Refund details

The Trump administration has repaid importers roughly $100bn in tariffs collected before the Supreme Court ruled the underlying duties unlawful, according to customs officials and court filings. The figure represents about 60% of the total collected under the president's trade policy, which multiple reports put at $165bn or $166bn.

US Customs and Border Protection disclosed in a filing with the US Court of International Trade that it had returned more than three-quarters of $128.68bn in tariff revenues earmarked as "potential and certified refunds". "CBP's financial accounting system receives updates from Treasury that indicate these CBP certified refunds are being regularly dispersed," Brandon Lord, executive director of CBP's Trade Policy and Programs directorate, said in the filing.

Legal background

The refunds follow the Supreme Court's 6-3 ruling in February that President Donald Trump exceeded his authority when he invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose fentanyl-related tariffs on Canada, Mexico and China, and broader "reciprocal" tariffs on more than 90 countries. The court found IEEPA did not authorise such duties. Trump denounced the ruling, branding the six justices who sided against him "fools" and "lapdogs" for the Democratic Party.

The ruling did not nullify tariffs on specific industries invoked under the 1962 Trade Expansion Act, leaving intact duties on steel, automobiles and copper. Following the Supreme Court's decision, the US Court of International Trade in March ruled that companies affected by the invalidated tariffs should be refunded.

Company windfalls

The refunds have provided a significant financial boost to several large companies. Target received a $994m pre-tax reimbursement, which helped double its second-quarter operating income to $2.6bn from $1.3bn a year earlier. Chief financial officer Jim Lee said, "We have and will continue to invest in price." The retailer, which has been reducing its reliance on Chinese sourcing, has cut prices on more than 10,000 items over the past year.

Nintendo reported a 53.5% profit surge to ¥147.4bn (£694m) in the three months to June, beating forecasts, with the company attributing the gain to tariff refunds. Nintendo had filed a lawsuit after the Supreme Court ruling demanding a full refund plus interest. The company's Tokyo-listed shares rose 2.87% after the earnings release. Estée Lauder recorded a $38m benefit in cost of sales from tariff refunds, and its share price jumped about 17% after results exceeded expectations.

New tariffs and legal challenges

Despite the court ruling, the administration has continued to impose duties through other legal mechanisms. Last month, it announced levies of 10-12.5% on imports from dozens of countries, claiming insufficient action on forced labour. These tariffs were introduced under section 301 of the Trade Act of 1974, which targets countries that engage in forced labour.

On Monday, a coalition of 25 US states, including New York, California, Arizona and Colorado, filed a legal challenge against the latest tariffs, calling them a pretext to re-impose the duties struck down in February. The states have asked the court to stop the tariffs, declare them unlawful and order refunds of duties already paid. They argue the tariffs on 59 countries and the EU cover 99.4% of US imports. New York attorney general Letitia James said the administration was "once again trying to illegally raise taxes on families and businesses with a new round of tariffs".

Trade tensions continue

Trump has argued the trade policy will boost American manufacturing and jobs, but economists have warned that consumers may face higher prices as businesses pass on extra costs. The president has threatened to impose a 50% levy on nearly $20bn (C$28bn) worth of imports from Canada, and announced on Monday a three-day delay in introducing new import taxes on various Canadian goods as negotiations continue. The two sides remain at an impasse over issues including US tariffs on autos and Canadian province-level bans on American liquor sales. Meanwhile, the administration has said countries have not done enough to crack down on products made by forced labour, justifying the new tariffs.