The Trump administration will begin refunding $166 billion in tariffs through the newly established Consolidated Administration and Processing of Entries system, which launched Monday.
According to The New York Times, the online portal to facilitate these refunds will be administered by the U.S. Customs and Border Protection. The system will repay importers, brokers and businesses who paid tariffs during its first phase, but consumers are not guaranteed refunds.
The administration is issuing refunds just a year after President Donald Trump implemented tariffs on 57 countries. The measures follow a 6-3 Supreme Court decision on Feb. 20 that Trump’s use of the International Emergency Economic Powers Act of 1977 to declare the U.S. trade deficit a national emergency, prompting the initial tariffs, was unconstitutional.
The Supreme Court majority in the ruling did not directly order refunds, yet the Court of International Trade intervened in March to ensure the government returned the money to importers, despite Trump’s continued opposition.
According to The New York Times, over 3,000 businesses have already sued the Trump administration prior to the website’s launch to secure refunds, with others filing cases before the Supreme Court issued its ruling.
U.S. CBP estimated that importers spent a total of $166 billion on over 53 million shipments. According to Fortune, all refunds are expected to be issued within 60 to 90 days of initial approval.
The first phase of the refund process focuses on “unliquidated entries” where the tariff payment hasn’t been finalized. This will also allow refunds for goods within 80 days of finalizing tariff payments, which is expected to cover about 63% of the duties paid under the International Emergency Economic Powers Act.
According to the accounting firm PwC, the sectors most affected by refunds are technology, media and telecom, and industrial and manufacturing, all of which are especially prominent in Los Angeles.
“Los Angeles is a particularly international city. When it comes to trade. We get lots of items that come from all over the world,” said USC professor Douglas Becker in the political science and international relations department. “It’s good for L.A. consumers that they’re not having to pay that tax internationally.”
But Los Angeles consumers are affected in other ways. The CNBC CFO Council surveyed 25 chief financial officers and found that, of the 12 who applied for tariff refunds, none plan to share the money with their consumers.
There is no legal requirement for businesses to share any proceeds with customers, according to the Los Angeles Times. Yet, several companies, such as Costco and FedEx, have already stated that they will attempt to reimburse shoppers. FedEx stated that the company “will issue refunds for IEEPA tariffs paid to the shippers and consumers who originally bore those charges.”
Despite this tariff reversal, Trump is continuing to find alternatives to implement tariffs under different statutes. The Trump administration has begun delving into other countries’ trade practices through a provision of the 1974 Trade Act, which would result in tariffs similar to those the Supreme Court overturned. Yet this tariff reversal may offer significant benefits to the government as well.
“President Trump will actually benefit from returning this money. I tend to think it’s probably going to have an anti-inflationary trend, which is good for everybody,” Becker said. “This is going to put more money in a producer’s pockets and businesses’ pockets that should help to defray the cost of the increased cost of materials, and generally, of the cost of producing stuff, which may slow inflation.”
For students living in Los Angeles, a city heavily impacted by tariffs on imports due to its international trade through the Port of Los Angeles, rising product prices are not going unnoticed and are affecting consumer choices.
“Now I’m being more cautious of what I buy because I’m trying to budget too, so I don’t want to overspend,” said Anahi Alvarez, a senior majoring in psychology, referring to goods she regularly purchases increasing in cost. “I just feel like it’s limiting my options to kind of enjoy life in a way.”
While many students are recognizing the personal impact of rising prices on everyday spending habits, these tariffs also cause broader economic consequences within Los Angeles and its major port systems.
“I think this is first of all bad for the people of the United States,” said Sarah Taylor Gover, a senior majoring in mechanical engineering. “If you sustain high tariffs for a long time, that will reduce the amount of consumer goods that flow through the ports, which will negatively affect Los Angeles and Long Beach in the long term.”
Isabella Bournazian contributed to this story.