How Costco could get its tariff money back

Politics & GovernmentHow Costco could get its tariff money backWith Trump's tariffs potentially on the Supreme Court chopping block, one example from the 1990s holds lessons for how a refund process might workByJoseph Zeballos-RoigPublished 19 hours ago|Updated 8 hours agoShare to XShare to FacebookShare to RedditShare to EmailShare to LinkScott Olson/Getty ImagesA version of this article originally appeared in Quartz’s Washington newsletter. Sign up here to get the latest business and economic news and insights from Washington straight to your inbox.The Supreme Court is deciding the fate of President Donald Trump’s global tariffs — and major companies like Costco are getting in line for a possible refund. About $88 billion worth of import taxes collected through the end of October are at stake, per Customs and Border Protection data.What happens next is still up in the air. The U.S. government, though, has been obligated to pay back private firms before. One specific example from the late 1990s has caught the attention of trade analysts and major law firms as a blueprint for how a refund process could be structured.“There's precedent for it and the data, the systems are in place for it to actually happen pretty smoothly if it was an administration that wanted to do so,” Jacob Jensen, a trade policy analyst at the right-leaning American Action Forum, told Quartz Washington.In 1998, the high court struck down a harbor maintenance tax first placed on exports transported by ship during the Reagan administration.

The Supreme Court ruling at the time handed a victory to companies like Chevron, which filed a lawsuit challenging the levy as a violation of the constitutional ban on export taxes. It set the stage for a $750 million refund affecting thousands of companies, and cash flowed beyond those directly involved in the case.James Min II and Chelsea N. Ellis, a pair of trade lawyers for LMD Trade Law, observed that an immediate refund was ordered. A process was established in which exporters were allowed to file a claim with CBP’s predecessor agency to demonstrate they paid duties on imports in the preceding five years.Companies hoping for a speedy affair, though, were left disappointed. It took almost two years for the federal government to send out the refunds. Then another Supreme Court decision in 2000 ultimately broadened the refund window to all duties paid since the law’s inception in 1987.Trade experts say that companies subject to Trump’s tariffs are nearing a critical window known as “liquidation,” the 10-month threshold when CBP’s assessment of rates and duty amounts paid becomes final. The first of the tariff barrage hit China in early February, a precursor to April’s more sweeping “Liberation Day” tariffs.Once the liquidation period is up, businesses have six months to challenge the CBP’s calculation if they disagree. At that point, they have to jump through more bureaucratic hoops to get their money back. For a well-known warehouse club giant like Costco, it appears the risk of staying on the sidelines was too high. And more firms may follow its lead to preserve a legal right to a refund in the coming weeks. Already, Revlon, EssilorLuxottica — maker of the Ray-Ban sunglasses — Kawasaki Motors and BumbleBee Foods are among the companies challenging the administration in court. “I think it tells you that the business community really thinks that the administration is either going to be unwilling or unable to administer the refund process in an orderly fashion,” said Tim Meyer, an international business law and trade professor at Duke University. “They really expect that getting money from the administration through that administrative process is not going to be a pleasant experience.”In Costco’s case, the refund could be substantial. About a third of its sales stem from imported products, the company said in a May earnings call.Peter Harrell, a trade expert at Georgetown Law’s Institute of International Economic Law, estimated Costco could be in line for a $1 billion payout from the federal government.The tariff case has lingered in Trump's mind. On Monday morning, he blasted out a social media post praising tariffs as his favorite tool to level the playing field of global commerce.“We have a big decision,” Trump said at a White House event later that afternoon. “Hopefully we're going to get the right decision.” He ended the day by threatening a 5% tariff on Mexico and claimed they were violating a water treaty.📬 Sign up for the Daily BriefOur free, fast and fun briefing on the global economy, delivered every weekday morning.Sign me upThe Palatial: 3.5, 4.5 BHK Luxury ResidencesNew Launch: 3.5, 4.5BHK Homes starting @ ₹4.96 Cr*, Dwarka E-way.Hero Homes | SponsoredSponsoredLearn MoreUndo4.5BHK Homes starting @₹6.05 Cr*, New LaunchNew Launch: 3.5, 4.5BHK Homes starting @ ₹4.96 Cr*, Dwarka E-way.Hero Homes | SponsoredSponsoredLearn MoreUndoPrateek Grand Begonia Siddharth Vihar, GhaziabadLuxury 2 & 3 BHK Apartments from Rs.1.30 Cr* At Siddharth Vihar, GhaziabadPrateek Group | SponsoredSponsoredBook NowUndoMountain Gear for Extreme ConditionsShop the best in outdoor gear and apparel. High-altitude jackets, trekking boots, and more for your next adventure.Trek Kit India | SponsoredSponsoredLearn MoreUndoToothsi invisible teeth aligners, now at flat 15k off!Enjoy free Electric toothbrush & Teeth whitening pen worth 5KToothsi by MakeO | SponsoredSponsoredBook NowUndoFlat 15k off on Toothsi invisible teeth aligners!Enjoy free Electric toothbrush & Teeth whitening pen worth 5KToothsi by MakeO | SponsoredSponsoredBook NowUndoAlways Put a Plastic Bottle on Your Tires when Parked, Here's WhyCleverst | SponsoredSponsoredUndoServiced Apartments by Hiranandani Coming Soon to AlibaugFully Furnished Serviced Apartments with Assured Rentals by Hiranandani Communities Now Coming Soon to AlibaugHiranandani Exclusive | SponsoredSponsoredLearn MoreUndoOption Trading: Mr.

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