The importer pays the tax and passes it on as higher prices to the consumer. So the importers are the one that had the tax collected from them and would be getting the refund.
The importer CAN be the seller, but other times the importer is a middleman in the supply chain.
It depends on the terms of the transaction. Most business-to-business transactions would have the importer responsible for duties, but many, maybe the majority of business-to-consumer transactions have taxes & duties covered by the exporter and included in the final price which would typically reflect the additional taxes & duties in the prices. In those case, the exporter would be the one refunded.
To the CPAs among us: will the refunded import taxes be treated as extra profit for all the importers who paid them?
I could see an argument that they don't have a legal obligation to pass the refunds on to their customers, any more than my local grocery store owes me 5 cents for the gallon of milk I bought last year if the store discovers that their wholesaler had been mistakenly overcharging them.
The idea of getting a refund for mischaracterized tariffs is actually fairly common (it's called a duty drawback and there's a cottage industry around this). It's generally used when an importer incorrectly categorized their import under an HS code that has a higher duty than the correctly categorized HS code.
The difference this time is the scale is orders of magnitude larger. Will be interesting to see how they (importers and CBP) work through this.
A regular importer who routinely pays customs duties is now owed money by Customs and Border Protection. Can they now set off future duties against the balance owed them? Normally, reciprocal debt cancellation is legal.
The U.S. Treasury has a whole system for this, but in the other direction. If the government owes you money, and you owe the government money, the Treasury will deduct what you owe from whatever they are paying out.[1] But they're not set up for that in the other direction.
I got charged a $600 tariff from UPS to ship a $30 25-pound sandbag into the US from Canada.
UPS didn't even deliver the product.
I'm suing them in small claims.
We'll see what happens.
I imagine that even after the ruling, our ass backwards legal system will somehow say this makes sense, even though the tariff rate was never near high enough for that bill to make any sense.
Further, they're going to get refunded the $10 it MIGHT have cost them.
It was interesting to see shops in the border towns of south & south east Switzerland buying & selling products from Italy, a relatively cheaper market.
It wasn't the tariff. UPS has been tacking on a ridiculously high paperwork fee for the service of processing tariff payments. Other shipping companies have also had fees, but UPS is the main one that's made it exorbitant and disproportionately higher than the tariff itself.
I'm thinking the delivery agents such as UPS, Fedex, USPS now need to sue the United States so they can pay back all the recipients the fees they charged, plus interest.
There are going to be a raft of class action suits based on this.
As one of my lawyers once said, the only winners here are the lawyers.
That's a great question. I would also love to know that answer. I agree with you that they're not going to share the refund if the importer was the middleman in the supply chain, and same thing if the importer was also the seller.
Yes, I think that's the starting point. Another part of my question was whether a CPA applying GAAP would recommend recognizing the $2 as other income, or else as a liability against a future claim from the customer who bought the widget and is now seeking a partial refund.
I did what passes for research these days and concluded that if the claim is "probable and estimable," then it could be recorded as a "contingent liability" rather than other income. Relevant facts would include whether the tariff refund included a pass-through refund mandate (unlikely with this administration), or whether class actions for refunds against merchants were pending (inevitable).
Related question, unanswerable except maybe as a rough estimate: how much will it cost, in accountant/bookkeeper time, to do all the administrivia required to process all these refunds?
> The importer pays the tax and passes it on as higher prices to the consumer.
So it matters how we’re interpreting “paying”. One way to look at it is that if the cost was passed on to the consumer, the consumer paid it. The importer simply handed over the money.
When you vote, you vote for an entire platform and you especially vote for central campaign promises. You don’t get to say “I voted for a world where I’m on top” and then say “but not for the primary method the candidate promised to use!”
> They voted for a promise of a return to a world where they were on top.
Very few were on top during The Gilded Age and it has been EXTREMELY clear for quite a long time now that the "Great" in M.A.G.A. is a reference to the 1880s, not the 1950s.
tariff were promised and implemented by Trump in his first mandate too, if you voted for him, you mostly voted for America Great Again Through Tariffs.
After the liberation day tariffs were announced, 34% of the people thought they were good.
Project 2025 was publicly available prior to the election. Tariffs were one of the many policies within the larger plan. If you voted for Trump you are responsible for the Tariffs, this is not a hoodwink where Trump rug pulled everyone after getting elected — it was literally there in the open.
Even beyond/disregarding Project 2025, tariffs were a well-known part of the GOP platform in 2024; it was even included and discussed at the Presidential Debate. The Harris platform even called it a tax at that time, to attempt to make it quite clear to the voter who, in the end, would bear the cost, and the Trump platform equivocated on who would pay the tax to distract from that Harris was right.
Even if you knew nothing of Project 2025 (somehow), you were warned.
On top you have news outlets and educated people not being clear what they are. See from the article:
He has long argued tariffs boost American manufacturing - but many in the business community, as well as Trump's political adversaries, say the costs are passed on to consumers
It’s reported as if someone still needs to figure out who pays the tariffs in the end. I’m aware that tariffs are a lever to potential move buying behavior and give incentives to move production locally. But in this instance and how it’s/ was implemented it’s clear who is the paying for it.
The problem is USA doesn't get good choices. Given the choice between a walking corpse and trump, they choose the corpse. Given the choice between a woman and trump, they choose trump.
This is loony, all these guys knew eachother for years before and have cordial if nor friendly relationships. The Clintons, Trump, Bushes, Obamas, etc.
These people are not necessary against tariff, they are against paying more for their stuff and having it benefit some middleman because the current government messed up badly.
I can otherwise understand how people would agree on paying more for their stuff if it allows their fellow citizens to have a job.
There are many reasonable ideas for import taxation. But what you describe was not what happened. China fought back with their own tariffs, and you may well have paid less import tax on your Temu knock-offs than you did for some widget made with both higher environmental and labor standards in some western European country.
Check Truth Social, many are livid that the tariffs were found illegal. A lot of supporters of the current government prefer to pay higher prices for goods.
The importer CAN be the seller, but other times the importer is a middleman in the supply chain.