Trade & Tariff Update #21 - The Administration Post-Supreme Court Ruling and More

The Administration Post-Supreme Court Ruling

The Trump Administration continues to advance its tariff agenda following the Supreme Court’s opinion on the IEEPA tariffs.  While it has indicated that it will soon increase the current 10% Section 122 tariffs to 15%, this has not been confirmed.   

United States Trade Representative Jamieson Greer stated last week that additional Section 301 investigations would be completed against major trading partners within five months to permit durable tariffs.  Investigations into China and Brazil currently are underway and the others are expected to begin soon.   

States and Customs and Border Protection (CBP) Also Active  

Last week a group of 20 states filed suit against the new global tariffs, arguing that President Trump is overreaching his power with the announced 15% rate against many countries.   The states claim that the President’s pivot to Section 122 to impose sweeping tariffs is unlawful as that statute is intended only for use in certain specific and limited circumstances.  Plaintiffs also argue that the Section 122 tariffs will increase costs for states, businesses and consumers.  

The Court of International Trade (CIT) Weighs In

Last week on March 4, the Court of International Trade (CIT) issued a Refund Order requiring the illegally collected IEEPA tariffs to be refunded.  The Refund Order directed the CBP to:

• Liquidate any unliquidated entries without IEEPA tariffs and 

   

• Reliquidate without IEEPA tariffs any liquidated entries not yet final  

Liquidated entries that have become final were not addressed in the Refund Order. Importantly, the CIT held that its Order applied to all importers, not just those who filed claims. 

The government’s request for a stay so that it could immediately appeal the Refund Order was denied, but the government is expected to appeal.  A summary of the Refund Order may be found here. 

Prior to a closed-door hearing on March 6 to discuss refund processes, CBP informed the CIT that while currently it lacked the technology or manpower to process the refunds, it expects enhanced functionality in its Automated Commercial Environment (ACE) system to receive importer refund requests within 45 days.  CBP anticipates a process through which importers submit declarations in ACE identifying entries where IEEPA duties were paid.  Next ACE would validate the entries, recalculate duties excluding IEEPA tariffs (including interest), and process refunds electronically through the United States Treasury.  Due to the large volume of affected entries, CBP expects that the entire refund process could take several months or more to complete, so it appears possible that the government will accept the court order. 

Possible Next Move for the Administration   

At the same time it has been reported that President is reviving previously suggested plans to issue $2,000 tariff rebate checks to Americans.  As the previous anti-tariff campaign rhetoric argued that consumers have borne the brunt of tariffs, this move could muddy the waters.  While not backed by CPI data, the argument that the businesses that paid the tariffs have already recouped them through higher prices has been accepted by Congress and numerous states.  If the Administration sues to provide the direct refunds, it could set up a lengthy battle that positions the Administration as the ally of consumers against “greedy corporations” who – through higher prices charged --already have been reimbursed for tariffs. 

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Disclaimer from Progressive Trade Consulting: PTC is not a law firm, does not practice law, and does not provide legal advice. The Client should consult legal counsel for any legal matters, including trade compliance. The Importer of Record (IOR) is responsible for complying with customs regulations and managing the import process. This includes obtaining required licenses and permits, classifying and valuing goods correctly, declaring goods accurately, paying duties and taxes, following import rules, and maintaining proper records.