President Donald Trump will likely face obstacles put in place by his own Justice Department as his administration argues against refunding tariffs struck down by the U.S. Supreme Court.
The court ruled 6-3 last week that the 79-year-old president's use of an economic emergency powers law is illegal, although the majority did not say whether companies that paid more than $170 billion in duties should get their money back.
But Bloomberg reported that previous arguments from the DOJ could undermine any attempt to avoid repayment.
"After the trade court initially declared the tariffs unlawful last May, the administration cited the availability of refunds as a reason for judges to let officials keep collecting tariffs for months amid the legal fight," Bloomberg reported.
"Government lawyers wrote in court filings last summer that plaintiffs whose cases went to the Supreme Court 'will assuredly receive payment on their refund with interest' if they won," the report added. "The Justice Department hasn’t used the same definitive language in later cases, but trade lawyers said judges are likely to hold the administration to those promises."
More than 1,500 tariff refund lawsuits are already pending, which is just a fraction of the total number of companies that could come forward to demand payback, and the trade court’s docket has been filled with new cases since the Supreme Court's decision.
"The Justice Department has staked out positions in newer tariff cases that took potential arguments against refunds off the table," Bloomberg reported. "In written filings, the government said it would not oppose the trade court’s authority to order officials to recalculate tariffs — and refund the difference — after key deadlines in the customs process had passed."
The trade court made clear in a December ruling that the administration would be held at its word on that, writing the government would not be able to stake out "a contrary position” after persuading them that importers would be able to receive refunds even if their tariff obligations were finalized.
DOJ, however, told the trade court since then that the department reserved the right to challenge specific complaints for repayment even if the Supreme Court ruled against the tariffs, but they also added a caveat that caught the attention of trade lawyers.
"The Justice Department conditioned its endorsement of the trade court’s authority to order recalculations on the existence of 'a final and unappealable decision' that the government must pay refunds," Bloomberg reported. "Erik Smithweiss, a partner at Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt who is pursuing refund cases, said he wasn’t sure what legal grounds the government could offer to oppose returning money that the justices found was unlawfully taken."
"However, he said the inclusion of the 'final and unappealable' language gave the Justice Department an opening to consider all options," the report added.