You (Probably) Won’t Get a Tariff Refund

Key Points:

• The Supreme Court invalidated $166 billion in tariffs imposed under the International Emergency Economic Powers Act (IEEPA), but left unresolved how to refund the illegally collected tariffs, leaving the issue to lower courts and agencies.
• The U.S. Customs and Border Protection (CBP) launched the Consolidated Administration and Processing of Entries (CAPE) system to handle refunds, but its complex, bureaucratic process requires importers to file detailed claims, likely excluding many small businesses and delaying payouts.
• Many refund claims have already been rejected or subjected to strict scrutiny, with CBP potentially reducing amounts owed or imposing penalties, creating uncertainty and additional costs for importers.
• Consumers are unlikely to receive direct refunds as tariffs are refunded to importers of record; some companies are voluntarily passing refunds to customers, but many consumers will not be fully compensated.
• Larger firms and Wall Street investors stand to benefit from the refund process, while smaller businesses and taxpayers face significant burdens, including administrative costs and growing interest payments on delayed refunds.