International Emergency Economic Powers Act

Angry Bear is fortunate to have an association with a writer at the Tax Foundation. While it may not be similar content, it does offer a different view. Guest Commentary by Erica York.

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Customs and Border Protection (CBP) continues preparing to refund more than $166 billion in unlawfully collected tariffs plus interest; it’s a process that will rightly return funds to importers of record, but that will leave consumers, workers, and downstream businesses who shared the burden uncompensated.  While the refund process follows the correct legal framework, it cannot address the broader economic harms caused by President Trump’s tariff agenda.  

The timeline for refunds still remains uncertain. As of March 19, CBP reported that the various components of a new refund tool under development are between 45 percent to 80 percent complete. The process of claiming refunds will itself create additional compliance costs for importers and may be particularly onerous for small businesses to navigate.  

Even when refunds begin flowing, payments will not necessarily flow to the same people who ultimately bore the economic burden of tariffs through higher prices or lower incomes. Nor will refunds compensate businesses and workers for the uncertainty, disrupted investment, and lost growth caused by the tariffs themselves. 

Evidence from the Harvard Pricing Lab indicates that last year’s tariffs have partially passed through to retail prices, pushing consumer prices higher than they would have been without the tariffs. At the same time, evidence from the 2018-2019 trade war indicates foreign sellers may have experienced greater losses than previously understood. Recent polling also finds that a majority of Americans, even across party lines, believe tariffs have led to higher prices. 

Because of that mismatch, various state policymakers as well as members of Congress have called for policies that would help compensate consumers. Any such laws have little chance of passing, but, combined with a growing number of class action lawsuits from consumers seeking refunds for tariff-induced price hikes, companies may face increased pressure to share their tariff refunds. 

Legal incidence is the correct basis for tariff refunds from the government, but it won’t make whole the other groups that have been harmed or erase the additional losses caused by the policy itself.   

Erica York

Vice President of Federal Tax Policy

Tax Foundation