Business Celebrates Victory over Trump Tariffs, but Refunds Will Take Time
Thousands of businesses won a hard-fought victory when the US Supreme Court ruled to overturn the White House’s emergency tariffs. The refund process has just started.
In a decision that could shake the global economy for years, the court ruled that US President Donald Trump was not allowed to use the International Emergency Economic Powers Act of 1977 to impose broad tariffs on imports.
The international community has spent months sorting out Trump’s ever-evolving trade policy and his use of tariffs on his agenda, not only to deal with trade issues but also as a way to counter the policies and actions of other governments.
Now, thousands of businesses – not those who sued the administration – will decide whether to get their money back, as it means that more than $175 billion of the money collected in the US can be returned, the economists of the Penn-Wharton Budget Model said on Friday.
Stock markets rose in the United States and Europe, led by shares of affected companies, including European luxury brands from LVMH to Hermes and Italian luxury outerwear group Moncler, which all rose after the decision.
“We don’t have 100% of the facts, but we’ve been waiting for this for a long time and a lot of people have been waiting for it, so it’s a really good day,” said Michael Wieder, founder of US-based baby production company Lalo, which plans to seek about $2 million in funding. That process is expected to be slow.
Thousands of cases
Companies across the consumer goods, automotive, manufacturing and apparel sectors have been hit particularly hard as they rely on low-cost manufacturing in China, Vietnam, India and other sources. Trump’s duties are raising the cost of importing finished goods and parts, squeezing margins and disrupting well-functioning supply chains around the world.
More than 1,800 tax-related cases have been filed in the US Court of International Trade, which has jurisdiction over tax and customs matters, since April, compared to fewer than a dozen such cases in all of 2024.
Prominent plaintiffs include subsidiaries of Japan’s Toyota Group, US big-box retailer Costco, tire maker Goodyear Tire & Rubber, aluminum company Alcoa, Japanese motorcycle maker Kawasaki Motors and Paris-listed eyewear giant EssilorLuxottica.
Several lawyers say more companies around the world are likely to join the suits, as they wait until the decision doesn’t attract the attention the White House doesn’t want. They will join a line of companies that may have to wait months to years to recoup billions of dollars in import taxes.
“Companies are faced with the challenge of collecting detailed information on imports to calculate the prices paid under different laws, applied at different times. Even firms from different countries may not organize all the information correctly,” said Nabeel Yousef, a partner at the law firm Freshfields. Even with Friday’s decision, it’s not like “on Monday, companies will start getting checks in the mail,” he said.
The higher taxes have piled up costs for consumers who are already weary from several years of post-COVID inflation. The Federal Reserve Bank of New York said last week that 90% of Trump’s tariffs are being borne by American consumers and companies, reversing the White House’s argument that the levies are being paid to immigrants.
As of November, the effective US tax rate was 11.7%, compared to an average of 2.7% between 2022 and 2024, according to the Yale Budget Lab.
Uncertainty remains
The order surrounding refunds is likely to be left to the US Court of International Trade, meaning claims are likely to be administratively complex, said International Chamber of Commerce Secretary General John Denton, adding that the decision was “quietly troubling” on the issue.
Trump officials have said they will use other authority to impose tariffs, including laws that allow the United States to protect against unfair trade practices or defense sectors critical to national security. Many companies, business associations and advocates say this will introduce more uncertainty in the coming months.
“The possibility of rates re-emerging in a revised form remains reasonable. It is a backdrop to potential tax refunds, and presents a messy excess of enforcement that increases economic uncertainty,” said Olu Sonola, head of US economics at Fitch Ratings.
Germany’s VDMA, which represents engineering machinery firms hit by the tariffs, warned that the decision would not reduce uncertainty and that Trump had other legal options to impose jobs.
Additionally, the auto industry will continue to face significant tariffs that were not levied under the IEEPA. Import tariffs of 25% on vehicles shipped across the border from Mexico and Canada, for example, were imposed last year based on national security grounds.
Still, advocates say nearly thousands of auto parts shipped to the U.S. from countries subject to Trump’s tariffs have been hit with tariffs, raising costs for both parts suppliers and automakers.
Some US companies, anticipating a slow recovery process, have opted to sell their rights to collect those returns from foreign investors. This involves taking a small upfront payment — about 25 to 30 cents on the dollar — while agreeing to shell out more from investors in the event of a price hike, Reuters reported in December.
German logistics company DHL said it will use its technology to ensure its customers receive refunds “accurately and efficiently” if they are authorized.
It is not clear whether the companies will also lower prices to help middle- and low-income US consumers, who have tightened their spending due to higher costs.
“We will definitely be applying for a refund as I think every importer would. I highly doubt the prices will go down. That rarely happens,” said Jason Cheung, CEO of small toy company Huntar Co, one of the plaintiffs.
(Reporting by Nicholas Brown and Ariana McLymore in New York; additional reporting by Tom Hals in Delaware and Kalea Hall in Detroit, Alexander Marrow in London and Christoph Steitz in Frankfurt; Writing by David Gaffen; Editing by Lisa Jucca and Nick Zieminski)
