A potential tariff refund fight is already chaotic

Companies are suing to lock down the billions of dollars they might be owed if the Supreme Court rules against President Trump's tariffs. Why it matters: Implementing the sprawling levies at the center of Trump's economic agenda looks simple relative to the chaos of trying to undo it.This is one of the side effects of the White House's unprecedented approach to imposing economically significant tariffs: Rolling it back could be chaotic, with potential economic consequences. Driving the news: In recent weeks, a slew of household-name firms — Costco, Revlon, Bumble Bee Foods, and the maker of Ray-Ban — have sued in the U.S. Court of International Trade to secure refunds, in the event that the highest court strikes down Trump's tariffs.The intrigue: It is a milestone moment in a legal battle fought entirely by small businesses up until this point, as larger firms try to avoid the administration's ire.Even if the Supreme Court rules in their favor, there is no guarantee that the high court will issue guidance on how the refund process will work — or who is entitled to them.Between the lines: Companies like Costco are worried that a technical deadline might prevent them from receiving refunds at all: Tariffs paid are due to be liquidated by the government, making it that much more difficult for them to issue refunds."This year, [Customs and Border Protection] has been fast-tracking the tariff dollars to Treasury, which puts the question of potential rebates into question," policy analysts at TD Cowen wrote in a note Monday morning. The analysts note that the agency usually allows 314 days after goods are imported into the country to liquidate the payments and send the money to the Treasury. That window ends Monday for the first set of tariffs imposed on a slew of Chinese goods. What they're saying: "What law firms are saying to companies is, 'Look if you want to be in the front of the line for refunds, we should get these cases filed now because the court is going to deal with these cases in the order they come in,'" Tony Gulotta, a principle at the business tax firm Ryan, tells Axios. By the numbers: In a legal filing on Thursday, the Department of Justice hinted at the scale of potential refunds. Lawyers said that, as of last week, roughly $130 billion in tariffs had been collected under the International Economic Emergency Powers Act, the law Trump used to impose the tariffs now under scrutiny. Roughly 301,000 importers paid those tariffs, with 34 million entries for goods submitted to CBP.DOJ lawyers said that "contrary to plaintiffs' speculation, liquidation will not affect the availability of refunds after a final decision."The other side: The Trump administration has latched on to the potential refund chaos that would ensue as reason for allowing the tariffs to stand. "Tell me what kind of refund Costco is due if the foreign producer lowered their price" for the imported goods, Treasury Secretary Scott Bessent said at the New York Times DealBook conference. "They've taken a deduction on having paid the tariffs." The bottom line: Companies and financial markets have spent months trying to acclimate their businesses to a slew of higher import duties, ones the administration says it will replace if the Supreme Court rejects tariffs. Now these businesses are bracing for the prospect that duties might be overturned.