When the new online system is implemented, the U.S. government won’t be able to handle around one-third of its customs duty refund requests, which amount to about $55 billion, a recent court filing revealed.
The situation follows a February ruling by the Supreme Court that invalidated significant portions of President Trump’s tariffs, leaving the refunds somewhat unclear. Subsequently, the government aimed to launch an online portal for these refund applications by mid-April.
However, U.S. Customs and Border Protection’s Brandon Lord indicated that the portal will first handle only 63% of nearly 53 million claims, as stated in a filing to the U.S. Court of International Trade.
To meet the original deadline in April, the portal’s initial phase will focus solely on tariffs considered “not final,” which typically apply to imports a year down the road. Yet, Customs officials haven’t provided details regarding the timeline for processing these final duties.
Importers have already paid around $166 billion in duties, which were overturned by the Court. The government also committed to paying interest on the refunded levies.
The primary refund portal is currently about 85% complete, while other components of the system range from 60% to 80% completion, according to Lord’s filing. He also mentioned that processing customs duty refunds might take as long as 45 days post-launch of the new portal.
Most refunds are expected to be processed electronically, except in special cases where different payment methods might be necessary.
So far, more than 26,000 importers have registered online, looking to reclaim around $120 billion in refunds.
The initiative for the tariff refund system began after the Supreme Court decided in February that Trump’s use of the International Emergency Economic Powers Act to impose hefty import taxes exceeded his authority.
The ruling invalidated various tariffs, including a 10% base tax on all imports and specific duties on products from countries like China, Mexico, and Canada. This could result in the Trump administration needing to refund traders tens of billions of dollars.
At a recent fundraiser, Trump criticized two Supreme Court nominees who sided against him in tariff-related cases. He claimed the Court’s decision led to substantial financial losses for the country, expressing discontent toward Justices Neil Gorsuch and Amy Coney Barrett.
The White House has initiated an investigation under Section 301 of the Trade Act of 1974, which may involve replacing some canceled tariffs with new import taxes, potentially resulting in further tax implications.
It’s important to note that the Supreme Court’s decision did not influence certain tariffs related to automobiles, furniture, semiconductors, pharmaceuticals, steel, and aluminum.
