That’s why you mentioned CASA.
That’s exactly correct. Yeah.
So you have to sue to get the refund. And the government is suggesting that you won’t get a refund unless you sue. Although my read of CASA was that the Supreme Court, if it issues relief, that decision would be binding on the government universally. So maybe — and again, we’re getting ahead of ourselves a little bit — a fast track to the Supreme Court might be one way to get universal relief.
Yeah, that’s absolutely right. I mean, my read of CASA is the same as yours. And I think that the Supreme Court did — you know, we can talk or not about whether this is a principled distinction that the Supreme Court made between its own remedial powers and the remedial powers of lower federal courts — but it did seem to hold for itself the authority to eventually order universal injunctions in a way that the lower courts cannot.
But the best-case scenario here is that we have cases that go to the Court of International Trade, and then the Federal Circuit, and the Supreme Court. And so maybe the Supreme Court ends up stepping in there and ordering a universal injunction. But we don’t know that for certain.
But are there no other — I mean, the Court obviously in CASA left open the possibility of many other forms of aggregate universal relief, just not universal injunctions — the class action process, complete relief, etc. Are there not other mechanisms that could, in effect, be like a class action here? It seems like there are a handful of jurisdictional issues that need to be resolved that are common to all of these cases — or at least maybe they could be clumped into two or three categories. Is that a possibility?
So the Court of International Trade does have its own class action rule, Rule 23. Whether that’s viable or not depends on a couple of other sort of antecedent jurisdictional issues. What I can say is that there has never once in history, as far as I can tell, been a class that was certified in the Court of International Trade seeking refunds of tariff duties paid.
Now, it’s certainly true that this is the largest tariff refund set of cases that has ever existed in American history, but it’s not the first. And so the reason why — and we can talk a little bit more about this jurisdictional question later that goes to whether you have to protest first or not — is that the jurisdictional provision, or venue provision, for challenging a protest says that only the importer of record can sue. And so it seems that that precludes the possibility of class action aggregation.
And there’s some precedent in the Court of International Trade to say that. And even if Rule 23 is viable for challenges to protests, there are going to be individualized issues. OK — did you exhaust your administrative remedies? Did you protest in a timely way? Was your protest properly filed in all of the technical ways that it needs to be? So even if Rule 23 is available, just as a general matter there’s going to be a serious question about whether Rule 23 is satisfied, because the government will likely argue that those individual issues predominate over the common ones.
Are there no common issues that could be lopped off and put into some kind of aggregate litigation, the way a claims process normally does these things? Is there nothing within the current set of rules or statutory jurisdictions that allows that?
I mean, I think the main common issue has already been decided — whether the tariffs were unlawful. The Supreme Court has already rendered its decision about that.
Now, there may be other arguments the government makes about why it doesn’t have to pay the money back. I tend to think those are quite weak arguments, but it may make some arguments about, well, equitably speaking it’s too much money for the government to have to pay back. There have been some gestures about that from the administration. So that could be a common issue as well.
But as is often the case in class action law, the liability issues are common — but the question of predominance really comes down to the relief.
Right. So that suggests to me one of two things. Either — and again I’m speculating — a lot of potential plaintiffs aren’t going to sue, because the money they might get back, discounted by the probability of recovery, will be dwarfed by litigation costs. That would mean the firms that paid a whole lot of money are going to bring the suits.
Or, if there can be a fast-track representative case that produces universal relief in the Supreme Court, that might be a way of getting broader refund relief.
A third option seems unlikely to me: that Congress could impose some process to expedite all this stuff.
Yeah. I’ll address your third possibility first. That’s clearly the best outcome — and I think there is approximately zero chance of it happening as long as President Trump is president. Any legislation Congress passed, even if it were willing to do it, you have to think the president would veto. So I think that the best solution here — that Congress creates a streamlined administrative process — is probably off the table for political reasons.
Then we get to whether smaller importers — those who don’t already have trade counsel at outside law firms — will have effective access to relief. And even within that, I think there are two categories that are worth breaking out. The first category is, you know, if it turns out that filing a lawsuit in the Court of International Trade is necessary, there's a $400 filing fee.
And so there are going to be some importers where, even if they had pro bono legal representation, you know, there are going to be tens of thousands of — you know — small, small, small importers. You know, somebody who has an Etsy shop or something like that, where it literally is not going to be worth paying the filing fee to get their money back. And that seems like a remedial failing.
But even if you're above that, then you're going to have the range of importers where it does make sense for them to pay the filing fee. And the question is going to be the structure of the legal profession's ability to provide that representation in a cost-effective way. And that's a very serious problem, because trade law is a specialized practice. And, you know, the big firms are really expensive.
So do you have — is there any way for you to guesstimate? The answer is probably no, but I’m going to ask you if you can do it anyway. I mean, what percentage is it? Again, this is maybe impossible to assess, but what percentage might we be talking about of potential plaintiffs who were assessed these tariffs that just is not going to — probably not going to — be cost-effective to try to get refunds? Is there any way to know that number or percentage?
The best information that we have on this — the best data — is that the thousand importers that had the highest volume of tariff payments account for approximately 80 percent of the total dollar value. And so if we do the math and just pick the midpoint of the estimates — let’s say there’s been $150 billion dollars’ worth of tariffs collected since the beginning of 2025 — that means that there’s $125 dollars that goes to these big companies that presumably have their trade counsel and they’re going to be fine. And then there’s another $30 billion dollars that is going to everybody else.
Now, some of those at the top end — you know, the thousand-and-first-largest importer — maybe they can hire a Wall Street law firm. But there’s going to be — you know — I think it’s fair to say tens of billions of dollars that the government has taken illegally. And there’s a real question about whether the importers are going to be able to, as a practical matter, get that money back.
And are the thousand big firms that you just talked about — are they the ones largely who have already brought suits last fall?
Interestingly, no. And this goes to some of the issues that you and Bob have talked about more generally. So there are some big companies like Costco, for example, who brought suit. But a lot of them are smaller companies, and interestingly ones that are owned by private equity firms.
The big companies — the biggest, biggest payers — Walmart, Amazon, and so on, have not filed, too. Now, the reason why is they didn't need to. It was not yet time where they needed to take a public stand. And notice that the plaintiffs in Learning Resources — it was Learning Resources, you know — and then one of the other cases was brought by a small clothing company called Princess Awesome that makes sort of little girls' clothes — that's sort of positivity about Wonder Girl.
And these are small businesses. And the best guess that I can give about why that is is that large corporations like Walmart, like Amazon, have been concerned about the possibility of retribution from the administration.
Yeah. And I take it — that’s what I would have assumed before you said it. And that’s happened in other contexts. I wonder — do you — is there any sense in the news about how these big companies that could get potentially large refunds are thinking about the financial gains versus the political and retributive costs?
I think the best indication that we have is that the trade associations are already issuing press releases calling on the federal government to give immediate refunds — you know, holding aside the fact whether that was even possible. But, you know, the fact that the trade associations are out there now speaking clearly — you know, we don't yet have press releases from Walmart. But, you know, I think that, you know, before they thought it was maybe unnecessary for them to stick out their nose. But now, you know, this could be $10 billion for Walmart. I think that's just — yeah — it's real money. And so I don't think that they're going to just let it slide.
Yeah. OK, what else — what else haven’t we discussed that’s important in understanding this issue? Is there anything else?
I mean, the only other thing that I think is really important here is — well, I’ll say two things. The first is that these administrative exhaustion requirements — the Court of International Trade has been a little bit wishy-washy. And actually, in the AGS case that we talked about before — which was the Costco, etc., those other companies had sued in December.
The court, when it denied the motion for an injunction, said essentially that there was an avenue for judicial review that didn’t require protesting. And that draws on a line of cases going back about 25 years in the Court of International Trade and the Federal Circuit that suggested that this protest administrative exhaustion requirement was at least sometimes optional if it was futile. Now — and the argument here is that protesting would be futile because CBP was just following orders from the executive order.
Now, I think that futility argument is weaker now than it was before, because the executive order has been determined by the Supreme Court to be unlawful. But even beyond that, there’s a lot of Supreme Court precedent that says that when you have a statutory exhaustion requirement, it’s mandatory. And courts can’t carve out exceptions to that. So I think that there’s a significant risk that what the Court of International Trade has already said about these cases is actually going to get reversed on appeal.
So let me ask you one final question. Politico said in the story in the last couple of days — I'm just going to read from it — the Justice Department and parties in the tariff litigation have already asked the Court of International Trade to establish a steering committee to coordinate the more than 1,000 refund-related cases now pending. A common step in large, complex trade disputes. Was that the Rule 23 process you were talking about earlier, or is that something else?
No, that’s something else. And this is something that is borrowed from the multidistrict litigation process for mass torts. And so these are cases where — so the most famous recent one is there’s a military base, Camp Lejeune, where there were toxic chemicals, and some tens of thousands — maybe even hundreds of thousands — of service members and their families were exposed to these toxic chemicals and got a variety of forms of cancer.
Now, this can’t be a class action, because every case has — you know — you have to have the medical records for every case, et cetera. So they’re individual cases, but they get grouped together in one court that then handles all of these cases and comes up with a judicial administrative process to make it more efficient. And it often — so the process often involves picking what are called bellwether cases to go to trial first.
Now, in these tariff cases, there’s not going to be a trial, but it makes sense that they would litigate one or just a handful of cases first to see what the government’s defenses are, and then sort of come to a judicial determination about whether those defenses are valid, whether it has to go to the Supreme Court again or not. And then whatever the legal resolution of those cases, those bellwether cases would just apply to all of the other cases that had been filed in court. But that still requires everybody to file a lawsuit.
Right. So last question — and it's a bit of a wrap-up, but it may be repetitive. So one question is: who can take the initiative? Which institution can take the initiative to make this more efficient and more fair — this process of refunding the illegally collected, the illegally collected moneys?
Congress could do so, but it's not going to. The Trump administration could maximally refund unilaterally within whatever the law permits it to. Probably unlikely, I'm guessing. We've just been through a couple of different alternatives that the Court of International Trade might pursue. We've talked about a fast-track case in the Supreme Court, which might be able to give a type of universal relief. Is there anybody else in the system anywhere that could improve this process, or are those the options?
Those are the options, as best I can tell. You know, I think it's worth underscoring again — Congress could fix this problem, but Congress and the president won't do it. CBP could, as you say, maximally within the procedures and legal framework that exists right now. You know, it's remarkable — CBP is, as of today, still assessing IEEPA tariffs because they haven't issued new guidance. And it's not until they issue new guidance that they'll stop assessing IEEPA tariffs. And so, you know, the level of administrative — let's just say slow walking — is remarkable.
Yeah. OK, thank you very much, Matthew. That was elucidating.
Thanks, Jack.
