News / Importers need to act to be ready for refunds if tariffs are confirmed illegal

Photo: © Danielfela

Importers are being urged to act quickly to protect their access to possible refunds, should the US Supreme Court rule that President Trump’s tariff regime is illegal.

Following last week’s news that a lower court had adjudged the tariff system illegal, there are expectations that the case will be elevated to the Supreme Court, opening the door to a slew of potential refunds for importers that have already paid tariff-related charges.

However, Customs and Border Protection agency (CBP) rules mean that even if the tariffs are determined to be illegal, importers will be ineligible if their shipment has been liquidated.

Based on the declared value and applicable duty rates for each shipment at the time of entry, liquidation is a process CBP undertakes to finalise the duties, fees, and taxes owed on imported goods – that final determination all but binding.

While the process typically takes around 10 months, it is possible for CBP to reach its determination within weeks.

Amid the uncertainty surrounding the legality of the Trump tariff programme, several law firms have issued warnings to importers to delay the liquidation process should the Supreme Court decision be in their favour.

Trade law firm Sandler, Travis & Rosenberg wrote: “As President Trump’s second term continues to reshape US trade policy, importers face a rapidly evolving tariff landscape.

“There are multiple legal challenges under way to the tariffs and government policy regarding their implementation continues to evolve. Importers should therefore act quickly to preserve rights to potential refunds should the courts ultimately invalidate some or all of the tariffs.”

Given the average 10-month liquidation process, and the fact that certain tariffs have been in place since April, some importers have very little time to act.

Sandler, Travis & Rosenberg said there were actions that could be taken, and urged importers exposed to tariffs to identify all their affected entries and begin requesting extensions for the liquidation process – CBP being permitted to grant an extension of up to three years.

The law firm stressed that once liquidation becomes final, “CBP will likely contend that regardless of the ultimate outcome of the litigation no refund of duties paid is required”.

Partners at Vinson & Elkin, Joyce Adetutu and Jason Fleischer noted it was possible the court may order the preservation of the right for importers to a refund if the tariff system is deemed illegal, or that CBP suspend liquidation until a decision is reached.

But without any guarantees, they echoed Sandler, Travis & Rosenberg’s calls for importers to do as much as they can to protect their possible access to refunds, noting one final option.

They added: “Once an entry has been liquidated by CBP, the entry process is considered final. At that point, the only available remedy for an importer is to file a protest. If an importer chooses to file a protest, it must be filed within 180 days of the liquidation date.

“If the protest is allowed, CBP will refund any duties or tariffs collected in excess. If it is denied, the director will issue written notice of denial explaining the reasons for denial.”

And, as if there were not enough uncertainty for those importing into the US, CBP this week announced an inflation-related spike in its customs user fees, for the beginning of next month. DSV explains here.