On Monday, the U.S. Customs portal will start accepting refund requests from businesses that paid President Trump’s tariffs before the Supreme Court ruled them unconstitutional.
Nickolai Hammar/NPR
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Nickolai Hammar/NPR
After weeks of waiting to hear how — or whether — the U.S. government might refund the tariffs struck down by the Supreme Court, Monday is the day it finally begins.
Imagine tens of thousands of business owners with their fingers hovering over laptops, ready to enter America’s hottest new queue: the U.S. tariff refund portal.
U.S. Customs is launching just the first phase of payouts, so not all the goods imported under the illegal tariffs will immediately qualify. And the latest federal guidance says that after refund requests are approved, it could take 60 to 90 days to return the money to the importer.
Still, this marks a turning point for U.S. importers, who’ve waited for clarity for exactly two months since the U.S. Supreme Court declared most of President Trump’s tariffs unconstitutional. The high court did not opine on the process of refunds, and government officials at first suggested the process could prove unwieldy.
“Small businesses organized, spoke out, and won a major victory,” said Main Street Alliance, which advocates for U.S. small businesses, in a statement. “Now, the federal government must follow through with a refund process that truly works for Main Street.”
U.S. Customs has estimated that it owes a total of $166 billion in tariff refunds, and the agency’s legal filings suggest that the initial phase would tackle the majority of affected imports. On Tuesday, a Customs official told a judge that the vast majority of eligible importers signed up for electronic payments, as the agency is requiring, and that group is owed about $127 billion.
Will consumers see any of that money land in their pockets? Probably not, economics and legal experts say.
The cost of tariffs has been woven into the prices of many products in a way that can make it hard to separate out what customers ultimately paid. Often, manufacturers, suppliers, importers, retailers and shoppers all absorb costs along the way. And with tariffs landing on the heels of historic inflation, companies big and small have argued that they ate much of the cost to avoid spooking shoppers with higher prices.
In fact, many retailers find themselves in a similar quandary because tariff refunds will go to whoever paid the actual customs bill. It’s unclear how, or if, the refunds might trickle down to store owners who paid tariff surcharges to their suppliers.
“As a retailer, I didn’t pay tariffs directly. However, I did pay them indirectly in the form of higher wholesale prices,” says Joe Kimray, owner of B & W Hardware in North Carolina. Most of his products are either made abroad or use imported parts.
“I plan to have conversations with a number of manufacturers and hope that they will do the right thing and share some of the tariff refund money with us,” he says. “I don’t expect to get a direct refund check from anyone, but it could be even as simple as offering discounts on the wholesale cost of future product purchases.”
Shoppers hoping to recoup their own tariff expenses have launched class-action lawsuits against several companies, including Costco and FedEx. The shipping giant has pledged to pass down any refunds it receives. Costco’s CEO last month told investors the company would return shoppers’ money through “lower prices and better values” and would be transparent about its plans.
U.S. Customs’ initial phase of refunds will focus on tariff payments that haven’t been finalized because they technically are still under federal review. (Companies typically pay import duties as soon as their goods arrive at the border, but the complete customs review that follows can take nearly a year.) The government will continue to set up its new system, called CAPE, so that it can later on refund older, finalized tariff payments.
NPR asked U.S. Customs and Border Protection about the scale of tariff refunds it expects to handle in the first phase, including the volume of claims the agency’s new tool is prepared to handle on Monday. A CBP spokesperson in response said that CAPE was developed “to efficiently process refunds” and referred importers and brokers to the agency’s updated tariff-refund guidance.
NPR’s Scott Horsley contributed to this report.
