This coat cost $248 in illegal tariffs. Will he ever get the money back?
This coat cost $248 in illegal tariffs. Will he ever get the money back?
Alex Grossomanides, a 37-year-old personal trainer from Massachusetts, believed he had found a bargain last year when purchasing a down jacket from France. However, he soon discovered that the total cost included over $400 in tariffs and processing fees—almost as much as the jacket itself. The unexpected expense stemmed from the fact that the parka was manufactured in Myanmar, a country subject to a 40% tariff, which added $248.04 to his bill.
Supreme Court Ruling Sparks Refund Process
The Supreme Court recently invalidated the duty, alongside dozens of other tariffs introduced by former President Donald Trump, triggering a potential refund system. This could become the largest repayment program in U.S. history, with customs officials ordered to return more than $160bn collected from importers. Around 330,000 businesses are now eligible for reimbursement, though many, like Grossomanides, fear they may not be included.
“They should be refunding people,” Grossomanides said. “It’s all my money and I took the hit for it, which I don’t think is fair.”
While the refund process is underway, experts note that reversing the financial impact will be challenging. Studies suggest most businesses have already passed on the majority of tariff costs to consumers through higher prices, a factor not addressed in the court rulings. For example, Sue Johnson, a California-based lamp maker, faced a 100% price increase for mica from her supplier, yet she expects no relief from the Supreme Court decision.
“Maybe they’ll get repaid, but I have no hope they’re going to refund me,” Johnson said.
Refunds May Not Fully Restore Lost Funds
Importers argue the process is complex. Though some raised prices, they often did not cover the full tariff burden, leading to additional costs like debt and lost sales. Kacie Wright of Houghton Horns, a Texas-based musical instrument importer, described the situation as “still not making us whole” despite refunds.
“Even if we do get refunds, we are still not going to be made entirely whole,” Wright said.
Legal analysts like Jared Slipman, chair of Obermayer’s tax department, highlight the administrative hurdles. He noted that businesses must compile information to claim refunds, a task many small companies may find daunting. “The juice is not worth the squeeze” for some, he said, with others potentially resorting to litigation to recover their losses.
Consumers, he added, “get the worst of it.” Slipman warned that the tariffs could represent an “orchestrated theft from the American consumer,” raising concerns about the long-term effects. James Tak, a Washington resident, shared his frustration after a $24 charge from UPS on a gift of video games from Japan. “I just think it’s money I shouldn’t have to pay,” he said.
Some shipping firms, such as FedEx, have pledged to pass refunds to businesses and consumers. However, many importers have made only vague commitments, particularly those who distributed tariff costs indirectly. As the refund system prepares to launch, the debate over who bears the brunt of the financial burden continues.