News / FedEx sues Trump administration for tariff refund

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FedEx has baulked at relying on January’s judgement from the US Court of International Trade (CIT) and instead opted to sue the Trump administration, seeking a full refund of tariffs paid.

Meanwhile, warnings have been sounded to SMEs selling their refund rights.

Speaking to The Loadstar yesterday, Seko Logistics’ director of customs brokerage services, William Jansen, said those importers that had been selling their refund rights for a fraction of their value may nonetheless find themselves having to pursue the refund on behalf of the buyer.

“This refund process could prove pretty administratively heavy, and even if a company sells their refund rights, I have to assume that they are still married to bearing responsibility for pursuing those refunds,” he said. “That would involve providing the necessary documentation and resources to achieve this.

“It is not something we have seen discussed, but I would be really curious to know how much of a squeeze is required from importers after they have sold those refund rights.”

Mr Jansen’s comments speak to the continuing uncertainty surrounding the refund process, amid concerns that the Trump administration could move to delay or even prevent refunds, in defiance of Friday’s Supreme Court ruling.

Indeed, concern over the administration’s response to the ruling led three Democrat senators to introduce a bill not only ensuring the processing of refunds but simplifying the process. However, even if the legislation passes, the president could veto it.

“I think the CIT is generally pretty quick in making decisions, but what’s happening at the moment suggests that this not be a 30-to-60-day thing. It could be longer, which I think makes it more tempting for SMEs to go after the quick influx of cash,” Mr Janesen added.

Such uncertainty is likely behind FedEx’s decision to push ahead with legal action against the Trump administration, despite that earlier CIT decision, becoming the first major company to seek reimbursement of its share of anywhere from $100bn to $300bn so far paid in tariffs.

FedEx did not specify the amount it was seeking in the complaint filed with the CIT, opting instead to call for a “full refund” of duties paid, but, based on the company’s annual revenue, the low end would be $75m, with a more likely range between $200m and $600m.

In filing the claim, FedEx has also headed off issues surrounding the CIT’s earlier decision that the refund rights of “all current and future similarly situated plaintiffs” would be protected – with FedEx notably larger than the plaintiff involved in the January case.

The company noted: “While the Supreme Court did not address the issue of refunds, FedEx has taken necessary action to protect the company’s rights as an importer of record to seek duty refunds from US Customs and Border Protection.”

Meanwhile, Flexport CEO Ryan Peterson has been promoting the company’s tariff refund service, which he claims will be cheaper and faster than turning to law firms, pointing out that 22 Fortune 500 companies had already signed up for the service.

He told media Flexport had been working on a tariff refund calculator for just over a month, which allowed users to upload customs data – which can be obtained from the government – before being told what they are owed.

“We’ve got a mid-sized clothing company that I looked at last week, owed $70m – not a big, world-famous brand or anything, so it’s huge money. CFOs really care about this. In fact, we’re seeing as much interest from CFOs as from the trade compliance departments.”