President Donald Trump has warned of disaster if the Supreme Court overturns his signature tariffs. For starters, it would unleash a bureaucratic nightmare involving reams of refund paper checks.

Should Trump’s country-based tariffs be deemed illegal, the U.S. could owe the bulk of the $165 billion in customs duties collected so far this fiscal year back to companies that paid them. But they won’t have an easy time getting their money back; refunds are typically issued slowly with paper checks and while the administration could streamline the process to repay the funds en masse, experts fear that’s unlikely.

Trump has coveted the revenue from tariffs, saying they have made the country “very rich again.” The president and his allies have floated using the money to carry out policy objectives, including paying down the national debt, funding aid for beleaguered farmers and perhaps even cutting so-called rebate checks for Americans.

That means Trump likely won’t part with the funds easily if the tariffs are struck down, and the administration is expected to move quickly to reimpose levies using other legal authorities if that happens. The Supreme Court is expected to hear arguments in November in the case.

“Customs isn’t just going to hand importers a bunch of money,” said Lynlee Brown, global trade partner at EY.

The suspense over whether — and how — refunds might be issued marks the latest example of uncertainty that has gripped companies and financial markets since Trump launched his tariff regime.

Some importers are writing off the possibility of ever getting their money back if the court rules in their favor.

“I have zero faith we’d ever get anything. Just zero,” said Harley Sitner, owner of Peace Vans, a classic camper van repair and restoration shop based in Seattle.

For Sitner, the unpredictability of Trump’s trade war is worse than paying the duties, which he considers a “sunk cost.” After receiving a string of surprise tariff bills totaling anywhere from $221 to $17,000, sometimes months after the goods were received, Sitner recently stopped bringing in overseas inventory.

“Just yesterday we got a small shipment from Germany worth $2,324 and it came with a $1,164 tariff charge. We can’t back out,” Sitner said.

Some customs brokers have said they’ve been contacted by Wall Street firms interested in buying claims to refunds, which would allow importers to recoup at least a fraction of the money they might be owed.

Paper checks

Most of the jump in customs duties — up $95 billion from the year before — is thanks to Trump’s levies on imports from dozens of economies that went into effect in August, according to a Bloomberg Economics analysis. Two lower courts have already ruled Trump was not permitted to impose tariffs under the law he cited: the International Emergency Economic Powers Act.

Roughly half of the customs duties the U.S. has collected this year could be refunded if the Supreme Court upholds those rulings, and thus far it’s unclear what businesses would need to do to get their money back. Even though the government is shut down, agencies have continued most operations related to tariffs.

U.S. Customs and Border Protection routinely approves refunds to importers who overpay, or in the case of rule changes, and then the Treasury Department cuts the checks. But it isn’t automatic.

Importers — or customs brokers on their behalf — must choose the right process based on a strict, and sometimes unclear, timeline then file the right paperwork on a strict schedule in order to preserve their right to a refund. On top of that, the vast majority of refunds are still issued by paper check.

While the Trump administration earlier this year required Treasury to phase out check payments by Sept. 30, CBP only rolled out the first step last Tuesday in what is expected to be a multi-stage process. Without a concerted effort to speed things up, the system is unlikely to be ready in time for a court ruling.

Because of that, if refunds occur, “it’s possible that we’ll see millions and millions of paper checks being mailed out because each shipment, each customs entry, will have its own,” according to Tom Gould, a Seattle-based customs consultant.

The White House did not respond to requests for comment and CBP declined to comment.

Mail theft

That could get messy. Customs will only send refunds to approved domestic banks in dollars, so foreign importers could only get their refunds via international mail or via a broker’s account in the U.S.

There’s also been a spree of stolen checks over the past few years, where refund checks were diverted in the mail and sold on the dark web before getting cashed, Gould said.

There are ways for the administration to speed up refunds, including by processing claims automatically based on data already in its system. CBP has streamlined refunds before.

Customs agents built a system to more easily issue refunds for goods that qualified for duty exemptions under a program called the Generalized System of Preferences, which Congress has let lapse several times since the 1980s before retroactively renewing it.

Importers would include certain codes that alerted Customs the goods should qualify for GSP, even when the program wasn’t technically active. The agency could mine its own data in a similar way this time to identify tariffs paid under relevant IEEPA codes, Gould said.

Bureaucratic hoops

Of course, there are ways the administration could make things more difficult. Some experts say each importer may ultimately have to file their own lawsuit to get their money back.

Importers could be required to file what’s called a protest or post-summary correction, along with proof of every payment made and copies of all the importer-data that the government already has.

EY’s Brown has advised importers to save all data from CBP’s Automated Commercial Environment platform and log each entry date and other deadlines in order to boost their chances of getting money back.

Even if CBP went the easy route, the layers of financial transactions along the supply chain will complicate things.

For importers using commercial couriers including FedEx Corp. and United Parcel Service Inc. to handle paperwork and tariff payments on their behalf, CBP would issue the refund to the importer of record — that’s the parcel handler rather than the owner of the goods.

That could create issues between the actual importers and the couriers, another potential barrier for businesses to get their money back.

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—With assistance from Daniel Flatley, Skylar Woodhouse and Adrienne Tong.

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