US companies welcome start of tariff refund

US companies are welcoming the chance to apply for refunds on tariffs paid for imported goods, after the government opened up an online portal on Monday for claims.

The application process follows the Supreme Court's ruling earlier this year that the tariffs were unlawful.

The system, called CAPE, is being run by Customs and Border Protection, and comes after the Court of International Trade instructed the CBP to return up to $166 billion in taxes paid on imports.

The system will be able to handle around 63 percent of all import entries that were subject to the tariffs. As of March 4, over 330,000 importers have made a total of over 53 million entries and paid about $166 billion in tariffs that now have to be refunded, the government said.

China, which remains a top-three trading partner of the United States, had faced very high US levies of at least 47 percent placed on its goods.

In 2025, US goods imported from China totaled $308.4 billion, down 29.7 percent ($130.4 billion) from the year before, according to the Office of the United States Trade Representative.

The tariffs were imposed on appliances, toys, games, apparel, machinery and electronics that many US companies imported.

Jay Foreman, CEO of toymaker Basic Fun!, was happy that he got the process started early. He instructed staff members at his headquarters in Boca Raton, Florida, to start filing as soon as the system went live, though they experienced some glitches, he told Reuters.

In February, the US Supreme Court struck down President Donald Trump's global tariff policy that used the International Emergency Economic Powers Act, or IEEPA, of 1977 — as the law had only previously been used for national emergencies.

Costco and 3,000 other businesses such as Revlon, Toyota, Nintendo of America and FedEx had previously sued the Trump administration to get refunds, arguing that the tariffs were unlawful under the IEEPA.

Since the ruling, the collection of tariffs has stopped.

The retail sector, vital for the nation's economy, is the largest private-sector employer, contributing $5.3 trillion to the annual GDP.

The National Retail Federation, the world's largest retail trade association, said its members — who range from department stores and independent retailers to grocery stores — saw CAPE as "significant" and "an important step forward".

"CBP's opening of the CAPE process is significant for importers that paid the IEEPA tariffs that the Supreme Court ruled illegal," Vice-President of Supply Chain and Customs Policy Jonathan Gold told China Daily. He supported CBP bringing the system online for Phase 1 within 45 days, meeting the timeline it committed to with the Court of International Trade.

"Although Phase 1 is limited in scope, it is an important step forward for the hundreds of thousands of businesses impacted," Gold said. "We are hearing a range of experiences from members as users begin filing early claims in the system, which is to be expected. CBP is working quickly to identify and address issues as they arise."

The 6-to-3 decision by the Supreme Court justices was a major setback for a core piece of Trump's trade policy.

After the ruling, US Trade Representative Jamieson Greer said the Trump administration could use other statutes to impose tariffs under Sections 301, 122 and 232, of the Trade Act of 1974.

Uphill battle

"The majority opinion implies that Trump will face an uphill battle if he invokes other statutes (Sections 338, 122, 232 and 301)," Gary C. Hufbauer, an expert on international trade and nonresident senior fellow at the Peterson Institute of International Economics, told China Daily.

"The data we have collected indicates that, at least through early 2026, companies absorbed most of the tariffs. Tariffs averaged around 15 percent of import value, with a wide dispersion between high and low tariffs. But even absorbing a 10 percent tariff has a big adverse impact on most firms, since their profit margins are typically under 10 percent. For most firms, timely refunds are essential," Hufbauer said.

Lawyers and business groups around the country said they are advising businesses on their rights to a refund.

Some companies such as Costco and FedEx signaled that they could pass on refund benefits to customers by lowering prices.

Hufbauer said that customers should not expect any direct refunds.

US Chamber of Commerce's Executive Vice-President and Chief Policy Officer Neil Bradley said, "Swift refunds of the impermissible tariffs will be meaningful for the more than 200,000 small business importers in this country and will help support stronger economic growth this year."

Gold of the NRF said that "these refunds will give retailers small and large an opportunity to resume investments — in their businesses, employees and customers — that were put on hold due to tariff-related costs".