US companies cautious on Trump tariff refunds

U.S. companies that may be entitled to refunds of Trump-era import duties are approaching the process carefully, even after courts opened the door to repayment. The caution reflects two distinct risks: consumer lawsuits alleging companies already passed tariff costs on in higher prices, and concern that public disclosures about refunds could draw political attention from President Donald Trump. Recent reporting by Bloomberg, published by The Business Times on May 24, said some companies have been reluctant to say much in securities filings for that reason. The dispute centers on tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. The U.S. Supreme Court ruled on February 20 that the Trump administration’s use of IEEPA to impose those duties was unlawful, and the U.S. Court of International Trade later ordered refunds to proceed. Trade advisers and law firms say the money at stake is large, but the path to getting it back is still operationally and legally sensitive. (businesstimes.com.sg) ### Why are companies hesitating if the tariffs were already struck down? Bloomberg reported on May 24 that companies fear both lawsuits and presidential criticism if they move too publicly to reclaim the money. That has left many importers trying to preserve refund rights without saying more than necessary in public filings, according to the report carried by The Business Times and the Economic Times. (hklaw.com) Ballard Spahr said that, by March 16, at least five plaintiffs’ firms had filed four lawsuits accusing companies seeking refunds of trying to obtain an improper “double recovery.” Troutman Pepper Locke said in a March 27 note that the refund process could expose companies to consumer class actions if plaintiffs argue tariff costs were previously passed through to buyers. (businesstimes.com.sg) ### Why does Walmart keep coming up in this fight? Walmart has drawn attention because plaintiffs have already used it as a test case. An April 27 federal class action in Ohio alleged Walmart raised prices to pass through IEEPA tariff costs and could later retain tariff refunds instead of returning that benefit to shoppers. The complaint estimated the potential refund at about $10.2 billion, though the allegations remain unproven and Walmart had not yet responded in the materials surfaced by search results. (ballardspahr.com) Bloomberg’s May 24 report said recent company disclosures, including Walmart-related references, offered a glimpse into how firms are handling the issue. The reporting said companies were trying to determine not only whether they paid IEEPA tariffs, but also how much to say publicly about reimbursement expectations. (openclassactions.com) ### What exactly are the refunds for? The refunds cover duties collected under IEEPA after the Trump administration used that law to impose tariffs. Holland & Knight said the Court of International Trade on March 4 ordered U.S. Customs and Border Protection to liquidate or reliquidate covered entries without those tariffs and said the refunds applied to all importers, not only companies that had sued. (businesstimes.com.sg) Thomson Reuters Institute said only IEEPA-based tariffs are eligible for this refund process. That distinction matters because other tariffs imposed under different legal authorities are not automatically part of the same repayment track. ### How are companies supposed to get the money back? U.S. Customs and Border Protection says it is building CAPE functionality within the Automated Commercial Environment, or ACE, to handle valid IEEPA duty refund requests. (hklaw.com) The agency says the system is meant to streamline submission and processing once requests are authorized by court order or other applicable law. (thomsonreuters.com) Grant Thornton said CBP began processing some refunds on April 20 through the electronic portal. Thomson Reuters Institute separately said refunds would flow electronically to importers of record once CBP finalizes the process, making import documentation and entry data central to any claim. (cbp.gov) ### What happens next? CBP says the refund mechanism will run through ACE and CAPE, making the agency’s final process the next concrete step for importers. Companies, including retailers and other importers that paid IEEPA duties, are likely to keep weighing refund claims against disclosure, litigation and reputational risks as more cases and filings emerge. (cbp.gov) (grantthornton.com)