A federal trade court declared the New Administration’s 10% global tariffs unlawful, delivering a fresh blow to the administration’s economic agenda. This is just months after the U.S. Supreme Court vacated earlier levies.
A divided three-judge panel at the U. S. Court of International Trade in Manhattan granted a request from a group of small businesses and two dozen states to invalidate the tariffs. The Administration imposed the duties in February under Section 122 of the Trade Act of 1974, which had never previously been invoked.
For now, the court only blocked the administration from enforcing the tariffs against the two suing companies and Washington State. The ruling was clear that the court was not issuing a so-called “universal injunction.” It also said that the other states lacked standing because they weren’t direct importers.
It wasn’t immediately clear what the ruling would mean for other importers that have paid the contested levies. U.S. Customs Authorities collected roughly $8 billion in Section 122 tariffs in March alone, according to government data analyzed by We Pay the Tariffs, a coalition of small businesses.
This decision is the latest setback for the administration’s effort to levy tariffs without congressional input. Earlier duties overturned by the Supreme Court, were issued under a different law. In that case, the justices ruled that the President had exceeded his authority, initiating a $170B legal scramble by importers for refunds.
The New Administration is already working on its next tariff plan, but those levies are months away from implementation. In the meantime, the White House was counting on the Section 122 tariffs to bridge the gap until July, when some of the trade probes conclude.
The clash over Section 122 emerged just as the legal fight over refunds from the administration’s IEEPA tariffs began to heat up. A different judge in the Court of International Trade is overseeing the massive refund effort and ordered Customs and Border Protection to give him regular updates on a largely automated process the government will use to issue the refunds.
The U.S. Customs agency launched a refund portal in late April and an initial round of payments began hitting importers’ bank accounts this week. Questions remain about the scope of the refund claims process and whether consumers will have any recourse against businesses they contend raised prices to cover the costs of the higher levies.
If you’re waiting on a check, I wouldn’t hold my breathe.
Let me leave you with this…
I absolutely love meeting my readers.
I had the chance to spend St. Patrick’s Day this year in my wife’s hometown of Kendlaville Indiana. Six people I didn’t know came up to me, introduced themselves, and told me that they’d read every word I’d written for the past three or four years.
They were all friends of my wife who read my Facebook posts. In my usual fashion, given the smart aleck I was born to be, I questioned their sanity for having such poor taste in reading materials.
Only 210 people attended this event and six strangers thanked me for writing. I was in heaven. It was lovely to meet them.
My column has turned into quite a thing. I began writing at the start of the Covid-19 shutdown. There was simply too much information to convey through my normal communication channels, so I began writing.
A minimum of 11,500 people now read these emails. It’s no mystery why I devote the time to do this.
First, by doing so, my clients are the best informed entrepreneurs regarding their accounting and taxes. A better educated client makes our jobs easier.
Second, my practice has increased in size by 250% in the past five years.
If you get my column from an indirect source like Facebook, Google, Linkedin, or any of the other social media platforms where we post, do me a favor. Send me your email so I can include you on our regular Constant Contact list. At that point, you won’t miss any of them.
And if you regularly forward my communications to friends or family, just send me their emails. I’ll be happy to include them as well.
Also, if you happen to run into me on my travels, don’t hesitate to introduce yourself.
Whether you’re a client or not, I’d love to meet you.
As always, if you’re having problems with your accounting or tax work, I’m waiting for you to contact me.
We’re all going to get through this. Let’s get through it together…
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Sincerely yours,
Chris Amundson
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