You probably won\u2019t receive a huge tariff refund.<\/p>\n
The largest businesses stand to reap the biggest bucks as the Trump administration begins to return more than $166 billion<\/a> in duties deemed illegal by the Supreme Court. Even though President Trump\u2019s trade policies have led to higher prices for companies and consumers, many families aren\u2019t in line to benefit directly from the coming refund checks.<\/p>\n The discrepancy is a reflection of the nation\u2019s complicated import laws \u2014 and the ever-fluid nature of Mr. Trump\u2019s trade war.<\/p>\n When the government applies taxes to foreign goods, it charges the firms and brokers that bring those items into the country. Those costs proved substantial during the president\u2019s first year back in office, after he imposed a set of so-called reciprocal tariffs<\/a> on nearly every U.S. trading partner.<\/p>\n But a majority of justices on the nation\u2019s highest court struck down those duties in February, forcing the administration to pay back much of its coveted tariff revenue. As a result, the government owes refunds to the importers on its record books \u2014 meaning companies, in many cases \u2014 even if those businesses ultimately shifted the costs of Mr. Trump\u2019s taxes on to their customers.<\/p>\n The beneficiaries may include retail giants, such as Costco, Gap, Home Depot, Kohl\u2019s, Lowe\u2019s, Target and Walmart. For some, analysts estimate that the refunds may total into the billions of dollars apiece, leaving them with a choice of whether to keep the money or share it with consumers, even if indirectly in the form of future discounts.<\/p>\n But almost none of those U.S. retailers commented by Thursday on their exact plans. Only Costco promised previously to pass savings on to customers, without explaining how, as the buy-in-bulk company faces one of a series of class-action lawsuits from furious Americans who believe they are owed refunds.<\/p>\n Heather Boushey, who served on the White House Council of Economic Advisers under President Joseph R. Biden Jr., described the refund process as a \u201cwindfall for businesses,\u201d some of which foisted the tariffs on consumers.<\/p>\n \u201cAmerican families,\u201d she added, \u201care certainly the losers.\u201d<\/p>\n That could turn the tariff refunds into a divisive political issue, at a moment when a majority of voters have already expressed dissatisfaction with the president\u2019s handling of the economy. Democrats have demanded that the administration return the money to families, but Mr. Trump has opposed returning the money at all \u2014 and he suggested this week that it would be \u201cbrilliant\u201d if companies chose to forgo repayment.<\/p>\n The White House did not respond to a request for comment.<\/p>\n For more than a year, Mr. Trump has insisted that foreigners, not Americans, have shouldered the financial burden of his punishing global trade war. But the data has always told a more complicated story, one in which Americans have actually been left to pay a substantial toll.<\/p>\n One measure from the Federal Reserve Bank of New York, published in February, estimated that nearly 90 percent of the economic burden<\/a> from Mr. Trump\u2019s duties had fallen on U.S. companies and consumers. Its findings prompted an unusually harsh rebuke from the White House, which attacked the report\u2019s economists for a conclusion at odds with the president\u2019s beliefs.<\/p>\n Mr. Trump\u2019s tariffs have also threatened to cut into families\u2019 finances. Studying Mr. Trump\u2019s latest rates in April<\/a>, the Yale Budget Lab, a think tank, estimated that his policies could cause prices to rise as much as 1.1 percent in the short run, which would translate to an annual loss in income of about $1,500 per household. But it cautioned that its analysis rested on a set of assumptions about how Mr. Trump\u2019s rates might evolve.<\/p>\n After Mr. Trump unveiled his highest duties last spring, companies in particular tried a variety of tactics to blunt the financial impact. They slowed imports, reduced staff, paused development, renegotiated deals with suppliers or absorbed the bite of tariffs into their bottom lines. And in some cases, they raised prices.<\/p>\n The costs of Mr. Trump\u2019s trade war proved so staggering that some businesses sued in a bid to recover their money<\/a> even before the Supreme Court ruled on whether the president had acted illegally. The official refund process commenced only on Monday, and by the government\u2019s own count, the task ahead is monumental. By early March, there were more than 330,000 importers that had paid illegal tariffs on more than 53 million entries, customs officials said<\/a>.<\/p>\n Some of the refunds may be significant. Walmart, for example, may stand to recover more than $10 billion in previously paid tariffs, according to an analysis this month from Citi Research. Target could be due more than $2 billion, Nike could receive $1 billion, and Home Depot could see a more than $500 million refund, the report found.<\/p>\n Paul Lejuez, a managing director at Citi Research who focuses on department stores, said the estimates did not include interest owed by the government on those refunds. He cautioned that the figures were imprecise calculations derived partly from companies\u2019 financials.<\/p>\n Still, Mr. Lejuez said he expected retailers to face pressure soon from consumers, who want to see companies \u201cshow some signs of giving back.\u201d<\/p>\n At least three, FedEx<\/a>, UPS<\/a> and DHL<\/a>, have said they intend to share tariff refunds directly with customers. Frequently, the shipping giants pay tariffs as the official importers for shipped goods, but pass along the charges to the consumers, who placed the orders. Each said it would help customers recover money.<\/p>\n Other businesses have been more circumspect. At an April forum hosted by JPMorgan, John David Rainey, an executive vice president at Walmart, said he expected the big-box retailer to \u201ccertainly avail ourselves\u201d of any refund process. But he offered few clues on Walmart\u2019s plans for the money.<\/p>\n \u201cWe\u2019ve absorbed a lot of that,\u201d he told investors at the time, referring to the president\u2019s tariffs. \u201cIn some cases, we had to pass along that price increase to customers.\u201d<\/p>\n The lack of clarity has prompted some unsatisfied consumers to take matters into their own hands. In recent weeks, they have filed class-action lawsuits against FedEx, UPS and other brands, including Costco and Temu, the low-cost online marketplace, according to state and federal court records.<\/p>\n The lawsuits generally seek to recover money directly for shoppers, claiming that companies do not deserve to profit twice \u2014 first by raising prices on consumers, then from collecting federal tariff refunds plus interest.<\/p>\n \u201cThe consumer, for all intents and purposes, pays the tariff,\u201d a set of lawyers argued in their lawsuit against Costco, filed<\/a> in March. They asserted that the company\u2019s pursuit of a refund \u201cconstitutes unjust enrichment at the expense\u201d of customers.<\/p>\n David French, the executive vice president of government relations at the National Retail Federation, a lobbying group, said it would be difficult for companies to try to return money directly to consumers because executives cannot simply look at a tariff and \u201cpull out a specific price increase from a retailer\u2019s array of goods.\u201d<\/p>\n But he said he expected some companies to try to give back in other ways. \u201cIt may not be a specific item on a receipt that says, \u2018This is a tariff refund,\u2019 but you\u2019re going to see the money returned to customers in many cases,\u201d Mr. French said.<\/p>\n Echoing the sentiment last month, Ron M. Vachris, the chief executive of Costco, told shareholders that his retailer would try to \u201cfind the best way to return this value to our members through lower prices and better values.\u201d He also said that Costco did not \u201cpass the full cost\u201d of tariffs on to its members, and that calculating the \u201cexact impact\u201d of duties on prices was difficult.<\/p>\n Mr. Trump\u2019s tariffs are expected to change again, as the White House looks to resurrect its previous sky-high rates using another set of trade powers<\/a>. The president has already imposed a temporary, across-the-board tariff of 10 percent on most imports, using a provision of law that has been challenged in court<\/a>.<\/p>\n The expected losses from tariffs still represent a sharp departure from the gains that Mr. Trump had once promised to Americans. Initially, the president had said he would return some of the money collected from his duties to families in the form of a rebate check. The idea never gained much traction even among Republicans in Congress, yet the president still pledged repeatedly<\/a> to offer \u201ca nice dividend to the people,\u201d as he sought to shore up support for his economic agenda.<\/p>\n Mr. Trump does not appear to have mentioned the idea since losing at the Supreme Court, yet many Democrats have started to demand that his administration compensate families.<\/p>\n On Thursday, a group of Democratic lawmakers including Representatives Steven Horsford of Nevada and Suzan DelBene of Washington asked the top executives of Walmart, Target and other companies to ensure the coming tariff refunds \u201creach those who ultimately bore those costs.\u201d<\/p>\n