SOUTH BEND, Ind. -- American importers are owed $166 billion plus interest in tariff refunds and importers of record who made tariff payments, or authorized customs brokers acting on their behalf, can apply for these. The Supreme Court struck down most of President Donald Trump's tariffs in February.
Monday is the first day importers can apply for reimbursement through a new portal via US Customs and Border Protection. There are multiple phases in its rollout, so not all tariff payments will be eligible today.
Michael Hicks, PhD, is the George and Frances Ball Distinguished Professor of Economics and Director of the Center for Business and Economic Research at Ball State University.
When it comes to tariffs, he says there are three groups involved.
“There's the company overseas that brings the product here, the evidence is very clear—they didn't eat any prices. There was no change in the import price of goods. They were unaffected. So, they didn't lower their prices to adjust to tariffs, so the foreign companies didn't pay the price. The domestic firms eventually ate the price. So, there wasn't always the direct importer. For example, it may have been an importer of wines. They paid a price. They probably lowered the wine price a little bit, sent it off to a retailer, then the retailer marked up the price,” said Hicks.
Hicks says several high-quality studies over the past few years show American consumers eventually eat the price increases associated with tariffs, north of 90 percent.
“So, the problem for this tax rebate is it's going to the administrative incident, so it's going to those importers who paid that tariff to the government as they bought goods from overseas. The American consumer who eventually bought that product, whether it was a direct product, like a bottle of wine or a tool or a toy, or whether it went through production as part of an automobile. They are not getting any rebates directly in this process,” said Hicks.
ABC57's Jordan Tolbert asked Hicks if refunds might be passed down to businesses that bought from importers. He says there may be some rebates from importers but largely expects the importing firm will hold onto it.
CBP is estimating refunds will be issued within 60-90 days after approval, but it could take longer if requests need further review.
Hicks said he would be surprised if the refunds were issued quickly and effectively.
“CBP is under the control of Homeland Security, which is without its leadership at this point. And so, I would suspect that they're going to really struggle to make this happen. The bright spot is that if you were, if you had any sort of legal advice over the process of paying these tariffs, you would have retained all the tax documents and receipts so that it's there. It's a very low likelihood of fraud, pretty high likelihood that you can demonstrate that you pay these tariffs. And so, it should be a fairly easy accounting process,” said Hicks.
Hicks thinks consumers should expect the president to reapply tariffs under different legislation and thinks it's likely many Americans will continue to pay higher prices due to tariffs in the future. That’s until potential new tariffs could be struck down by the Supreme Court or repealed by a future Congress, according to Hicks.
Gene Bamber owns Bamber's Superette Food Market in South Bend, specializing in Italian groceries.
Bamber says American importers he works with largely held pricing amid tariffs.
Importers Bamber works with said they may apply for the refund.
“So, if they end up getting a refund, then they'll take that to offset the price increase that they absorbed,” said Bamber.
The main price increases he’s seeing now are directly related to freight and shipping costs.