… well it looks like they must be refunded, pronto:
WASHINGTON (AP) — In a defeat for the Trump administration, a federal judge in New York ruled Wednesday that companies that paid tariffs struck down last month by Supreme Court are due refunds. Judge Richard Eaton of the U.S. Court of International Trade wrote that “all importers of record’’ were “entitled to benefit’’ from the Supreme Court ruling that struck down sweeping double-digit import taxes President Donald Trump imposed last year under the 1977 International Emergency Economic Powers Act (IEEPA). …
Interestingly enough, government systems are being readied (portrayed as ‘impossible’ before):
US preparing system to process refunds on billions in illegal Trump tariffs
Brandon Lord, a top official at US Customs and Border Protection (CBP), said in a filing to the US court of international trade on Friday that the total sum held in relation to such tariffs was estimated to be “approximately $166bn”. The declaration came as government lawyers were meeting with a federal trade judge to hammer out a process for returning the money to about 330,000 importers.
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So, bottom line on those tariffs appears to be, so far -
much anxiety, chaos, and bad will for nothing - other than lots of prime time on TV
revenue collected was already spent on ‘worthy causes’, unclear how refunds will be funded (>2% of federal budget)
importers now set to receive windfall profits on costs that were in fact borne by the consumer (at ca. 95%) - we can look forward to endless squabbles (class action suits…) on who will pocket them in the end
new section 122 tariffs are in effect at 10% - that has not yet caught up with the leader’s overnight mind change to 15%
there are a number of indications that the legal base for the new tariffs (acute “balance of payments problem” from the gold standard era) will not hold either
It must all be very good for the economy though. Might of course pale into insignificance relative to the Middle East adventure fallout.
Sources for Google AI
Urban Institute
New York Times
Forbes
AI Overview
New tariffs are expected to slow economic growth, increase unemployment, and potentially trigger a recession
by raising costs for businesses and consumers. Analysis suggests tariffs could raise the unemployment rate, with one estimate showing a 0.7 percentage point increase by 2026, while others report thousands of jobs lost monthly due to hiring pauses.
[image]Urban Institute +4
Key Impacts of New Tariffs
Unemployment: Tariffs create supply-side shocks that, when combined with uncertainty, cause companies to pause hiring or lay off workers. Industries like transportation and warehousing have already seen significant job losses.
Recession Risk: Increased costs and reduced consumer/investor confidence are raising fears of a recession, with some projections indicating a potential downturn in the second half of the year.
Inflation & Costs: While standard models predict higher inflation from tariffs, recent analysis suggests they might act more as a drag on demand, causing inflation to actually decline alongside rising unemployment.
Economic Impact: Tariffs are acting as a tax on U.S. businesses and consumers, reducing overall economic output and productivity.
[image]The New York Times +9
While some, like Elon Musk, have explicitly warned that these policies will cause a recession, other views suggest the impact may not lead to a full recession, despite hurting specific sectors. However, the general consensus points to significant risks for the labor market.
[image]Forbes +2
My comment, that last remark “significant risks for the labor market” will usher in deflation.
Trade Court Holds the Administration’s Section 122 Tariffs To Be Unlawful
… In interpreting Section 122, a majority of the panel, consisting of Chief Judge Barnett and Judge Kelly, focused its analysis on what Congress meant by “balance-of-payments deficits” in 1974, namely whether the balance-of-payments deficits identified by Proclamation 11012, are “large and serious” as measured by liquidity, official settlements, and the basic balance. The majority held that the Proclamation’s identification of a trade deficit, a current account deficit, and a net negative US international investment position, did not constitute a balance-of-payments deficit under the statute. …
Meanwhile, the refunds for the original tariffs are on their way to the JCs now. Wash, rinse, repeat.