A U.S. Customs and Border Protection (CBP) official is scheduled to testify Tuesday in federal court regarding the government’s plan to refund approximately $166 billion in tariffs collected before the Supreme Court struck down President Donald Trump’s global tariffs on most imported goods. The ruling found that the administration had exceeded its authority by imposing the tariffs under emergency powers without congressional approval.

The hearing, held before Judge Richard Eaton of the Court of International Trade in New York, aims to clarify the government’s approach to processing and issuing refunds to importers affected by the invalidated duties. In March, Eaton ordered CBP to establish a system allowing all importers who paid these tariffs to apply for refunds with interest. However, the Department of Justice (DOJ) has challenged this directive, arguing that refund eligibility should be limited to companies involved in the more than 2,500 lawsuits contesting the tariffs. The matter is currently under review by the U.S. Court of Appeals for the Federal Circuit.

Since launching an online refund application portal on April 20, CBP has accepted $89.6 billion in claims and directed the Treasury Department to issue $20.6 billion in refunds by early June. The agency’s initial process has prioritized applications from importers whose tax assessments were either unresolved when the Supreme Court decision arrived in late February or finalized within an 80-day period beforehand.

The pace and breadth of the refund effort have been contentious. Judge Eaton summoned CBP Commissioner Rodney Scott to court to explain the agency’s timeline but the DOJ requested that a deputy appear in his stead. Eaton rejected the request, insisting on hearing from Scott himself, a demand temporarily stayed by the Federal Circuit last week. Instead, CBP’s executive assistant commissioner for trade, Susan Thomas, is set to testify.

Thomas has indicated in court filings that the agency is working on a method to process refund claims for older shipments beyond the current 80-day window but will hold off until the appeals court resolves the dispute over the scope of eligibility. She affirmed CBP’s commitment to comply fully with any final court order to reliquidate all relevant entries.

The controversy hinges on the customs liquidations process. After foreign goods enter the U.S., importers or their customs brokers estimate and pay tariffs upfront, while CBP has up to 314 days (and potentially up to four years) to finalize the duty amount. Once liquidated, importers have 180 days to contest CBP’s determination before it becomes final, typically barring further reassessment.

The five companies leading the lawsuit have argued that it would be unconstitutional to refund tariffs only to those involved in litigation, as all importers who paid the invalid levies should receive equal treatment. They have sought to certify the suit as a class action representing tens of thousands of similarly situated businesses.

The case raises broader questions about federal revenue, trade policy, and executive authority over tariffs following the high court’s rejection of emergency power usage to bypass Congress’s taxation powers. Legal experts anticipate ongoing disputes as CBP expands its refund system and the appeal progresses.