Companies scramble for tariff refunds as US prepares to launch claim process

"You have to be worried about what they could possibly do to jam things up," said the CEO of toymaker Basic Fun, which sells Tonka trucks, Care Bears and K'Nex construction toys.

The refund system is the latest twist in a battle over tariffs collected over the past year as part of President Donald Trump's effort to restructure U.S. trade relations. The shifting tariffs roiled global business as companies rushed to shift supply chains to avoid the import taxes and figure out who ultimately would pay the levies.

In February, the U.S. Supreme Court struck down the tariffs the Republican president pursued under a law meant for use in national emergencies.

In a court filing this past week, U.S. Customs and Border Protection said it completed development of the initial phase of the refund system, known as CAPE. It will consolidate refunds, so importers will get one electronic payment — with interest, when applicable — rather than processing refunds on an entry-by-entry basis. Critics of Trump’s tariffs pushed for a streamlined process.

A CBP spokesman said the agency created a system to "efficiently process refunds, pursuant to court order, for importers and brokers who paid" the duties.

Customs officials said as of April 9, about 56,497 importers completed the steps necessary to receive electronic refunds, an amount totaling $127 billion, or more than three-quarters of the total eligible to be refunded. More than 330,000 importers paid ​the tariffs at issue on 53 million shipments of imported goods, according to court filings.

Matt Field, CFO of heavy truck maker Oshkosh, is one of them. The Wisconsin-based manufacturer doesn't disclose how much it paid in emergency tariffs, but Field said it's an "impactful" amount. He said he's prepared to file for a refund as soon as the portal opens but may wait for the "system to settle."

Several importers said they are concerned about the durability of the new filing system, at least in the opening phase as thousands rush to upload their claims.

"It's not like Taylor Swift tickets going on sale," said Basic Fun CEO Foreman, who seeks $7 million in refunds, but with so many companies looking for a refund at the same time, there's "no telling if it crashes the portal."

There are plenty of potential logistics glitches.

"It'll be nice to get that money back," said Jason Cheung, CEO of Huntar Co., a U.S.-based toymaker with a factory in China. But he added, "it looks like the government is trying to make it difficult."

Cheung noted registration requires entering bank account information even though the government already has it for customs payments. Company names must be exact. "It took me five tries before we could get registered due to minor differences like 'company' versus 'co,'" he said.

Still, he said, the company has "no concerns" about getting a refund.

That sentiment was echoed by Rick Woldenberg, CEO of educational toy maker Learning Resources, one of the key plaintiffs in the court case that led to the tariffs' undoing.

"There are wrinkles, of course, but I am pleased to see the government do the right thing," he said. His company seeks more than $10 million.

Refunds can be claimed by any company that is the legal entity that paid the taxes, so the issue reaches beyond U.S. borders. German fan manufacturer ebm-papst said it registered on the portal.

But as the system "is a new functionality created by U.S. Customs, it remains to be seen how well the system will actually handle the bulk processing of refund claims," a spokesperson for the Mulfingen-based company said.

Companies prepping claims also said they worry about a last-minute Trump administration legal move that could slow the process. CBP has until early May to appeal the Court of International Trade's order requiring it create the tariff refund portal.

Meanwhile, the refund process opens a different challenge for many importers. "The real complexity here is how to deal with my customers, assuming we get the tariffs back," said Austin Ramirez, CEO of Husco International in Waukesha, Wis., which produces hydraulic components used in automotive and off-road equipment like bulldozers.

"The question is what we do with it, do we keep it, pass it on to them?" It’s a unique situation with each customer, he noted.

Just who gets the refunds became a political issue after U.S. consumers endured a year of tariff-elevated prices. The system is set up to refund the importer of record, not ultimate end users who paid higher goods prices as a result.

At a congressional budget hearing Thursday, U.S. Trade Representative Jamieson Greer — a key architect of the struck-down tariffs and of the new ones the administration seeks to install — was asked if the administration plans to refund households.

The attorneys general for the Democratic-led states who filed one of the lawsuits decided by the Supreme Court "asked for the money to go back to the companies," he said. He added, "they're getting what they asked for."