FedEx wants its tariff money back. Will it actually get it?
Somewhere inside FedEx's legal department, an 11-page complaint sat finished for weeks, maybe months, waiting for a Supreme Court ruling that hadn't happened yet.
Photo: FedEx
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Somewhere inside FedEx's legal department, an 11-page complaint sat finished for weeks, maybe months, waiting for a Supreme Court ruling that hadn't happened yet. On Feb. 20, the ruling came down. On Feb. 23, the complaint was filed. By Feb. 27, more than 2,000 other companies had done the same thing.
FedEx's complaint landed in the U.S. Court of International Trade demanding a full refund of every dollar it paid under IEEPA tariff authority. Costco, Revlon, Bumble Bee Foods and EssilorLuxottica all filed similar claims through the same law firm, Crowell & Moring. Senate Democrats introduced a bill on Feb. 23 requiring U.S. Customs and Border Protection to issue refunds within 180 days.
Nobody is seriously arguing that importers aren't owed the money. The Supreme Court ruled 6-3 that IEEPA doesn't authorize tariffs. Full stop. But owing someone money and actually paying them are two different things, especially when the bill is north of $130 billion.
The size of the bill
The estimates vary, but the scale doesn't. Penn Wharton Budget Model puts total refund exposure at up to $175 billion. Yale Budget Lab pegs IEEPA collections at $142 billion through mid-December 2025. Either way, the number is unprecedented in U.S. trade law. More than 301,000 importers paid these duties over the course of roughly a year.
FedEx hasn't disclosed its own IEEPA tab. In September, the company reported an expected $1 billion hit to fiscal-year earnings from U.S. trade policies broadly, though only a portion was IEEPA-specific. Whatever the exact figure, it was large enough to justify having outside counsel on retainer and a complaint ready to file on short notice.
Getting the money back is the hard part
There's no established refund process yet. What exists is a patchwork of legal and administrative options, none of them fast.
Companies that file suit in the Court of International Trade can seek refunds through court orders. FedEx went this route. It's the most direct path, but it means waiting out years of procedural motions and government resistance. Trump told reporters the matter would have to "get litigated for the next two years." Treasury Secretary Scott Bessent has suggested the money may never come back at all.
For importers who don't file lawsuits, CBP's existing protest process is the fallback. Importers can file Post-Summary Corrections for entries that haven't been liquidated yet, or formal protests for entries that have. The deadline is 180 days from the liquidation date, with no extensions. For the earliest IEEPA entries, dating back to February 2025, some of those windows are already closing.
Meanwhile, the Liberty Justice Center, which represented some of the original Supreme Court plaintiffs, filed coordinated motions on Feb. 24 in both the Federal Circuit and the CIT to force the government's hand, asking the court to permanently bar IEEPA tariff enforcement and order refunds to begin. The Federal Circuit ordered the administration to respond by Feb. 27.
TD Securities estimates 12 to 18 months before refunds start moving in any real volume. CBP hasn't issued guidance, Congress hasn't passed legislation and more than $130 billion in claims is going to strain every part of the process.
But Bessent raised an uncomfortable question. If FedEx already passed those tariff costs through to customers via surcharges, who's actually out the money? And how does FedEx trace which customers paid what, months after the fact?
On Feb. 27, Morgan & Morgan filed a proposed class action against FedEx on behalf of a consumer who was retroactively billed for IEEPA duties on imported tennis shoes. The argument: FedEx's shipping contracts only authorize the company to collect lawful duties. Since the Supreme Court ruled IEEPA tariffs were never lawful in the first place, those charges were illegitimate from day one, and FedEx shouldn't need a government refund to make its customers whole.
FedEx is now suing the government to get its money back while customers sue FedEx saying they shouldn't have to wait. Other carriers and logistics companies that passed through IEEPA surcharges may well face similar class actions.
So will FedEx get paid?
For all the legal complexity piling up around this case, the underlying question is surprisingly settled. The Supreme Court didn't hedge: IEEPA doesn't authorize tariffs, the duties were collected without legal authority. Even Justice Brett Kavanaugh acknowledged in his dissent that the government "may be required to refund billions of dollars." When the dissent concedes the point, the legal merits aren't really in question.
Timing is another story. The Trump administration has every reason to slow-walk this. Returning $175 billion to importers is a fiscal event, and every month of delay keeps that money in the Treasury. Expect fights over standing, class certification, scope and interest.
FedEx is well-positioned: large legal budget, early filing, strong coalition of co-plaintiffs through Crowell & Moring. But even well-positioned plaintiffs don't get paid quickly in trade court. Partial refunds trickling out in late 2027 or 2028, with full resolution stretching into 2029 or beyond, is the most realistic timeline.
What this means for freight
Most coverage of the FedEx lawsuit treats it as a legal or political story. It's also a freight story, and that part is getting less attention than it deserves.
IEEPA tariffs warped freight patterns for over a year. Shippers front-loaded imports throughout 2025 to beat tariff deadlines, creating artificial volume spikes followed by inventory gluts and soft demand. Carriers and brokers absorbed that whiplash directly. The ruling doesn't undo that history, but it changes the calculus going forward.
The replacement tariffs tell the clearest version of that story. Trump initially imposed a 10% surcharge under Section 122 of the Trade Act of 1974, then raised it to 15% two days later. Even at 15%, compare that to what IEEPA imposed on Chinese-origin goods: up to 145%. That kind of drop in landed cost changes sourcing decisions. Brokers should expect RFP activity to pick up in Q2 as importers recalculate inbound freight budgets. Carriers should watch port volumes as the economics of importing shift back toward something closer to normal.
Refunds also have downstream freight implications, even at a lag. Billions of dollars eventually returning to importer balance sheets means capital freed up for inventory and capex. Mid-size importers who were squeezed hardest by IEEPA duties are the most likely to reinvest refund dollars into their supply chains.
What's still unresolved
The class action against FedEx raises a question that extends well beyond one company. If courts decide that passing through unlawful duties creates direct liability to customers, regardless of whether the government has paid up, any 3PL or carrier that collected tariff-related surcharges in 2025 should be assessing that exposure now.
Then there's the question of what comes after Section 122. Those tariffs expire after 150 days unless Congress extends them, putting the deadline around late July. The administration has said it plans to impose more durable tariffs under Section 232 and Section 301 before then. Q3 and Q4 rates and volumes depend on what that replacement regime looks like.
One practical note: any broker or 3PL working with shippers who imported under IEEPA tariffs should flag the 180-day protest deadline. CBP isn't publicizing it aggressively, and missing the window means forfeiting the refund permanently.
Where this is heading
FedEx will recover at least some of its tariff payments. That much is clear. What's not clear is when, through what mechanism, and who along the supply chain ends up whole. FedEx is suing the government, customers are suing FedEx, and the company has promised to make everyone whole through a process that doesn't have a defined structure yet. Somewhere, that 11-page complaint is just the first document in what's going to be a very thick file.
For the freight industry, the refund story will play out over quarters. The more immediate story is the regime change. IEEPA is gone, the replacement tariffs are a fraction of what came before and import economics are resetting now. The carriers and brokers paying close attention to how their shippers' cost structures are shifting will be best positioned for whatever the next tariff regime looks like.
FedEx wants its tariff money back. Will it actually get it?
Somewhere inside FedEx's legal department, an 11-page complaint sat finished for weeks, maybe months, waiting for a Supreme Court ruling that hadn't happened yet.
Photo: FedEx
Listen to this post
Speed
0:000:008:44
0:008:44
Preparing audio...
Somewhere inside FedEx's legal department, an 11-page complaint sat finished for weeks, maybe months, waiting for a Supreme Court ruling that hadn't happened yet. On Feb. 20, the ruling came down. On Feb. 23, the complaint was filed. By Feb. 27, more than 2,000 other companies had done the same thing.
FedEx's complaint landed in the U.S. Court of International Trade demanding a full refund of every dollar it paid under IEEPA tariff authority. Costco, Revlon, Bumble Bee Foods and EssilorLuxottica all filed similar claims through the same law firm, Crowell & Moring. Senate Democrats introduced a bill on Feb. 23 requiring U.S. Customs and Border Protection to issue refunds within 180 days.
Nobody is seriously arguing that importers aren't owed the money. The Supreme Court ruled 6-3 that IEEPA doesn't authorize tariffs. Full stop. But owing someone money and actually paying them are two different things, especially when the bill is north of $130 billion.
The size of the bill
The estimates vary, but the scale doesn't. Penn Wharton Budget Model puts total refund exposure at up to $175 billion. Yale Budget Lab pegs IEEPA collections at $142 billion through mid-December 2025. Either way, the number is unprecedented in U.S. trade law. More than 301,000 importers paid these duties over the course of roughly a year.
FedEx hasn't disclosed its own IEEPA tab. In September, the company reported an expected $1 billion hit to fiscal-year earnings from U.S. trade policies broadly, though only a portion was IEEPA-specific. Whatever the exact figure, it was large enough to justify having outside counsel on retainer and a complaint ready to file on short notice.
There's no established refund process yet. What exists is a patchwork of legal and administrative options, none of them fast.
Companies that file suit in the Court of International Trade can seek refunds through court orders. FedEx went this route. It's the most direct path, but it means waiting out years of procedural motions and government resistance. Trump told reporters the matter would have to "get litigated for the next two years." Treasury Secretary Scott Bessent has suggested the money may never come back at all.
For importers who don't file lawsuits, CBP's existing protest process is the fallback. Importers can file Post-Summary Corrections for entries that haven't been liquidated yet, or formal protests for entries that have. The deadline is 180 days from the liquidation date, with no extensions. For the earliest IEEPA entries, dating back to February 2025, some of those windows are already closing.
Meanwhile, the Liberty Justice Center, which represented some of the original Supreme Court plaintiffs, filed coordinated motions on Feb. 24 in both the Federal Circuit and the CIT to force the government's hand, asking the court to permanently bar IEEPA tariff enforcement and order refunds to begin. The Federal Circuit ordered the administration to respond by Feb. 27.
TD Securities estimates 12 to 18 months before refunds start moving in any real volume. CBP hasn't issued guidance, Congress hasn't passed legislation and more than $130 billion in claims is going to strain every part of the process.
But Bessent raised an uncomfortable question. If FedEx already passed those tariff costs through to customers via surcharges, who's actually out the money? And how does FedEx trace which customers paid what, months after the fact?
On Feb. 27, Morgan & Morgan filed a proposed class action against FedEx on behalf of a consumer who was retroactively billed for IEEPA duties on imported tennis shoes. The argument: FedEx's shipping contracts only authorize the company to collect lawful duties. Since the Supreme Court ruled IEEPA tariffs were never lawful in the first place, those charges were illegitimate from day one, and FedEx shouldn't need a government refund to make its customers whole.
FedEx is now suing the government to get its money back while customers sue FedEx saying they shouldn't have to wait. Other carriers and logistics companies that passed through IEEPA surcharges may well face similar class actions.
So will FedEx get paid?
For all the legal complexity piling up around this case, the underlying question is surprisingly settled. The Supreme Court didn't hedge: IEEPA doesn't authorize tariffs, the duties were collected without legal authority. Even Justice Brett Kavanaugh acknowledged in his dissent that the government "may be required to refund billions of dollars." When the dissent concedes the point, the legal merits aren't really in question.
Timing is another story. The Trump administration has every reason to slow-walk this. Returning $175 billion to importers is a fiscal event, and every month of delay keeps that money in the Treasury. Expect fights over standing, class certification, scope and interest.
FedEx is well-positioned: large legal budget, early filing, strong coalition of co-plaintiffs through Crowell & Moring. But even well-positioned plaintiffs don't get paid quickly in trade court. Partial refunds trickling out in late 2027 or 2028, with full resolution stretching into 2029 or beyond, is the most realistic timeline.
What this means for freight
Most coverage of the FedEx lawsuit treats it as a legal or political story. It's also a freight story, and that part is getting less attention than it deserves.
IEEPA tariffs warped freight patterns for over a year. Shippers front-loaded imports throughout 2025 to beat tariff deadlines, creating artificial volume spikes followed by inventory gluts and soft demand. Carriers and brokers absorbed that whiplash directly. The ruling doesn't undo that history, but it changes the calculus going forward.
The replacement tariffs tell the clearest version of that story. Trump initially imposed a 10% surcharge under Section 122 of the Trade Act of 1974, then raised it to 15% two days later. Even at 15%, compare that to what IEEPA imposed on Chinese-origin goods: up to 145%. That kind of drop in landed cost changes sourcing decisions. Brokers should expect RFP activity to pick up in Q2 as importers recalculate inbound freight budgets. Carriers should watch port volumes as the economics of importing shift back toward something closer to normal.
Refunds also have downstream freight implications, even at a lag. Billions of dollars eventually returning to importer balance sheets means capital freed up for inventory and capex. Mid-size importers who were squeezed hardest by IEEPA duties are the most likely to reinvest refund dollars into their supply chains.
What's still unresolved
The class action against FedEx raises a question that extends well beyond one company. If courts decide that passing through unlawful duties creates direct liability to customers, regardless of whether the government has paid up, any 3PL or carrier that collected tariff-related surcharges in 2025 should be assessing that exposure now.
Then there's the question of what comes after Section 122. Those tariffs expire after 150 days unless Congress extends them, putting the deadline around late July. The administration has said it plans to impose more durable tariffs under Section 232 and Section 301 before then. Q3 and Q4 rates and volumes depend on what that replacement regime looks like.
One practical note: any broker or 3PL working with shippers who imported under IEEPA tariffs should flag the 180-day protest deadline. CBP isn't publicizing it aggressively, and missing the window means forfeiting the refund permanently.
Where this is heading
FedEx will recover at least some of its tariff payments. That much is clear. What's not clear is when, through what mechanism, and who along the supply chain ends up whole. FedEx is suing the government, customers are suing FedEx, and the company has promised to make everyone whole through a process that doesn't have a defined structure yet. Somewhere, that 11-page complaint is just the first document in what's going to be a very thick file.
For the freight industry, the refund story will play out over quarters. The more immediate story is the regime change. IEEPA is gone, the replacement tariffs are a fraction of what came before and import economics are resetting now. The carriers and brokers paying close attention to how their shippers' cost structures are shifting will be best positioned for whatever the next tariff regime looks like.
