News / Tariff refund bandwagon rolls on, but SMEs struggling

Photo: © Marian Vejcik | Dreamstime.com

US Customs officials have accepted more than 70% of the applications for refunds related to the Trump tariffs imposed last year, but shippers are being warned to submit claims as soon as possible with submission deadlines in the balance.

A total of $171.1bn is owed to those who paid International Emergency Economic Powers Act (IEEPA) tariffs, and while some $80bn, alongside interest accrued, has been paid to claimants, deadlines for entries made in February and March 2025 are closing.

Following the US Supreme Court invalidating the IEEPA tariff policy, shippers were given a window of one year from the time their entry was made plus 180 days to submit their claims.

This means a claim for a 1 February 2025 entry would need to be submitted by 31 July this year, or else the claimant would permanently lose the right of refund.

Particularly exposed appear to be SMEs, with the data supplied by US Customs and Border Patrol (CBP) yesterday indicating that, while 60% of the value of tariffs owed has been accepted, that equates to only 30% of the total entries subjected to IEEPA tariffs.

The inference being that larger, higher-value entries have been successful in claiming refunds and seeing them processed at the expense of smaller shippers that appear to be struggling with the deadline process and the intricacies of filing.

Court of International Trade judge Richard Eaton noted: “It is understood most of the refunds that have been processed so far have gone to large importers, not small,” adding that CBP had failed to propose a method to refund all duties “including those owing to small importers”.

He then called on testimony from CBP commissioner Rodney Scott to ascertain “if it is the government’s policy to refund the duties to importers both large and small”, noting “there is $166bn involved”.

Not helping this was the rapid emergence of customs brokers looking to exploit the confusion surrounding the tariff refunds, with claims circling in the immediate aftermath of the Supreme Court ruling of large brokerages seeking 15% of any money received.

Pete Mento, director of global trade advisory services at Baker Tilly, brought the situation to the attention of The Loadstar with a post on LinkedIn that said he was “consistently” hearing of the larger brokerages seeking a 10-15% cut of recovered duties to process submissions.

“Let’s be clear. They are not auditing the entries. They are not identifying errors. They’re not fixing declarations. They’re not filing post-summary corrections. They are not preserving rights through protests. They are not preparing for CBP scrutiny,” Mr Mento said.

“They are pulling entry data, putting it into a spreadsheet, and uploading it. That’s it. And for that, they want a double-digit percentage of your recovery. At best, this is opportunistic pricing based on the assumption that importers don’t want to deal with CAPE themselves.”

Speaking at Multimodal recently, Katie Fryer, senior customs compliance manager at Travis Perkins, said the company had brought its brokerage and customs activity in-house “for control and visibility of the data”.

She added: “Bringing brokerage in-house gave us visibility. Before we were blind but now we can see the good, bad, and ugly, which allows us act on it. Change, mitigatation, and damage control become possible.”

Despite the warnings, with $80bn having already been paid out and a further $40bn having been accepted and now winding through the Consolidated Administration and Processing of Entries (CAPE) refund system, there is general positivity around the situation.

Citing the progress made, chair and CEO of the Liberty Justice Center Sara Albrecht said: “This is real progress for importers who paid unlawful IEEPA tariffs – and Liberty Justice Center will keep pushing to make sure every eligible business receives the refund it is owed.”