American companies getting tariff refunds

Rachel Barber

USA TODAY

American importers who paid tariffs the Supreme Court ruled illegal are working to secure refunds from the federal government – but shoppers likely won’t get their money back.

In February, the nation’s highest court struck down tariffs President Donald Trump imposed under the 1977 International Emergency Economic Powers Act. U.S. businesses who paid those fees can apply for refunds through a Customs and Border Protection portal.

Court filings show those refunds could total roughly $166 billion, as more than 330,000 importers paid tariffs on more than 53 million shipments.

While companies shouldered much of those costs, at least some were passed to shoppers through higher shelf prices. Still, consumers aren’t likely to see direct refunds or lower prices now, according to Jackson Wood, director of industry strategy for Descartes’ Global Trade Intelligence business unit.

'Paying those tariffs blew a giant hole in their profit-loss statements, and so recapturing those duty payments is really going to be about making their businesses whole,' Wood said. 'It’s unlikely to bring much relief to the U.S. consumer any time soon.'

And new tariffs from the Trump administration − along with higher oil prices tied to the Iran war − are likely to keep prices elevated.

Two prominent companies have pledged to help pass some relief to consumers should they receive refunds.

FedEx has said it intends to issue refunds to customers in cases where the company acted as a customs broker once it begins receiving refunds, which could take time.

In March, Costco CEO Ron Vachris said the discount giant would pass any recovered refunds to members through lower prices and better value, though he added the future impacts of tariffs 'remain extremely fluid.'

'We haven’t heard from anybody else,' said Rohit Tripathi, vice president of industry and CPG manufacturing at RELEX. 'Prices are unlikely to drop in the near term.'

Shika Jain, a partner at consultancy Simon-Kucher, said companies are aware some consumers are pulling back on spending, which might lead them to lower prices. But, she said, that’s not usually what happens because 'when you drop prices, you don’t see a lot of volume or traffic in the store.'

And tariffs have continued. After the Supreme Court struck down the IEEPA levies, Trump quickly acted to replace them under section 122 of the Trade Act of 1974, imposing a 10% tariff on nearly all items imported into the United States.

Those tariffs will expire at the end of July. From there, the Trump administration has a plan to reinstate tariffs near or at IEEPA levels, according to Drew DeLong, head of corporate statecraft in Kearney Foresight.

In March, U.S. Trade Representative Jamieson Greer announced Section 301 investigations into China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India.

The U.S. government has launched an online portal for companies to claim refunds for tariffs invalidated by the Supreme Court in February.

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