What will happen if the US trade court ruling against American President Donald Trump’s reciprocal tariffs is upheld? If that happens, it could necessitate the Trump administration to refund billions in import duties that have already been collected!On Wednesday, the US Court of International Trade (CIT) panel, comprising three judges, determined that the International Emergency Economic Powers Act (IEEPA) did not authorise Trump to implement extensive tariffs or circumvent Congress’s traditional authority over economic and commerce policies. Trump had referenced this 1977 legislation to validate most of his tariff implementations, particularly those announced on “’Liberation Day’ in early April.According to a NewsWeek report, Todd Tucker, a trade specialist from the Roosevelt Institute in New York, shared on BlueSky on Thursday: “This will do tremendous damage to Trump’s agenda. His whole second term seemed to be DOGE, deport, and (trade) deals.” He further questioned: “On trade, in particular, why would any country waste time negotiating to lower his tariffs if he can’t impose them in the first place?”The government has lodged an appeal with the Court of Appeals of the Federal Circuit, describing the CIT’s decision as a “judicial coup.” Experts suggest alternative methods remain available for Trump to implement his trade policies in response to the ruling.Will Trump Be Forced To Refund?The NewsWeek report said that if the ruling is upheld it could mean the Trump administration will have to reimburse the substantial import duties already collected. Whilst The Kobeissi Letter assessed collected tariff revenue at $10 billion since April 2, Newsweek’s examination of Treasury Department records indicates potentially larger amounts.Also Read | ‘Work of fiction…’: Will Donald Trump bury US government in debt with multitrillion-dollar tax breaks? Even Elon Musk is concerned“I think that the court’s order should lead CBP (US Customs and Border Protection) to suspend liquidation of entries going forward, which would mean that if the court’s decision is ultimately upheld, importers can get their money back,” stated William Reinsch, who served as under secretary of commerce for export administration during the Clinton administration and led the National Foreign Trade Council from 2001 to 2016.Importers, including American companies and overseas exporters who are bound by contract to pay import duties, might qualify for refunds. However, according to Reinsch’s statement to Newsweek, consumers are “probably not” likely to receive any refunds following the CIT’s ruling, despite having paid higher prices for imported products in recent months.“The people who paid the tariffs—the importers—might get their money back, but they would not be obligated to pass that on to consumers, although some might choose to do so as a matter of goodwill,” he explained. He further expressed doubt about the success of any potential legal action by consumers against the government for compensation.According to the report, legal experts suggest that importers could potentially take legal action against the administration for goods that have already cleared customs procedures.The administration under Trump has recognised its obligation to reimburse specific tariff payments in cases where duties are subsequently eliminated or reduced. Following a decision in late April that determined certain tariffs should not be ‘stacked’ or applied cumulatively, Trump issued an executive order stating this would have retroactive application to particular tariffs. The order also confirmed that reimbursements for those who had paid increased import duties would be handled according to existing laws and standard CBP refund procedures.When announcements were made regarding exemptions to Trump’s reciprocal tariffs, similar details were provided. The CBP has also issued instructions detailing how importers can seek refunds for duty payments on items where tariffs were later withdrawn or decreased.Also Read | ‘Went COLD TURKEY, it was devastating for them…’: Donald Trump slams China for ‘violating’ trade agreement with US – what went wrong this time?Tariff Impact: $34 billion losses and counting…and counting..Meanwhile, corporate disclosures reveal that Trump’s trade policies have resulted in companies losing more than $34 billion through decreased sales and increased expenses, as per Reuters’ evaluation. This impact is likely to grow as businesses struggle with uncertainty surrounding tariffs, affecting operational decisions at major global corporations.Prominent organisations across three continents have seen significant setbacks. Notable examples include Apple, Ford, Porsche and Sony, which have either withdrawn or substantially reduced their profit projections. Most companies indicate that the unpredictable implementation of Trump’s trade measures has rendered precise cost calculations unfeasible.The combined total of $33 billion represents calculations from 32 S&P 500 firms, three STOXX 600 enterprises and 21 Nikkei 225 organisations. According to financial experts, the actual business impact is expected to significantly exceed the currently reported figures.“You can double or triple your tally and we’d still say … the magnitude is bound to be far greater than most people realize,” said Jeffrey Sonnenfeld, professor at the Yale School of Management, according to the Reuters report.The broader implications could prove more severe, Sonnenfeld noted, pointing to possible reductions in consumer and business expenditure, alongside heightened inflation projections.Also Read | ‘Even if we lose…’: Donald Trump administration readying two-part strategy to impose reciprocal tariffs, says ‘we will do it another way’
