Massive tariff refunds difficult to benefit American consumers

The US federal government has been imposing large-scale tariffs since the first half of last year, pushing up inflationary pressures and causing widespread impact on American businesses and consumers. After the US Supreme Court ruled earlier this year that the relevant tariffs were illegal, the federal government initiated refunds, and has completed the refund of approximately $100 billion in tariffs so far. However, most of these refunds flow into import companies or related third-party organizations, and consumers who actually bear most of the tariff costs find it difficult to benefit from them.

According to the rulings of the US Supreme Court and the US International Trade Court earlier this year, the US Customs and Border Protection initiated the refund process for tariffs previously collected under the US International Emergency Economic Powers Act on April 20th, with the first batch of refunds issued around May 11th.

According to information disclosed by officials from the US Customs and Border Protection on the 4th of this month, as of the end of July, the department has completed the refund process for approximately $100 billion in tariffs and provided relevant information to the Treasury Department for payment.

Apple has announced that it has received $2.2 billion in tariff refunds. Apple CEO Tim Cook said the company will use the funds for reinvestment. PepsiCo Chief Financial Officer Steve Schmidt recently stated that the tariff refund is expected to contribute about 1 percentage point to this year's earnings per share growth, helping to partially offset the pressure of rising commodity costs. Wal Mart previously said that it would use the expected $2.4 billion refund to reduce the price of its products. Another chain giant, Kaike Company, has also made a similar statement. However, analysts believe that consumers find it difficult to obtain refunds directly from these companies.

E-commerce giant Amazon recently announced that it has received a refund of $600 million and has absorbed most of the tariff costs. For the few cases where customers bear the cost of tariffs, Amazon plans to proactively contact the relevant customers and automatically refund the corresponding amount. Both FedEx and United Parcel Service have promised to refund customs duties received by customers, but from the results, consumers feel more disappointment and anger.

Amazon, Sony, and the "Five Dollar" chain are all facing class action lawsuits initiated by customers, demanding refunds of the tariffs they have received.

In the face of a class action lawsuit from customers, Nintendo USA recently stated that the company will not refund the tariffs received to consumers, and the price paid by consumers represents the price they want and receive the product.

A study released by the Congressional Budget Office in February showed that about 70% of the costs generated by the tariffs imposed by the United States are ultimately transferred to consumers through price increases, with businesses bearing about 30%.

According to previous calculations by the Yale University Budget Lab, the US government's tariff policies result in an annual cost of approximately $2400 for each American household. Even if the US Supreme Court makes a ruling against the federal government in February, the additional tariff cost per household per year is still about $1100.

The problem is that in legal terms, the vast majority of import tariffs are directly paid by importers, and the cost borne by consumers is mainly reflected in the price increase of goods. This creates a "misalignment" between the government's designated refund recipients and the actual cost bearers. Although some Democrats advocate returning tariffs to end consumers, the federal government does not have a basis for directly refunding consumers.

US Treasury Secretary Besson said that tariff refunds will ultimately become a 'benefit for businesses'.

Mark Poken, a Democratic congressman from Wisconsin, said on social media on the 3rd that Wal Mart, Apple, Ford, Amazon and other companies have received hundreds of millions to billions of dollars in tariff refunds, while ordinary consumers have received nothing. This is just a transfer of wealth from ordinary Americans to large corporations, "he said.