The process for firms to claim potential refunds for import taxes paid under President Donald Trump's sweeping emergency tariffs will likely "lengthy and challenging," according to analysts at Raymond James.
While the Supreme Court held that Trump's use of a 1977 emergency powers law to enact sweeping duties on a host of countries was unlawful, questions swirled around the ramifications of the ruling, particularly the fate of refunds potentially owed to companies impacted by the tariffs.
The U.S. Customs and Border Protection agency has said it will halt collecting tariffs struck down by the Supreme Court at 12:01 a.m. EST (05:01 GMT) on Tuesday -- but did not expound on why it was even taking in levies at ports of entry days after the ruling, nor say whether importers would receive possible refunds.
In a message to shippers, the CBP said the collection halt will not apply to any other tariffs set by Trump, such as those under national security and unfair trade practices statutes.
Writing in a note, the Raymond James analysts including Ellen Ehrnrooth and Ed Mills flagged that litigants demanding any refunds will need to bring individual cases or participate in class action lawsuits, rather automatically having the surcharges returned to them.
Over the weekend, Trump announced 15% global tariffs after the U.S. Supreme Court ruled against his use of emergency powers to impose sweeping levies on a host of major trading partners, including the EU. An official White House communication had initially stated that the tariffs would be placed at 10% as of Tuesday, but Trump later raised that figure.
Crucially, the U.S. Congress, whose constitutionally-mandated trade powers were at the core of the Supreme Court's argument to strike down Trump's emergency tariffs, could extend his across-the-board 15% tariffs after they legally expire in 150 days.
But, in theory, the president could allow the levy to expire, declare a new emergency, and restart the 150-day period all over again, effectively creating a "de facto perpetual tariff instrument," analysts at ING flagged.
Source: Investing