A refund system for businesses that paid tariffs which the U.S. Supreme Court ruled President Donald Trump imposed without the constitutional authority to do so is scheduled to launch Monday.
Importers and their brokers will be able to begin claiming refunds through an online portal beginning at 8 a.m., according to U.S. Customs and Border Protection, the agency administering the system.
It’s the first step in a complicated process that also might eventually lead to refunds for consumers who were billed for some or all of the tariffs on products shipped to them from outside the United States.
In a recent earnings call, Costco CEO Ron Vachris commented on the possible refunds customers could see from tariffs after the Supreme Court ruled them to be illegal.
“It is not yet clear what the process will be, what refunds, if any, will be received, and when this will happen,” Vachris said. “We’ll be transparent in how we plan to do this if and when we receive any refunds.”
Costco was one of more than 1,000 companies that filed suits in the U.S. Court of International Trade earlier this year in efforts to recoup costs from the now-illegal tariffs.
In a 6-3 decision, the Supreme Court on Feb. 20 found that Trump usurped Congress’ tax-setting role last April when he set new import tax rates on products from almost every other country, citing the U.S. trade deficit as a national emergency that warranted his invoking of a 1977 emergency powers law.
Although the court majority did not address refunds in its ruling, a judge at the U.S. Court of International Trade determined last month that companies subjected to IEEPA tariffs were entitled to money back.
How it works
Companies must submit declarations listing the goods on which they collectively put billions of dollars toward the import taxes the court subsequently struck down. If CBP approves a claim, it will take 60-90 days for a refund to be issued, the agency said.
The government expects to process refunds in phases, however, focusing first on more recent tariff payments. Any number of technical factors and procedural issues could delay an importer’s application, so any reimbursements businesses plan to make to customers likely would trickled down slowly.
Customs and Border Protection said in court filings that over 330,000 importers paid a total of about $166 billion on over 53 million shipments.
Not all of those orders qualify for the first phase of the refund system’s rollout, which is limited to cases in which tariffs were estimated but not finalized or within 80 days of a final accounting.
To receive refunds, importers have to register for the CPB’s electronic payment system. As of April 14, 56,497 importers had completed registration and were eligible for refunds totaling $127 billion, including interest, the agency said.
Will consumers see refunds?
Tariffs are paid by importers, and some companies pass on the tax costs to consumers via higher prices.
The system starting up Monday will refund tariffs directly to the businesses that paid them, which are not obligated to share the proceeds with customers. However, class-action lawsuits that aim to force companies, ranging from Costco to Ray-Ban maker Essilor Luxottica, to reimburse shoppers are winding their way through the U.S. legal system.
Individuals may be more likely to receive refunds from delivery companies like FedEx and UPS, which collected tariffs on imports directly from consumers. FedEx has said it would return tariff refunds to customers when it receives them from the CPB.
“Supporting our customers as they navigate regulatory changes remains our top priority,” FedEx said in a statement. “We are working with our customers as CBP begins processing refunds and plan to begin filing claims on April 20.”
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