The U.S. government is rolling out an online portal next week to help businesses claim refunds for tariffs deemed illegal by the Supreme Court. However, legal experts warn that getting these refunds won’t be easy.
The U.S. Customs and Border Protection (CBP) agency will launch this portal, called CAPE (Consolidated Administration and Processing of Entries), starting April 20. Companies can submit claims for tariff refunds through this system. After a recent Supreme Court ruling, the government may owe businesses up to $175 billion for tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
While CAPE aims to simplify the refund process, it places the onus on businesses. Instead of automatically processing refunds, CBP requires each importer to submit claims. Trade attorney Lizbeth Levinson pointed out that this means businesses must do much of the work themselves.
### Who Can Claim Refunds?
Only two groups can use CAPE to apply for refunds: businesses that directly paid IEEPA tariffs and customs brokers acting on their behalf. Consumers affected by increased prices on imported goods are not eligible.
### Are Refunds Automatic?
Refunds are not automatic. Businesses must actively apply and wait for CBP to review their claims. Levinson emphasized that the process requires careful preparation from each importer, which adds another layer of complexity.
### Eligible Tariffs
Only certain IEEPA tariffs qualify for refunds. Initially, CAPE will accept claims for unpaid tariffs and those finalized within the last 80 days. This offers some relief, as it covers about 63% of IEEPA duties. However, many companies still face uncertainty regarding their eligibility, as past claims that have already been liquidated are excluded.
### Estimated Timeline for Refunds
CBP states that valid claims will be processed within 60 to 90 days of approval. But errors could slow things down, especially if incorrect tariff codes are submitted. Flexport’s president, Sanne Manders, noted that getting refunds could take months or, in some cases, even years for certain duties.
### Expert Opinions
Many experts are watching closely as the launch date approaches. Adam Hanover from CohnReznick Advisory expressed doubts about the system’s efficiency: “I am still not sold that the system is going to work.” Meanwhile, Blake Harden from Ernst & Young appreciated the progress but is cautious, saying, “Time will tell how effective it is.”
### Alternatives for Businesses
Given the challenges, some businesses might consider skipping the refund process altogether. Certain hedge funds and financial services firms are offering to buy tariff refund claims, providing immediate cash to importers. Manders pointed out that this route appeals to businesses needing quick funds.
For example, Rick Woldenberg, CEO of Learning Resources, believes his company is owed up to $12 million in refunds. He’s eager to be among the first to use the refund portal, though he wishes the process were more straightforward, similar to receiving tax overpayments.
As the portal prepares to launch, businesses are gearing up for a complex and uncertain process. It’s essential to stay informed about eligibility and the types of claims accepted to navigate this challenging landscape effectively.
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Supreme Court of the United States, Tariffs
