Kolkata: The retaliatory tariffs Donald Trump imposed around the world were unconstitutional, and therefore, must be paid back to the importers who paid the extra money, a federal court in New York has ruled. “All importers of record” were “entitled to benefit” from the Supreme Court verdict in Feb that declared the IEEPA (International Emergency Economic Powers Act) tariffs as illegal, declared a federal judge in New York, in another swift blow to the Trump administration.
Significantly, the Supreme Court verdict did strike down the tariffs as illegal but did not mention anything on the question of refunds. However, a number of companies, big and small rushed to the court after the Feb verdict urging for directions for refunding the amount of tariff they paid over the past several months.
A bill of $175 billion
The US government reportedly collected more than $130 billion in the IEEPA tariffs through mid-December. Estimates state that te the government might have to efund a whopping $175 billion in all.
In his ruling, the New York federal judge Eaton wrote that he alone “will hear cases pertaining to the refund of IEEPA duties.” ” The ruling offers some clarity about the tariff refund process, something the Supreme Court did not even mention in its Feb 20 decision. Trade lawyer Ryan Majerus, a partner at King & Spalding and a former US trade official, said he expects the government to appeal or “seek a stay to buy more time for US Customs to comply.
Onus on US Customs and Border Protection agency
As things stand now, the US Customs and Border Protection agency has to devise a way to process the refunds. Customs is familiar to the process since it regularly refunds tariffs when there is any error. But now the question is to arrange for the refund of each and every collection that have been made over the past several months of these tariffs. “The devil will be in the details of the administrative process,” trade lawyer Alexis Early, a partner at Bryan Cave Leighton Paisner, was quoted as saying. Last month, after the Supreme Court verdict, Donald Trump had said that the government could arrange refunds but it will be a mess and might take years to complete the process.