During APPA’s December Trade Talks video update on tariffs and trade policy, Craig Brightup, Rafe Morrissey and Rebecca Rizutti unpacked how current U.S. tariff policy is hitting pet product imports, what the recent Costco tariff refund lawsuit really signals, and what APPA members should be doing now to protect their businesses.
Here are the top three takeaways for companies across the pet industry supply chain, from manufacturers and brand owners to importers, distributors and retailers.
1. Costco’s Lawsuit Is a Warning Shot: Protect Your Own Refund Rights
The headline development: Costco has sued the Trump administration at the Court of International Trade (CIT), seeking a refund of the IEEPA/reciprocal tariffs it has paid on imported goods.
Rafe and Craig explained that this move is about more than one company, it’s a signal that large importers don’t trust that a favorable U.S. Supreme Court decision on emergency-power tariffs will automatically generate refunds for everyone. Instead, they’re taking an extra legal step to make sure they have standing to get money back later.
For small and mid-sized APPA members, that doesn’t mean you need your own high-profile lawsuit, but it does mean you need a strategy. Rebecca outlined a very practical playbook:
- Know your exposure
- Work with your customs broker to pull a report of all entries subject to the IEEPA/reciprocal tariffs
- Track entry dates, duty paid and liquidation dates.
- Use the tools you already have
- Request extensions of liquidation from U.S. Customs and Border Protection (CBP) when entries are approaching the 270-314 day window.
- Consider protective protests after liquidation where appropriate.
- Decide how far you want to go
- Some companies are now filing complaints with the Court of International Trade to suspend liquidation, mirroring Costco’s strategy.
- Others may opt to rely on the protest process instead, but that comes with risk if refunds later end up limited to unliquidated entries.
The key takeaway: In a world of Section 301 tariffs, Section 232 tariffs and IEEPA-based duties, doing nothing is a decision, and it may quietly lock you out of future refund opportunities if courts or policy shift in your favor.
2. Tariffs on Pet Products Are Up ~29%, While U.S. Manufacturing Still Can’t Fully Absorb the Shift
Rafe highlighted a recent report showing that tariffs on pet products have seen one of the largest increases, around 29%, since the beginning of the year, putting intense pressure on small businesses across the pet food, treats, toys and accessories categories. At the same time, U.S.-manufactured goods orders surged in September, suggesting that tariff policy is nudging more production and capital investment back into the United States.
Craig walked through one big driver: the “One Big Beautiful Bill Act”, which allows a 100% tax deduction for qualified production real property (factories and qualifying facility improvements) started between 2025 and 2029 and placed in service by 2031. That’s a powerful incentive for new U.S. manufacturing capacity and reshoring.
But Rebecca underscored why the picture is more complicated for APPA members:
- Labor is tight. Even where U.S. factories exist, many tell companies they simply don’t have the workforce to absorb new pet product orders right now.
- Not every category can realistically reshore. Plush toys, many soft goods and certain pet accessories are still structurally cheaper to produce overseas, even with higher import tariffs.
- Most companies are diversifying, not fully reshoring. Instead of moving everything to the U.S., many pet brands are:
- Shifting some production from China to other countries
- Keeping some volume with existing suppliers and absorbing tariffs
- Watching closely to see which HS codes may move from IEEPA to Section 232 or Section 301 coverage.
For APPA members in the pet products industry, this means:
- You need a true landed-cost analysis that factors in tariffs, freight, lead times and reliability, not just the nominal duty rate.
- Sourcing strategies should consider multiple countries, not a single binary choice between “China or U.S.”
- Any decision to move production should be stress-tested against the risk that tariff policy could shift again after the Supreme Court ruling.
3. Expect Tariffs to Stick Around: Plan for a 10–20% “New Normal”
One of the most important messages from the panel: tariffs are unlikely to go back to zero, even if the Supreme Court limits emergency powers under IEEPA.
Rafe suggested that the administration appears to be converging on a long-term vision of tariffs as an “access fee” to the American market, often in the 10-20% range, using more traditional tools like:
- Section 301 tariffs (e.g., on Chinese-origin goods)
- Section 232 national security tariffs (covering key industrial sectors like steel, aluminum and semiconductors).
Craig added some cautious good news for APPA members:
- The worst of the “on-again, off-again” volatility may be easing.
- Heading into 2026, with midterm elections approaching and a one-year U.S. - China trade truce in place, the administration has strong incentives to stabilize tariff rates so businesses can plan.
Rebecca closed by reminding members that, regardless of what happens at the Supreme Court, the clock is already ticking:
- Around 270 days after entry, you should be actively deciding whether to request liquidation extensions.
- Around 314 days and beyond, you are in the “red zone” and must decide whether to pursue CIT complaints or be prepared to protest after liquidation.
- Even in a more “calm” tariff environment, Section 301 and Section 232 duties will likely remain a fixture for many pet product importers.
What APPA Members Should Do Now
Across all three takeaways, the message for APPA members is clear:
- Get control of your data: Know exactly which entries, SKUs and pet product lines are exposed to which tariffs.
- Use your procedural tools: Extensions, protests and, where appropriate, CIT strategies can all help protect potential refund rights.
- Stay plugged into APPA’s trade resources: From Trade Talks Open Office Hours to ongoing tariff and trade updates on AmericanPetProducts.org, APPA is working to translate complex trade policy into clear next steps for the pet products industry.
Tariffs, trade policy and U.S. - China supply chain shifts aren’t going away. But with good information and a proactive plan, pet industry businesses can manage risk, protect margins and continue bringing innovative pet products to market.
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