How Do You Refund $166 Billion?

Summary

---

The Journal.

Episode: How Do You Refund $166 Billion?
Date: April 2, 2026
Hosts: Ryan Knudsen & Jessica Mendoza
Guests: Lydia Wheeler (WSJ Legal Affairs Reporter)
Produced by: Spotify Studios & The Wall Street Journal

---

Episode Overview

This episode explores the unprecedented legal and logistical challenge facing the U.S. government after the Supreme Court declared most of President Trump's tariffs illegal. Now, courts, companies, and the government itself must grapple with the question: How do you refund $166 billion to thousands of businesses? The story centers on the largely unknown Court of International Trade, the enormous scope of the refund process, and the companies desperately awaiting money that could save or rebuild their businesses.

---

Key Discussion Points & Insights

The Supreme Court’s Tariff Decision & Its Consequences

• Supreme Court Left Refunds Unaddressed

  • The Supreme Court ruled Trump’s tariffs illegal but didn’t specify what should happen to the money already collected.
  • Quote: "What did the Supreme Court say about tariff refunds?" — Ryan Knudsen (00:05)
  • Quote: "It said nothing." — Lydia Wheeler (00:20)

• Massive Financial Stakes

  • Companies paid the government $166 billion in tariffs—now they want their money back.
  • Quote: "Is this like the most complicated refund in history?" — Ryan Knudsen (00:36)
  • Quote: "It is a lot of money… the federal government has never been told that it has to give back that much money before." — Lydia Wheeler (00:40)

Enter: The Court of International Trade

• A Little-Known but Suddenly Crucial Court

  • The Court of International Trade (CIT), located in Manhattan, usually handles only a few hundred technical trade disputes a year.
  • Now, it's responsible for processing over 3,000 nearly identical lawsuits for refunds.
  • Quote: "Less than 300 cases were filed there each year in 2023 and 2024." — Ryan Knudsen (04:25)
  • Quote: "The whole purpose... is to settle disputes over goods that come into the country… they mostly handle claims over tariffs." — Lydia Wheeler (04:34)

• The Trump Effect: Making Trade Law ‘Cool’

  • Trump’s broad tariffs led to a flood of litigation, turning trade law into a hot field.
  • Quote: "Trump has done for trade lawyers what no one thought was possible, which has, like, made them very cool." — Lydia Wheeler (05:22)
  • Quote: "Make trade law cool again." — Ryan Knudsen (05:32)

The Judge at the Center: Richard Eaton

• Judge Eaton’s Unexpected Spotlight

  • 77 years old, semi-retired, and previously a low-profile figure, Judge Eaton now finds himself in charge of $166 billion in refunds.
  • Quote: "He now kind of holds the fate of like $166 billion in his hands." — Lydia Wheeler (07:39)

• Atmos Filtration: The Case That Jumped the Line

  • Most refund cases are cut-and-paste affairs, but Atmos Filtration, a small Nashville company, requested emergency intervention. This pushed its case—and thus all similar cases—to Judge Eaton.
  • Quote: “Because of this emergency request, Atmos Filtration kind of jumped the line and its case fell to a judge named Richard Eaton.” — Ryan Knudsen (06:57)

The Legal Showdown: First Hearing

• Judge Eaton’s Direct Approach

  • Judge Eaton presided over a packed courtroom, displaying both his authority and his skepticism toward government excuses for delay.
  • Quote: "All 2,000 cases to me." — Judge Richard Eaton (08:21)
  • Quote: “We live in the age of computers. It must be possible for the Customs Service to program its computer so it doesn’t need a manual review.” — Judge Richard Eaton (09:48)

• Government Pushback

  • Government lawyers argued that the process will be complex, involving manual review of tens of millions of entries and significant system overhauls.
  • Quote: "There are tens of millions of entries..." — Government lawyer via Lydia Wheeler (09:28)

• A Bold Ruling From the Bench

  • Judge Eaton was unconvinced by government’s pleas for more time and ordered them to begin refunds, a decisive move that surprised the legal community.
  • Quote: "Judge Eaton is moving at a speed not typically seen at the trade court." — Lydia Wheeler (10:35)
  • Quote: "I had lawyers, trade lawyers, tell me that it was the order that they were really hoping for, but never thought that they would see." — Lydia Wheeler (10:53)

The Practical Challenges of Refunds

• Government Systems Not Ready

  • Customs does have some refund systems, but not for such a huge, sudden outflow. System upgrades are needed for mass refunds.
  • Judge Eaton is willing to grant some time but insists on progress.
  • Quote: "You owe this money back." — Lydia Wheeler relaying Judge Eaton (12:58)

• Complex, Labor-Intensive Process for Businesses

  • Companies are being told to prepare detailed spreadsheets of tariffs paid, submit them, and wait for customs to verify each claim.
  • Small and medium companies fear the burden and complexity.
  • Quote: “They're frustrated because they're saying, hey, Customs already has a system that’s kept track of all of this. Like, how come they can't just do it themselves?” — Lydia Wheeler (13:38)
  • Quote: “Shouldn’t the government have a record of how much money it’s collected?” — Ryan Knudsen (14:00)

• Additional Legal Minefields

  • Some customers (like Costco shoppers) are now suing companies seeking a share of the refunds, under promises that benefits would be passed on if tariffs were reversed.
  • Quote: "Consumers going to court...saying, once you get a refund, we want you to pass that money back to me." — Lydia Wheeler (14:30)

• New Litigation Around New Tariffs

  • As refunds for old tariffs are sorted, the Trump administration is imposing new tariffs under a different authority, sparking more lawsuits.
  • Quote: “Now you have new lawsuits challenging those new tariffs...” — Lydia Wheeler (15:06)

Real-World Business Impact

• Lingering Financial Pain

  • Many businesses, even if they get their refunds, will take years to recover from the economic harm caused by the tariffs.
  • Quote: “Even once I get my money back, like, it's still going to take me some years to get back into the black.” — Business owner via Lydia Wheeler (16:21)

• The Process May Dissuade Some Companies

  • The refund process may be so time-consuming and complex that some businesses won’t pursue claims.
  • Quote: “This is messy, and the process...looks cumbersome. And they're worried that some companies are just either not going to do it correctly or...that it's going to be too burdensome...” — Lydia Wheeler (15:47)

---

Memorable Quotes & Moments

• On the scope and uniqueness of the case:

  "The federal government has never been told that it has to give back that much money before."
  — Lydia Wheeler, 00:41

• On Judge Eaton's attitude:

  "We live in the age of computers. It must be possible for the Customs Service to program its computer so it doesn’t need a manual review."
  — Judge Richard Eaton, 09:48

• On the aftermath for businesses:

  "Even though we have that, even once I get my money back, like, it's still going to take me some years to get back into the black."
  — Business owner via Lydia Wheeler, 16:21

• On trade lawyers’ new fame:

  "Make trade law cool again."
  — Ryan Knudsen, 05:32

---

Important Timestamps

• 00:05–00:41: Supreme Court’s ruling and the unprecedented refund question
• 03:51–05:41: Introduction to the Court of International Trade and its typical work
• 06:16–08:01: Atmos Filtration’s emergency case and background on Judge Eaton
• 08:47–10:22: First hearing; Judge Eaton’s decisive stance and rejection of government’s excuses
• 12:25–13:35: Government’s logistical struggles with refunds; the newly required process for claimants
• 14:19–14:59: Lawsuits from consumers against companies expecting tariff refunds
• 15:06–15:34: New tariffs mean new lawsuits—legal chaos continues
• 16:10–16:21: The long-term impact on affected businesses

---

Tone and Style

The episode mixes disbelief, dry humor (about "making trade law cool"), and a sense of urgency around the real financial pain and massive bureaucracy. Judge Eaton’s brisk, no-nonsense approach stands out, as does the dismay and skepticism among businesses and lawyers.

---

Summary Takeaway

The episode demystifies an enormous bureaucratic and legal challenge: returning $166 billion in illegal tariff payments to U.S. companies. The little-known Court of International Trade and its unexpectedly prominent judge are now at the center of a financial and legal storm, with businesses desperate for relief, logistical challenges complicating the process, and fresh waves of lawsuits ensuring the saga is far from over. As the hosts note, even a clear court victory is only the beginning for the businesses battered by tariffs—and the mess may get worse before it gets better.

Transcript

[Ryan Knudsen]

In February, when the Supreme Court declared the lion's share of President Trump's tariffs illegal, the justices left one big question unanswered. What did the Supreme Court say about tariff refunds?

[Lydia Wheeler]

It said nothing.

[Ryan Knudsen]

That's my colleague, Lydia Wheeler. Ever since Trump's sweeping tariffs, companies big and small have altogether paid the government billions of doll. And now a lot of them want their money back. Is this like the most complicated refund in history?

[Lydia Wheeler]

It is a lot of money. It is $166 billion. So, you know, the federal government has never been told that it has to give back that much money before. And so what happened is the Supreme Court left it to lower courts to hash all that out,

[Ryan Knudsen]

figuring out who gets refunds and how a complicated job. And that job has fallen to a little known trade court and a little known judge.

[Lydia Wheeler]

All of this has put a big spotlight on a little tiny court that no one really knows about and even lawyers often forget exists. And also a very interesting judge who's 77 years old and semi retired and is now the one like at the helm of figuring out how all these people are going to get their money back.

[Ryan Knudsen]

What's at stake here to get this right?

[Lydia Wheeler]

I mean, we talk to companies who kind of the tariffs put them in a crisis and there are a lot of companies that are really desperate to get their money back.

[Ryan Knudsen]

Welcome to the Journal, our show about money, business and power. I'm Ryan Knudsen. It's Thursday, April. Coming up on the show, why is it so hard to give businesses their tariff money back?

[SAP Advertiser]

This episode is presented by SAP. Your company's ambitions can't be held back by long implementations, surprise costs or empty AI promises. SAP Grow AI Cloud ERP gets you live fast, keeps pricing predictable and delivers built in AI that gets results the first day, not someday. All on a single platform that's easy to manage, industry ready and designed to scale with your business. Bring it with SAP Grow AI Cloud ERP for any size business. SAP.com grow if you've been diagnosed with

[Nordstrom Rack Advertiser]

moderate to severe plaque psoriasis. This is what it sounds like to be a million miles away. Imagine being a million miles away. Trimfya Kucelcomab, taken by injection is a prescription medicine for adults with moderate to severe plaque psoriasis who may benefit from taking injections or pills or phototherapy with Tremphya. Clearer skin is possible. In clinical Trials, at least 70% of patients saw at least 90% clearer skin at 16 weeks. Results may vary. Trinfya is also indicated for adults with Active psoriatic arthritis, serious allergic reactions and increased risk of infections and liver problems may occur. Before treatment, your doctor should check you for infections and tuberculosis. Tell your doctor if you have an infection, flu like symptoms, or if you need a vaccine. Tap this ad to learn more about Tremphya, including important safety information.

[Ryan Knudsen]

So introduce us to this little court that has to figure all this out.

[Lydia Wheeler]

Right, so this is the Court of International Trade. It's in Manhattan. It sits across the street from the New York Supreme Court, which is regularly featured on Law and Order. They often do scenes on the front steps of, you know, the New York Supreme Court. Well, right across the street in this other federal court complex is this very modern looking smaller building called the Court of International Trade, where these really technical disputes over trade are hashed out.

[Ryan Knudsen]

The Court of International Trade isn't usually a very happening place. Less than 300 cases were filed there each year in 2023 and 2024.

[Lydia Wheeler]

The whole purpose of it is to settle disputes over goods that come into the country. They mostly handle claims over tariffs, things that are charged the wrong amount, how things are classified. Every good that comes into the country is given some sort of a classification which determines what duties are owed. And so there are sometimes really technical disputes about, you know, hey, is this glass jar really a glass jar or not?

[Ryan Knudsen]

Until recently, one of the court's blockbuster cases focused on whether video doorbell cameras should be considered digital cameras or transmission devices. Scintillating stuff. But all that changed a year ago when President Trump imposed sweeping tariffs on nearly every nation.

[Lydia Wheeler]

You know, I keep joking that President Trump has done for trade lawyers what no one thought was possible, which has, like, made them very cool. They've got all the biggest cases, and

[Ryan Knudsen]

so I could see that on a hat. Make trade law cool again.

[Lydia Wheeler]

Yeah, he totally made trade law like the big thing. This is where all the litigation is happening.

[Ryan Knudsen]

After Trump's tariffs, companies flooded the Court of International Trade with lawsuits arguing that the administration's tariffs were illegal. And now that the Supreme Court has sided with these companies, the Court of International Trade has to deal with more than 3,000 refund requests.

[Lydia Wheeler]

All these lawsuits are largely carbon copies of one another. They're basically copy and paste jobs, except for they have different attorneys and the company name is different. But they all say about the same thing, like, hey, you know, Supreme Court ruled this and you owe me money.

[Ryan Knudsen]

But one company called Atmos Filtration did something in its lawsuits that the others didn't. It asked for emergency intervention and said it was owed over $11 million in tariff refunds. Do we know anything about Atmos Filtration?

[Lydia Wheeler]

So we don't know much about Atmos Filtration. They are a small Nashville based company.

[Ryan Knudsen]

I'm looking at their website. We provide filters, coolant and chemical products that extend equipment, service life and reduce total cost of ownership. Filtration you can trust. Anyway, because of this emergency request, Atmos Filtration kind of jumped the line and its case fell to a judge named Richard Eaton.

[Lydia Wheeler]

So Judge Richard Eaton is 77 years old. He's semi retired. He took senior status in 2014, which typically means that the judge hears a lighter caseload. He was appointed to the court in 1999 by President Bill Clint. So he's been on the court for quite some time. And you know, lawyers who argue before him say that he's really decisive, but he's very practical.

[Ryan Knudsen]

So he sounds like he's somebody who's gone from being a, with all due respect, a very obscure figure in the legal world who was like about to ride off into the sunset to now being one of the most important judges in all of trade law and almost the country.

[Lydia Wheeler]

Absolutely. He now kind of holds the fate of like $166 billion in his hands.

[Judge Richard Eaton]

United States Court of International Trade is now in session. The honorable Richard K. Eaton presiding before court number 2601259, Atmos Filtration, Inc. Versus the United States.

[Ryan Knudsen]

Last month, Judge Eaton held his first hearing in the Atmos filtration case.

[Judge Richard Eaton]

Please sit down everyone.

[Ryan Knudsen]

At the hearing, Judge Eaton made it clear just how much power he had.

[Judge Richard Eaton]

Now the chief judge has indicated to me that he's going to assign

[Ryan Knudsen]

all

[Judge Richard Eaton]

2,000 cases to me.

[Ryan Knudsen]

That number of cases is now up to 3,000, by the way.

[Lydia Wheeler]

So since all the cases are very similar, he's the one that's saying, you know, I'm handling all of this and all of this refund litigation. All of these cases that are similar have now been assigned to me.

[Judge Richard Eaton]

Law is clear that the IEEPA duties were unlawfully imposed and were therefore void from the moment of their imposition.

[Lydia Wheeler]

Right away, Judge Eaton is like, listen, you have to pay this money back and it shouldn't be that hard. You all have done this before. You have the tools you need. Just start issuing refunds. This should be easy.

[Judge Richard Eaton]

I believe that there will be no chaos associated with the provision of these refunds and that it will not result in a mess.

[Lydia Wheeler]

And the government was like, wait, wait, wait, this is actually going to be more complicated than you think. And we have to create a system, and we can't just push a button and give everybody refunds.

[Ryan Knudsen]

Here's the government's lawyer explaining why they thought it would be so hard.

[Lydia Wheeler]

There are tens of millions of entries,

[Judge Richard Eaton]

and so obviously that is going to

[Lydia Wheeler]

require a significant effort.

[Ryan Knudsen]

At one point, the government's lawyer suggested that the process would require a person to manually review each payment. Judge Eaton didn't seem to buy that argument.

[Judge Richard Eaton]

We live in the age of computers. It must be possible for the Customs Service to program its computer so it doesn't need a manual review.

[Lydia Wheeler]

You know, Judge Eaton kind of held firm in saying you owe these companies their money back. The Supreme Court was very clear that these were collected illegally, and you have to work out a process and a

[Ryan Knudsen]

system for this Crimea River. Basically.

[Lydia Wheeler]

Yeah, he wasn't hearing it.

[Judge Richard Eaton]

I'm going to issue an order.

[Ryan Knudsen]

Judge Eaton was so unpersuaded by the government's arguments that he did something pretty bold. He issued a ruling straight from the bench.

[Lydia Wheeler]

Judge Eaton is moving at a speed not typically seen at the trade court. He issued a ruling requiring the government to kick off the refund process. During that March hearing, when Judge Eaton

[Ryan Knudsen]

made that order from the bench, which was basically, okay, just go do it, was that a surprise?

[Lydia Wheeler]

I had lawyers, trade lawyers, tell me that it was the order that they were really hoping for, but never thought that they would see.

[Ryan Knudsen]

But despite Judge Eaton's speedy ruling, it still might take a long time for companies to get their money back. That's next.

[Pepsi Advertiser]

Refreshing Wild cherry cola meets smooth cream. The treat you deserve. Pepsi Wild cherry and cream. Treat yourself so good, so good, so good.

[Nordstrom Rack Advertiser]

New spring arrivals are at Nordstrom Rack stores. Now get ready to save big with up to 60% off rag and bone. Marc Jacobs, free people and more.

[Ryan Knudsen]

How did I not know Rack has Adidas? Cause there's always something new.

[Nordstrom Rack Advertiser]

Join the NordicLub to unlock exclusive discounts. Shop new arrivals first and more. Plus, buy online and pick up at your favorite Rack store for free. Great brands, great prices. That's why you Rack.

[Ryan Knudsen]

The government actually has a system for issuing tariff refunds. But after Judge Eaton's ruling, the government said it's not quite set up for a refund as massive as the $166 billion collected in Trump's tariffs.

[Lydia Wheeler]

They're saying that their system just isn't set up to recalculate payments for this many entries kind of all at once. And so they said that, you know, we're going to have to update the system that we have in place and we're going to have to make quite a few changes, and that takes time. And so we need time. And Judge Eaton, so far at the Court of International Trade has been pretty understanding of that. He's like, okay, you need some more time, I'll give you some more time. But you still have to show me that you're making progress at this because you owe this money back.

[Ryan Knudsen]

So is there a picture now emerging for how this refund process might actually play out?

[Lydia Wheeler]

Right, so the government said that importers are going to have to basically keep a spreadsheet, create a spreadsheet of all of their imports and all of the tariffs that they paid, and make their own calculations, basically do their own accounting. And they're going to have to take that spreadsheet and upload it to this new system. And then Customs is going to go through and check them, check their work and have to validate every claim. And then once they're done with that process, then they'll get their money back.

[Ryan Knudsen]

What do companies think about that?

[Lydia Wheeler]

So some companies are already expressing fear and worry that they're not going to know how to navigate this process or that they don't have the time and the resources to go through and try to figure out all of the payments that they made. And they're frustrated because they're saying, hey, Customs already has a system that's kept track of all of this. Like, how come they can't just do it themselves?

[Ryan Knudsen]

I mean, right, because shouldn't the government have a record of how much money it's collected and who has paid them that money?

[Lydia Wheeler]

Trade lawyers are definitely making that argument. They're saying, like, why should companies be the one to have to do their own accounting when Customs has that ability to do it themselves?

[Ryan Knudsen]

Making things even gnarlier for companies is that now some of their customers are suing them and saying that if you're going to get a refund, you'd better give some of that money to us.

[Lydia Wheeler]

So we are already seeing consumers going to court to other federal courts and suing companies to say, once you get a refund, we want you to pass that money back to me. Places like Costco are being sued and they are facing class actions right now, or potential class actions from consumers that are saying, hey, I paid a higher price in the store. And Costco, you said, if you got a refund from the government, that you will make us whole. Well, we want to hold your feet to the fire on that.

[Ryan Knudsen]

And there's even more litigation on the way. First, the Trump administration might appeal Judge Eaton's order on refunds.

[Lydia Wheeler]

And then separately, President Trump said, okay, well, I'm going to come in and set new tariffs in place under a different legal justification and different legal authority. And so now you have new lawsuits challenging those new tariffs. So while we're still all trying to figure out what's owed from the other ones, we have litigation that's beginning over the new tariffs that Trump put in place right after the Supreme Court's ruling.

[Ryan Knudsen]

What an absolute mess.

[Lydia Wheeler]

Yeah, there's a lot of litigation. Right.

[Ryan Knudsen]

Is there a risk that the process is so onerous that businesses just don't do it?

[Lydia Wheeler]

Some trade lawyers are saying that that. Absolutely. That they appreciate what Judge Eaton has done, but this is messy, and the process that the government has already mapped out looks cumbersome. And they're worried that some companies are just either not going to do it correctly or that it's going to be too burdensome for some companies to do it on their own and that they won't have any other resources to try to get claims.

[Ryan Knudsen]

Yeah, for these companies, they might be happy that there's a ruling saying that the tariffs are illegal and that they are supposed to get their money back, but it doesn't really wipe away the pain that the businesses went through over the past year.

[Lydia Wheeler]

Definitely not. You know, some business owners that we spoke to said I couldn't grow, I couldn't hire more staff, which I would have been able to had it not been for this. There are others who are now in debt. They had to open lines of credit that had gone dormant. And one company I chatted with, the business owner said I had to go back to the bank and not only, like, reinstate my line of credit, but then ask for, you know, an increase in the amount that I was given because I have to pay these tariffs up front when my product comes into port. And I just didn't have the cash flow to do that. There are still companies that are. That are, like, even though I have this order that says the government owes me money, and, you know, Judge Eaton told Customs to start the refund process. Like, even though we have that, even once I get my money back, like, it's still going to take me some years to get back into the black.

[Ryan Knudsen]

That's all for today. Tuesday, April 2nd. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Louise Radnofsky and James Finnelli. Thanks for listening. See you tomorrow.

[Pepsi Advertiser]

The future of Everything is the Wall Street Journal's flagship live event, returning to New York City May 4th through 5th. Be there as CEOs, policymakers and innovators sit down with our journalists to answer the most pressing questions of the day. From finance, tech and economic policy to sports streaming and style, we're bringing together today's most compelling newsmakers for two days of conversations on what's ahead. Listeners of this podcast can access exclusive discounted rates by visiting WSJ.com future that's WSJ.com future.