Will Businesses Get a Tariff Refund?
If the Supreme Court backs last week’s appellate court ruling, businesses could be in line for more than $200 billion in refunds of President Trump's import taxes.
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THE TRADE WARS
The tariff refund could be massive: “The majority of the sweeping tariffs President Donald Trump imposed during his second term face one final litmus test that will determine whether he can continue to levy them – and also whether businesses are eligible for massive refunds. That potentially dramatic turn in the tariff saga comes after a federal appeals court ruled on Friday that Trump unlawfully leaned on the International Emergency Economic Powers Act to impose across-the-board duties on countries. Trump had used those powers to push import tax rates as high as 50 percent on India and Brazil – and as high as 145 percent on China earlier this year.”
“American businesses have paid over $210 billion as of August 24 to cover the tariffs that U.S. courts have determined are illegal. On Tuesday, Trump acknowledged that the court’s decision, if upheld by the Supreme Court, could result in the US Treasury having to ‘give back’ tariff revenue collected. Trump told reporters Tuesday that his administration is readying an appeal to the Supreme Court, perhaps as soon as Wednesday.”
“The Supreme Court will probably take on the case during the upcoming term, which begins next month; and the tariffs in question will likely remain in effect while the appeal is heard, said Ted Murphy, an international trade lawyer at Sidley Austin. If the Supreme Court also finds Trump didn’t have the legal authority to impose tariffs under IEEPA, the administration will immediately have to cease those collections. However, it’s an open question how potential refunds would be handled, Murphy said.”
“It’s possible that the government could decide to refund the invalid tariffs to all importers who paid them, he said. Another possibility: ‘The government could also take the position that the court decision only applies to the named plaintiffs, thereby requiring importers to file their own court action.’ Or, what Murphy believes is most likely: ‘The government could also try to get the court to approve an administrative refund process, where importers have to affirmatively request a refund.’” READ MORE
