Businesses are squeezed by Trump’s tariffs. Now some of them want to pay back their money
As chief merchandise officer at one of the largest sellers on Amazon, Owen Carr knew that his deck chairs ordered from his Chinese factory in early April would cost more than ever. That’s because the chairs that usually spend $79 on Amazon are the lowest tariffs for China (a high price imposed by President Donald Trump) when they arrived at a Seattle port in late April. “I paid more to customs than I paid for the factory itself,” Carl said. “I was confused in my mind.”
Now, his company Spreetail is part of a narrow importer asking if the Trump administration can get a refund. On May 12, Trump reached a 90-day trade war truce with China, reducing the minimum tariffs of China to 30%. From April 10 to May 14, it’s actually only one month.
A handful of trade lawyers who spoke with Wired said they have told clients that refunds are unprecedented and impossible — but not impossible. Businesses that have to pay higher interest rates believe they are unfairly bound in Trump’s hasty negotiations. “There is still a chance to refund,” said Michael Roll, a partner at Roll & Harris. “I won’t say there is hope. I won’t bet.”
Trump, Congress or the court will have to authorize the new tariffs that refunds to companies trapped in trade agreements become reality. Lawyers say their clients have been lobbying the Trump administration and lawmakers for exemptions, including retroactive measures, which will result in the return of funds. This is not a rash request. Companies that make cars, chips and drugs have remained with other tariff policies.
U.S. Customs and Border Protection, which governs tariffs and exemptions, did not respond to requests for comment regarding the possibility of refunds.
Trump believes his trade policy is crucial to increasing U.S. manufacturing and power over China. But, according to retail data and experts, his moves are beginning to erode the prices and product choices that our consumers are familiar with. Attorneys say offering 115% stake to businessmen who pay higher tariff rates will help avoid further price increases and allow them to hike on Trump’s renewal of tariffs to keep them floating. “It’s devastating, besides the most profitable, largest companies,” said Ron Oleynik, a partner at the law firm Holland & Knight.
Even if higher tariffs have been paid, there could be long-term consequences for small and medium-sized companies, lawyers said. U.S. rules require importers to hold bonds (effective insurance) so that the government can at least ask for some funds from companies that violate the law and do not pay. The level of insurance required depends on the total tariff payments for the business over the past 12 months; so does the total cost of the bond as coverage requirements increase. “I heard that if we have to raise the bond, it will kill us,” Oleynik said.
“Reward”
Companies such as Spreetail acknowledge the risks of importing goods after Trump imposed a 125% tax on Chinese imports last month. Many businesses decided not to place new orders, while others quickly stopped the ongoing shipment. But Carl said Spreetail wants to support its suppliers, or they may have to close the factory when the order falls. He also feels confident that he can raise the price enough to make the new import financially worth it.
Carl said Spreetail ended up paying higher rates on deck chairs, with about 200 other products from 20,000 IT imported products, including razors, Chargepoint EV Chargers and Instrilite boxes. It pays up to 190% of the rate after considering tariffs on specific items. “We won’t be able to recover the money,” Carl added.
