mess<\/a>\u201d, customs brokers describe the refund process as starting better than expected.<\/p>\n\u201cIt is happening much faster than any of us thought it would,\u201d says Pete Mento, a director at Baker Tilly. \u201cCBP deserves credit for taking an idea and making it reality in such a short amount of time.\u201d <\/p>\n
As of April 26, importers had requested refunds covering 13.3mn import entries, according to a court filing. Some 1.74mn of them, or about 13.1 per cent of the total, have already been liquidated, meaning CBP is in the process of recalculating their tariff payments.<\/p>\n
Refunds won\u2019t arrive until at least June, with CBP aiming to transfer funds between 60 and 90 days after importers lodge their request, depending on the complexity of its review of each application.<\/p>\n
However, some businesses can already see that their levies have \u201cbeen recalculated without [IEEPA] tariffs and the refund they can expect to receive\u201d, says Cindy Allen, CEO of consultancy Trade Force Multiplier.<\/p>\n
Foreign and technical glitches<\/p>\n
Despite early signs of success, many businesses are failing to clear the first refund hurdles. This includes \u2018non-resident importers\u2019, which sell their products in the US without a physical presence in the country. These foreign firms usually don\u2019t have a US bank account, which is required to receive a refund. <\/p>\n
Some are applying for refunds via customs brokers in exchange for a fee. According to Mento, who knows a Chinese firm in this situation which has paid $10mn in IEEPA levies, not allowing these importers \u201cto get their money back on tariffs that were paid illegally is not very fair\u201d.<\/p>\n
Others are facing technical issues navigating the digitised process. Fewer than one-fifth of businesses that paid IEEPA tariffs are registered with its customs processing system, a prerequisite to requesting a refund. This system has become overloaded, with some importers being on hold with its helpline for nine hours.<\/p>\n
Among the refund requests lodged in the first week, the automated CAPE system has rejected those covering 15.9 per cent of entries, according to CBP. This can be due to rounding errors or other glitches easily fixed before resubmitting. <\/p>\n
But rejections are also due to errors in original tariff payments. Prime culprits are imports from the UK, EU and Japan in the weeks following their trade agreements with the US, which capped levies at 10 or 15 per cent. \u201cMany of the rejections we\u2019re seeing now were [for filings] not transmitted in accordance with guidance\u201d issued subsequently on how they should be stacked regarding other tariffs, says Allen.<\/p>\n
Further reading on US tariff refunds<\/p>\n
Outstanding questions<\/p>\n
For now, CAPE is dealing with so-called Phase 1 of the refund process, which covers 63 per cent of the most recent and straightforward IEEPA entries. It\u2019s not clear whether more complicated refunds will be processed via CAPE, another mechanism or the courts.<\/p>\n
Sara Albrecht, chair of the Liberty Justice Center which spearheaded the litigation that brought down IEEPA tariffs, says CBP\u2019s work to date is \u201can important milestone\u201d but \u201cmany businesses are still waiting for clarity on when and how the rest will be addressed\u201d.<\/p>\n
The prospect of being sued by customers for a stake in refunds for passing on tariffs via higher prices is \u201cstill a big issue\u201d for retailers, says Allen. Law firm Dentons has tracked almost two dozen such lawsuits, against the likes of Costco, EssilorLuxottica and Lululemon. <\/p>\n
Concern over mistakes in original tariff payments is also making importers hesitate to file refunds<\/a>. Sanne Manders, president of trade platform Flexport, which has already applied for more than a half a billion dollars\u2019 worth of refunds for clients, has seen increased use of its online tariff simulator and audit tools by importers worried about rejections.<\/p>\nFor now, however, refunds are progressing: so well that the process has stymied programmes set up to buy refund claims at a discount from importers who would rather avoid the process in exchange for a discount on their recovery. \u201cIf the timeline would have been a year I think this would have been a massive product,\u201d says Manders. \u201cBut 90 days is not that long.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"\u2018Liberation day\u2019 tariffs paid on more than 1.7mn US import entries are already in the process of being…\n","protected":false},"author":2,"featured_media":404782,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-404781","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/404781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=404781"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/404781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/404782"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=404781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=404781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=404781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}