As the chief merchandising officer for one of the largest sellers on Amazon, Owen Carr knew that the deck chairs he ordered from a Chinese factory in early April would cost him more than ever before. Thatâs because the chairs, which normally go for $79 on Amazon, were among the first Chinese imports subject to minimum tariffs of 145 percentâa sky-high rate imposed by President Donald Trumpâwhen they arrived at a port in Seattle in late April. âI was paying more to customs than to the factory for the good itself,â Carr says. âMind boggling.â
Now his company, Spreetail, is part of a narrow class of importers asking whether the Trump administration might provide a refund. On May 12, Trump reached a 90-day trade-war truce with China, cutting the minimum China tariffs to just 30 percent. The higher rate was in effect barely a month, from April 10 through May 14. âWe did think there would be an agreement, but we didnât think it would be that fast and that low,â Carr says.
A handful of trade attorneys who spoke with WIRED say they have told clients that refunds are unprecedented and unlikelyâbut not impossible. Businesses that had to pay the higher rate believe they were unfairly ensnared in Trumpâs hasty negotiations. âThereâs still a chanceâ of refunds, says Michael Roll, a partner at Roll & Harris. âI wouldnât say thereâs hope. I wouldnât bet on that.â
Trump, Congress, or the courts would have to authorize a new tariffs exemption for companies caught up in the trade deal for refunds to become a reality. Attorneys say their clients have been lobbying the Trump administration and lawmakers for exemptions, including retroactive measures that would result in money back. Itâs not a frivolous request. Companies that make cars, chips, and drugs have been spared from other tariff policies.
US Customs and Border Protection, which administers tariffs and exemptions, did not respond to a request for comment about the possibility of refunds.
Trump views his trade policies as crucial to increasing US manufacturing and gaining power over China. But his moves are beginning to erode the prices and product selection long familiar to US consumers, according to retail data and experts. Giving 115 percent back to merchants who paid the higher tariff rate would help avert further price increases and allow them to stay afloat if Trump renews tariff hikes, attorneys say. âFor all but the most profitable and largest companies, this has been devastating,â says Ron Oleynik, a partner at law firm Holland & Knight.
Paying higher tariffs even once can have long-term consequences for small-to-midsize companies, attorneys say. US rules require importers to hold a bondâeffectively insuranceâso that the government can claim at least some funds from companies that flout the law and donât pay what they owe. The level of insurance required is determined by a businessâ total tariff payments over the past 12 months; as coverage requirements rise, so do the overall costs of the bond. âI have heard this is going to kill us if we have to up our bonds,â Oleynik says.
âDollars Backâ
Companies such as Spreetail recognized the risks of importing goods after Trump imposed a 125 percent tariff on Chinese imports last month. Many businesses decided against placing new orders, and others quickly halted shipments that were in progress. But Carr says Spreetail wanted to support its suppliers, who might otherwise have had to shut down factories as orders tumbled. He also felt confident that he could raise prices enough to make new imports financially worthwhile.
Spreetail ended up paying elevated rates on the deck chairs and about 200 other products out of the 20,000 it imports, which include Razor scooters, ChargePoint EV chargers, and Sterilite boxes, Carr says. It paid rates as high as 190 percent after accounting for item-specific tariffs. âWe will not be able to get those dollars back,â Carr adds, perhaps resigned to the limited prospect of refunds.