Tariff refund system launches today: Here’s who it’s for

Businesses can begin claiming refunds Monday through Customs and Border Protection for President Donald Trump’s tariffs that were ruled unconstitutional. 

Here’s what to know about the process: 

Tariff refund system

Big picture view:

The system starting on Monday will refund tariffs directly to the businesses that paid them, which are not obligated to share the proceeds with customers.

Dig deeper:

MarketWatch reported businesses in the technology, media and telecom sector, as well as the industrial products and manufacturing sector, appear to be the most affected industries when it comes to the potential for refunds, according to PwC, one of the world’s largest consulting firms. 

PwC said the TMT sector had about $47.6 billion in refund potential, with industrial and manufacturing having close to $40 billion. 

PwC estimated consumer products and automotive had the next highest refund potential, at $23.9 billion and $19.9 billion respectively. 

How it works:

Companies must submit declarations listing the goods on which they paid the import taxes that were eventually struck down. If CBP approves a claim, it will take 60-90 days for a refund to be issued, the agency told The Associated Press. 

To receive refunds, importers have to register for the CPB's electronic payment system.

By the numbers:

As of April 14, 56,497 importers had completed registration and were eligible for refunds totaling $127 billion, including interest, the agency said.

What's next:

It’s unclear how smoothly the system may run Monday, and if a rush of businesses trying to file their claim may crash the system beginning at 8 a.m. ET. 

Some business owners told NPR they had game plans to utilize multiple colleagues to try and fill out the claim, while others said they were looking at how they could use AI to step in. 

Trump’s tariffs ruled illegal

The backstory:

The 6-3 Supreme Court opinion ruled in February that Trump’s attempt to use the 1977 International Emergency Economic Powers Act (IEEPA) to enact the taxes is not valid. That power belongs to Congress, the justices said.

By the numbers:

Customs and Border Protection said in court filings that over 330,000 importers paid a total of about $166 billion on over 53 million shipments.

Timeline:

Not all of those orders qualify for the first phase of the refund system's rollout, which is limited to cases in which tariffs were estimated but not finalized or within 80 days of a final accounting.

It’s unclear right now what or when the next phase of the refund system’s rollout may be. 

RELATED: U.S. tariffs mostly paid by American importers and consumers, report suggests

Can I get a tariff refund? 

Big picture view:

This refund process is not for shoppers and consumers, and it can’t be said if the process will ever reach the pockets of the average American. 

Meanwhile:

Some class-action lawsuits are starting to get filed that aim to force companies, ranging from Costco to Ray-Ban maker Essilor Luxottica, to reimburse shoppers.

Individuals may be more likely to receive refunds from delivery companies like FedEx and UPS, which collected tariffs on imports directly from consumers. FedEx has said it would return tariff refunds to customers when it receives them from the CPB.