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The Dictatorship

The Supreme Court struck down Trump’s tariffs. Now comes the hard work of issuing refunds

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The Supreme Court struck down Trump’s tariffs. Now comes the hard work of issuing refunds

WASHINGTON (AP) — The Supreme Court on Friday struck down President Donald Trump’s biggest and boldest tariffs. But the justices left a $133 billion question unanswered: What’s going to happen to the money the government has already collected in import taxes now declared unlawful?

Companies have been lining up for refunds. But the way forward could prove chaotic.

When the smoke clears, trade lawyers say, importers are likely to get money back — eventually. “It’s going to be a bumpy ride for awhile,” said trade lawyer Joyce Adetutu, a partner at the Vinson & Elkins law firm.

The refund process is likely to be hashed out by a mix of the U.S. Customs and Border Protection agency, the specialized Court of International Trade in New York and other lower courts, according to a note to clients by lawyers at the legal firm Clark Hill.

“The amount of money is substantial,” Adetutu said. “The courts are going to have a hard time. Importers are going to have a hard time.’’

Still, she added, “it’s going to be really difficult not to have some sort of refund option’’ given how decisively the Supreme Court repudiated Trump’s tariffs.

In its 6-3 opinion on Friday, the court ruled Trump’s attempt to use an emergency powers law to enact the levies was not valid. Two of the three justices appointed by Trump joined the majority in striking down the first major piece of his second-term agenda to come before them.

At issue are double-digit tariffs Trump imposed on almost every country in the world last year by invoking the 1977 International Emergency Economic Powers Act (IEEPA). The Supreme Court ruled that the law did not give the president authority to tax imports, a power that belongs to Congress.

The U.S. customs agency has already collected $133 billion in IEEPA tariffs as of mid-December. But consumers hoping for a refund are unlikely to be compensated for the higher prices they paid when companies passed along the cost of the tariffs; that’s more likely to go to the companies themselves.

In a dissenting opinion, Justice Brett Kavanaugh dinged his colleagues for dodging the refund issue: “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers.’’

Borrowing a word that Justice Amy Coney Barrett — who sided with the majority — used during the court’s November hearing on the case, Kavanaugh warned that “the refund process is likely to be a ‘mess.’”

“I guess it has to get litigated for the next two years,” Trump told reporters at a press conference Friday, in which he decried the court’s decision and said he was “absolutely ashamed” of some justices who ruled against his tariffs. “We’ll end up being in court for the next five years.’’

The end of the IEEPA tariffs could help the economy by easing inflationary pressures. The tariff refunds — like other tax refunds — could stimulate spending and growth. But the impacts are likely to be modest.

Most countries still face steep tariffs from the U.S. on specific sectors, and Trump intends to replace the IEEPA levies using other options. The refunds that do get issued will take time to roll out — 12 to 18 months, estimates TD Securities.

The U.S. customs agency does have a process for refunding duties when importers can show there’s been some kind of error. The agency might try to build on the existing system to refund Trump’s IEEPA tariffs, said trade lawyer Dave Townsend, a partner with the law firm Dorsey & Whitney.

And there has been a precedent for courts making arrangements to give companies their money back in trade cases. In the 1990s, the courts struck down as unconstitutional a harbor maintenance fee on exports and set up a system for exporters to apply for refunds.

But the courts and U.S. customs have never had to deal with anything like this — thousands of importers and tens of billions of dollars at once.

“Just because the process is difficult to administer doesn’t mean the government has the right to hold on to fees that were collected unlawfully,″ said trade lawyer Alexis Early, partner at the law firm Bryan Cave Leighton Paisner.

Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, said it’s hard to know how the government will deal with the massive demand for refunds. It might try to streamline the process, perhaps setting up a special website where importers can claim their refunds.

But Adetutu warns that “the government is well-positioned to make this as difficult as possible for importers. I can see a world where they push as much responsibility as possible onto the importer’’ — maybe forcing them to go to court to seek the refunds.

Many companies, including Costco, Revlon and canned seafood and chicken producer Bumble Bee Foods, filed lawsuits claiming refunds even before the Supreme Court ruled, essentially seeking to be at the head of line if the tariffs were struck down.

There are likely to be more legal battles ahead. Manufacturers might, for example, sue for a share of any refunds given to suppliers that jacked up the price of raw materials to cover the tariffs.

“We may see years of ongoing litigation in multiple jurisdictions,’’ Early said.

Consumers, though, are unlikely to enjoy a refund windfall. The higher prices they’ve had to pay would likely be hard to attribute to a specific tariff. Should they pursue refunds anyway? Early wouldn’t advise wasting money on legal fees, but said: “In America, we have the ability to file a lawsuit for anything we want.’’

Illinois Gov. JB Pritzker, a Democrat and Trump antagonist, is demanding a refund on behalf of his state’s 5.11 million households. In a letter addressed to Trump and released by Pritzker’s gubernatorial campaign, the governor said the tariffs had cost each Illinois household $1,700 — or $8.7 billion. Pritzker said failure to pay will elicit “further action.’’

Nevada Treasurer Zach Conine submitted a payment request to the federal government for $2.1 billion to recoup the costs of the tariffs, his office announced Friday.

“As Nevada’s chief investment officer, I have a responsibility to try to recoup every single dollar that the Trump Administration takes from Nevada families,” Conine said in a statement.

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AP Writers Lindsay Whitehurst and Christopher Rugaber in Washington, Jessica Hill in Las Vegas and John O’Connor in Springfield, Illinois, contributed to this story.

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The Dictatorship

Businesses face uncertainty as Supreme Court strikes down Trump tariffs

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Businesses face uncertainty as Supreme Court strikes down Trump tariffs

NEW YORK (AP) — Businesses face a new wave of uncertainty after the Supreme Court struck down tariffs imposed by President Donald Trump under an emergency powers law and Trump vowed to work around the ruling to keep his tariffs in place.

The Trump administration says its tariffs help boost American manufacturers and reduce the trade gap. But many U.S. businesses have had to raise prices and adjust in other ways to offset higher costs spurred by the tariffs.

It remains to be seen how much relief businesses and consumers will actually get from Friday’s ruling. Within hours of the court’s decision, Trump pledged to use a different law to impose a 10% tariff on all imports that would last 150 days, and to explore other ways to impose additional tariffs on countries he says engage in unfair trade practices.

“Any boost to the economy from lowering tariffs in the near-term is likely to be partly offset by a prolonged period of uncertainty,” said Michael Pearce, an economist at Oxford Economics. “With the administration likely to rebuild tariffs through other, more durable, means, the overall tariffs rate may yet end up settling close to current levels.”

Efforts to claw back the estimated $133 billion to $175 billion of previously collected tariffs now deemed illegal are bound to be complicated, and will likely favor larger companies with more resources. Consumers hoping for a refund are unlikely to be compensated.

The fight against tariffs continues

With Trump’s unyielding position on tariffs, many businesses are braced for years of court battles.

Basic Fun, a Florida-based maker of toys such as Lincoln Logs and Tonka trucks, last week joined a slew of other businesses in a lawsuit seeking to claw back tariffs paid to the government.

While company CEO Jay Foreman is concerned about any new tariffs Trump may impose, he doesn’t think they will affect toys. Still, he said, “I do worry about some type of perpetual fight over this, at least for the next three years.”

The new 10% tariff Trump announced Friday immediately raised questions for Daniel Posner, the owner of Grapes The Wine Co., in White Plains, New York. Since wine shipments take about two weeks to cross the Atlantic, he wonders if he had a shipment arriving Monday, would it be subject to a 10% tariff?

“We’re reactive to what’s become a very unstable situation,” Posner said.

Ron Kurnik owns Superior Coffee Roasting Co. in Sault Ste. Marie, Michigan, across the border from Canada. In addition to U.S. tariffs, Kurnik faced retaliatory tariffs from Canada for much of last year when he exported his coffee.

“It’s like a nightmare we just want to wake up from,” said Kurnik, whose company has raised prices by 6% twice since the tariffs went into effect. While he’s pleased with the Supreme Court’s ruling, he doesn’t think he will ever see a refund.

Industries pine for more stability

A wide array of industries, including retail, tech and the agricultural sector, used the Supreme Court ruling as an opportunity to remind Trump of how his trade policies have affected their businesses.

The Business Roundtable, a group that lobbies on behalf of more than 200 U.S. companies, released a statement encouraging the administration to limit the focus of tariffs going forward to specific unfair trade practices and national security concerns.

In the retail industry, stores of all stripes have embraced different ways to offset the effects of tariffs — from absorbing some of the costs themselves, to cutting expenses and diversifying their supply network. Still, they have had to pass on some price increases at a time when shoppers have been particularly sensitive to inflationary pressures.

Dave French, executive vice president of government relations for The National Retail Federation, the nation’s largest retail industry trade group, said he hoped lower courts would ensure “a seamless process” to refund tariffs. That issue wasn’t addressed in Friday’s ruling.

For the technology sector, Trump’s tariffs caused major headaches. Many of its products are either built overseas or depend on imports of key components. The Computer & Communications Industry Association, which represents a spectrum of technology companies employing more than 1.6 million people, expressed hope that the decision will ease the trade tensions.

“With this decision behind us, we look forward to bringing more stability to trade policy,” said Jonathan McHale, the association’s vice president for digital trade.

Farmers, who have been stung by higher prices for equipment and fertilizer since the tariffs went into effect, and reduced demand for their exports, also spoke out.

“We strongly encourage the president to avoid using any other available authorities to impose tariffs on agricultural inputs that would further increase costs,” said American Farm Bureau Federation President Zippy Duvall.

Industries that aren’t feeling any relief

The Supreme Court ruled 6-3 that the International Emergency Economic Powers Act did not give the president authority to tax imports, a power that belongs to Congress. But the decision only affects tariffs imposed under that law, so some industries will see no relief at all.

The decision leaves in effect tariffs on steel, upholstered furniture, kitchen cabinets and bathroom vanities, according to the Home Furnishings Association, which represents 15,000 furniture stores in North America.

At Revolution Brewing in Chicago, the aluminum they use for cans costs as much as the ingredients that go inside them because of tariffs Trump has placed on metals that are not affected by the Supreme Court ruling. While the cans are made in Chicago, the aluminum comes from Canada, said Josh Deth, managing partner at the brewery.

Tariffs have been just one challenge for his business, which is also affected by volatile barley prices and a slowdown in demand for craft beer.

“Everything kind of adds up,” he said. “The beverage industry needs relief here. We’re getting crushed by the prices of aluminum.”

Reaction overseas

Italian winemakers hard-hit by the tariffs greeted the Supreme Court decision with skepticism, warning that the decision may just deepen uncertainty around trade with the U.S.

The U.S. is Italy’s largest wine market, with sales having tripled in value over the past 20 years. New tariffs on the EU, which the Trump administration initially threatened would be 200%, had sent fear throughout the industry, which remained even after the U.S. reduced, delayed and negotiated down.

“There is a more than likely risk that tariffs will be reimposed through alternative legal channels, compounded by the uncertainty this ruling may generate in commercial relations between Europe and the United States,” said Lamberto Frescobaldi, president of UIV, a trade association that represents more than 800 winemakers.

Elsewhere in Europe, initial reaction focused on renewed upheaval and confusion regarding costs facing businesses exporting to the US.

Trump’s tariffs could hit pharmaceuticals, chemicals and auto parts, said Carsten Brzeski, an economist at ING bank. “Europe should not be mistaken, this ruling will not bring relief,” he said. “The legal authority may be different, but the economic impact could be identical or worse.”

___

Anne D’Innocenzio in New York; Dee-Ann Durbin in Detroit; Michael Liedtke in San Francisco; David McHugh in Frankfurt, Germany; Jonathan Matisse in Nashville, Tennessee; Adrian Sainz in Memphis, Tennessee; and Nicole Winfield in Rome contributed to this report.

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The Dictatorship

Democrats warn Trump ‘must consult with Congress’ before striking Iran

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As President Donald Trump weighs a second major military assault on Iran in less than a year, congressional Democrats are warning a president known for pushing the boundaries of his executive power against unilaterally waging war on the Middle Eastern country.

Rep. Debbie Wassermann Schultz, D-Fla., said Saturday that Trump “must consult with Congress” and make a clear case for why Iran poses an imminent threat to the United States that would warrant U.S. military action. She pointed to the fact that former President George W. Bush sought congressional authorization before he ordered the U.S. invasion of Iraq in 2003.

“We have not seen anything about an imminent threat that would necessitate a significant strike like this,” Wasserman Schultz said on MS NOW’s “Alex Witt Reports.”

“So to think that this would be a walk in the park, the president is really not thinking this through carefully, and needs to consult with Congress,” she said.

Senate Minority Leader Chuck Schumer said in a statement on Friday that the Trump administration has not clarified its strategy or objectives — or solicited congressional approval — as it weighs launching a military campaign against Iran.

“Congress has the sole power to declare war,” Schumer said. “We must enforce the War Powers Act and compel this administration to consult with Congress and explain to the American people the objectives and exactly why he is risking more American lives.”

Trump acknowledged on Friday that he is considering limited military strikes to push Tehran into agreeing to end its nuclear enrichment.

“I guess I can say I am considering that,” Trump told reporters amid a massive buildup of U.S. military forces in the Middle East, including two aircraft carriers and dozens of fighter jets, poised within striking distance of Iran.

Iranian Foreign Minister Abbas Araghchi told MS NOW’s “Morning Joe” on Friday that there is “no military solution for Iran’s nuclear program.” Trump on Thursday warned “bad things will happen” if Iran does not agree to a nuclear deal.

“The only solution is diplomacy,” Araghchi said. “This is why the U.S. is back at the table of negotiation and is seeking a deal. And we are prepared for that.”

Although he is unlikely to face much resistance from congressional Republicans, Democrats have cautioned against striking Iran. Sen. Jack Reed of Rhode Island, the ranking member on the Senate Armed Services Committee, warned of wider implications.

“A preemptive attack against Iran at this time would be a strategic misstep, and I am concerned that such recklessness could spark an uncontrolled conflict,” Reed said in a statement.

The administration has “failed to engage with Congress during this latest military build-up,” he added. “It is easy to start a war; finishing one is much harder.”

Clarissa-Jan Lim is a breaking news reporter for MS NOW. She was previously a senior reporter and editor at BuzzFeed News.

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The Dictatorship

Trump hikes global tariff even higher — to 15% after Supreme Court ruling

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President Donald Trump said Saturday he is raising global tariffs to 15% from the 10% import tax he imposed the day before in response to the Supreme Court’s ruling striking down his sweeping tariffs.

“Based on a thorough, detailed, and complete review of the ridiculous, poorly written, and extraordinarily anti-American decision on Tariffs issued yesterday, after MANY months of contemplation, by the United States Supreme Court, please let this statement serve to represent that I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level,” he wrote on Truth Social.

Trump had initially set the global tariffs at 10% in an executive order on Friday evening. Those tariffs, enacted under section 122 of the Trade Act of 1974, are in effect for 150 days unless Congress approves its extension.

On Saturday, he upped that figure to 15%. The sudden increase was met with immediate criticism from both sides of the aisle.

Senate Minority Leader Chuck Schumer, D-N.Y., called it a “dumb” move. “He’s just making it up as he goes and Americans pay the price,” Schumer said on X.

“Trump’s commitment to pickpocketing the American people is relentless,” House Ways and Means Committee Democrats wrote on X. “A little over 24 hours after his tariffs were ruled illegal, he’s doing anything he can to make sure he can still jack up your costs.”

Scott Lincicome, vice president of general economics at the right-leaning CATO Institute, wrote“Clearly, this is all a very legitimate and rigorous ‘balance of payments’ remedy under the statute here. Yet another reason why congress needs to reform the law.”

Trump has been seething over the Supreme Court’s decision to invalidate the tariffs he imposed under the International Emergency Economic Powers Act. Three conservative justices — Neil Gorsuch, Amy Coney Barrett and Chief Justice John Roberts — sided with their liberal colleagues in the ruling, which The Wall Street Journal’s conservative editorial board called “a monumental vindication of the Constitution’s separation of powers.”

At a news conference on Friday, Trump said he was “ashamed of certain members of the court” and accused the justices of being “unpatriotic and disloyal to our Constitution.” He claimed without providing evidence that the court was “swayed by foreign interests and a political movement that is far smaller than people would ever think.”

He singled out Gorsuch and Barrett, two of his appointees to the high court, in a post on Truth Social later that day, saying that they “vote against the Republicans, and never against themselves, almost every single time, no matter how good a case we have.”

He then continued his streak into Saturday morning, lavishing praise on the conservative justices who disagreed with the majority decision.

“My new hero is United States Supreme Court Justice Brett Kavanaugh and, of course, Justices Clarence Thomas and Samuel Alito,” Trump wrote. “There is no doubt in anyone’s mind that they want to, MAKE AMERICA GREAT AGAIN!”

The additional 5% increase on the tariffs he hastily imposed on Saturday could further shake global markets, which have been rattled by the president’s unpredictable tariff threats.

The Supreme Court ruling raised more uncertainty for consumerswho were left wondering whether they might be reimbursed for all the extra money they paid for goods and products over the past year.

While the court didn’t explicitly address reimbursement, Kavanaugh did in his dissent, saying, “Refunds of billions of dollars would have significant consequences for the U.S. Treasury. The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers.”

Clarissa-Jan Lim is a breaking news reporter for MS NOW. She was previously a senior reporter and editor at BuzzFeed News.

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