Notes ·
Companies Got Their Tariff Refunds. Where Is Ours?
The refunds are going to the importers of record: the companies legally responsible for paying tariffs when goods entered the United States. The Court of International Trade ordered Customs and Border Protection to return the money after the Supreme Court ruled that the president could not impose the tariffs through the International Emergency Economic Powers Act.
Legally, that makes sense. The government collected the money from importers, so those importers receive the refunds.
Economically, it is far less satisfying.
Companies repeatedly explained that tariffs forced them to raise prices. Consumers paid more for clothing, electronics, household goods, tools and nearly everything else affected by the import taxes.
Now that the tariffs have been invalidated, the companies are receiving their money back with interest. The people who paid the higher retail prices have no comparable refund process.
Only importers of record and their customs brokers can apply through the government’s refund system. Unless a contract says otherwise, those importers have no obligation to pass the returned money to their customers, retailers or the people who ultimately bought the products.
Amazon has disclosed receiving approximately $600 million in tariff refunds. It says it will return money in limited cases where a specific tariff charge can be connected directly to a customer purchase, but most of the refund will remain with the company.
That exposes the strange asymmetry of tariffs.
When tariffs are imposed, companies tell the public that the cost must be passed down through higher prices.
When those tariffs are refunded, the money stops on its way back up.
Consumers cannot easily prove how much of each purchase represented a tariff. Receipts rarely identify it. Prices also reflect shipping, labor, inventory timing, currency changes, corporate margins and other costs, making a precise individual refund nearly impossible to calculate.
That does not mean the companies experienced no harm. Many importers absorbed some tariff costs, delayed investments, changed suppliers or borrowed money while waiting for the courts. Small businesses in particular may need refunds simply to recover from the disruption.
But large companies should not be allowed to argue that consumers bore the tariffs when defending price increases, then argue that they alone deserve the refunds because their names appeared on the customs forms.
This is a bitch, where is my money? situation.
Congress could create a consumer rebate, require large refund recipients to document how tariff costs were originally distributed or impose rules governing refunds where companies explicitly added tariff surcharges.
Without that, the public gets the worst possible arrangement: consumers absorb the price increase while corporations receive the reimbursement.
The government imposed an unlawful tax. Companies passed some of it to us. Companies are now getting the tax back.
We are apparently expected to be satisfied with the possibility that competitive markets may eventually lower prices.
That is not a refund.