As President Donald Trump imposes a new 15% tariff despite a United States Supreme Court ruling against the legal justification he used to impose sweeping global duties, the view moving forward remains murky about refunds many excise payers now expect.
A recent discussion with International Housewares Association government affairs representative Craig Brightup, CEO of The Brightup Group, made clear that the tariff outlook after the Supreme Court ruling remains nebulous.
“We lack specificity,” Brightup said.
The Supreme Court majority ruling rejecting Trump’s IEEPA tariffs didn’t mention refunds, although refunds were discussed in the oral arguments that were part of the lead-up to the ruling. As such, Brightup said, the indication is that setting up a refund process may fall to the U.S. Court of International Trade, a modestly staffed operation that could take years to process refund applications.
Although it’s difficult to say now exactly how things are likely to happen, and depending on what refund mechanism becomes available, the expense of pursuing a refund may not be worth the effort, some observers noted. A number of companies, including retailer Costco, already have filed suit to position themselves to recover tariff refunds.
In the meantime, the new 15% tariff imposed is not based on the International Emergency Economic Powers Act, the previous authorization used by the White House to impose new tariffs that was struck down by the Supreme Court on Friday. A fact sheet published by the White House stated that President Trump is invoking his authority under section 122 of the Trade Act of 1974, which empowers the President to impose an import duty for 150 days —raised by Trump to 15% on Saturday after first citing 10% on Friday afternoon — the allotted period under the statute unless Congress votes an extension. Brightup said such an extension is unlikely given tariff opposition.
In the meantime, the White House could choose not to apply the new 15% tariffs on countries that have negotiated specific trade agreements with the United States or at least not on those goods that are named in the agreement terms.
The White House noted that the exemptions included U.S.-Mexico-Canada Agreement-compliant goods from Canada and Mexico. Other goods not covered by the USMCA could be subject to the new tariffs.
In an executive order issued independent of other White House declarations that came in the wake of the Supreme Court decision, President Trump also reaffirmed and continued the suspension of duty-free de minimis treatment for low-value shipments, including goods shipped through the international postal system, which will also carry the import duty imposed under section 122.
Another remaining question is when importers need to stop making payments authorized under the IEEPA. In a February 22 posting on its Cargo Systems Messaging Service, U.S. Customs and Border Protection stated it would no longer collect duties imposed pursuant to IEEPA and subject to the Supreme Court decision for goods entered for consumption or withdrawn from a warehouse for consumption on or after 12:00 a.m. eastern time on February 24.
The Trump Administration has begun investigations to determine tariffs under Section 301 of the Trade Act of 1974, but those require country-specific justification. Section 301 empowers the U.S. Trade Representative to impose tariffs on foreign products to combat unfair trade practices. The White House noted that current tariffs subject to Section 301 include those on Chinese goods. The administration also cited Section 232 of the Trade Expansion Act of 1962, based on determinations that the quantity or other circumstances of certain imports threaten to impair U.S. national security, imposed on specific sectors, such as those on steel, aluminum and copper, remain in force.
