Recently, the United States Supreme Court ruled the International Economic Emergency Powers Act (“IEEPA” or “Reciprocal”) tariffs unlawful setting off demands from importers for up to $130 billion in refunds.
Approximately 2,000 refund actions have been filed in the Court of International Trade. The bulk of those refunds will be recovered by importers, who absent contract obligations to their purchasers will retain the refunds even though the cost has been passed to consumers.
The cycle is beginning again. The new tariffs, particularly those under section 122 of the 1974 Trade Act may also be found unlawful. These tariffs are limited to situations where the US balance of payments is out of alignment. That is not currently the case, so these tariffs may be in issue.
For consumers at all levels, efforts should be made to claw back tariffs in the future, by requiring importers to pass the refunds on the ultimate purchaser. That should begin now, with clauses in contract requiring refunds for price increases based on tariffs. Purchasers of wood products, including furniture and cabinets, vehicles and home appliances should be seeking refund protection now.
