How the US Government Plans to Refund $166 Billion in Tariffs

0:00If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

0:37Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati insurance companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n.com. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

1:21Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. You need to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with Acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat.

2:05Bloomberg Audio Studios. Podcasts. Radio. News. After the Supreme Court struck down some of President Trump's tariffs, there's as much as$166 billion in tariff refunds up for grabs. The web portal only launched last week. On April 20th, the Bureau of Customs and Border Protection began to allow importers to submit refund requests to get money back they paid to the U.S. government when President Trump's IEPA tariffs were in place. But Bloomberg's Laura Curtis, who covers the U.S. economy, says paying back those billions is a huge undertaking. Some of these importers have thousands of entries. Each entry is one shipment, right?

2:47So think about all of the entries that are possible. I think there were 53 million last year that had IEPA duties apply to them. And it's also a challenge for the computer systems that process those refund requests. It is one of the largest government computer systems that is in existence and processes billions of dollars in duty. Cindy Allen runs Trade Force Multiplier, a global trade consultancy service. As well as hundreds of millions of transactions each year for importing and exporting. So there are the logistical hurdles. And then there's another layer of complication for companies that's more political.

3:30So when Trump was asked on CNBC about if he would be offended if companies pursued refunds, the question was posed, companies like Apple and Amazon aren't seeking refunds. There is a worry about, frankly, offending you. Would you find it offensive for them to try to collect a refund? I think it's brilliant if they don't do that. Actually, if they don't do that, they got to know me very well. This whole tariff rollout over the last year has been so chaotic and challenging for the people who are really trying to comply. I think there's a lot of hoping for the best, but preparing for the worst. And this is a case where I think there's some caution.

4:14I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, will$166 billion in tariff refunds actually make its way back to the companies that paid those tariffs and to consumers?

4:31When you put on tariffs, tariffs are the greatest thing ever invented. I took in$467 billion from China. Nobody else took in anything. When Trump was campaigning, he promised to put the highest tariffs ever in place and in order to protect U.S. businesses and kind of spur this manufacturing renaissance. Again, here's Bloomberg's Laura Curtis. Turns out he was quite serious about that. In a few moments, I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world. Reciprocal, that means they do. President Trump said the tariffs were necessary for national security.

5:15These IEPA tariffs were pretty quickly challenged in several different courts. And by February, the Supreme Court ruled they were illegal. And so the result of that is the Court of International Trade has been dealing with the aftermath of trying to figure out how to refund this$166 billion in duties to the U.S. importers who pay them. Who is eligible for these refunds? Who can apply for a refund and who can't? Well, when a company or a person imports something from another country, they have to file forms with Customs and Border Protection as the, it's called importer of record. And so that importer of record can be a wholesaler or it can be, you know, somebody on Etsy.

6:02But it has to be that designation, that importer of record according to customs or the customs broker who filed on their behalf. So I guess with the exception of the mom and pop Etsy seller, we're really talking about companies here versus individuals. Correct. Yes. And that is where this web portal comes in that CBP has created. It's called CAPE, which is short for Consolidated Administration and Processing of Entries. It's the site where you apply for tariff refunds. Can you just describe what this interface looks like, what you have to do to make an application for one of these refunds? Yes, it's a spreadsheet.

6:41Nothing fancier than that. It may not be fancy, but Laura says that portal was up and running quickly. A pleasant surprise to many customs experts like Cindy Allen, the trade consultancy CEO, who also spent years working at the CBP, overseeing its electronic reporting system called ACE. I think the process is working really well. I am shocked and very pleased and really proud of the CBP team and their ability to roll out a major piece of functionality in essentially 45 days. Cindy now advises importers and exporters, brokers and freighters as they navigate complicated customs regulations. And she's seen a broad range of clients across industries dealing with these refunds.

7:27The common element here is every import into the United States with a few carve outs for automotive and some other Section 232 tariffs were subject to IEPA duties. So almost everyone who's paid IEPA duties has an interest in filing for a refund request. So it's small and large companies. Laura, what do we know about what companies or what kinds of companies are applying for these refunds? Is there any way to kind of categorize that? I know, for example, UPS in their earnings call discussed this, and they said they processed 16 million entries that are related to IEPA duties. And as a result of those 16 million entries, remitted over$5 billion to the U.S.

8:16Treasury. So that's what they're telling people that they have coming back. Now, they've also promised to pass those refunds straight back to their customers who paid them. And those people would be more like the consumer level, you know, folks who just order something, you know, one off from abroad. It's also, you know, going to be a complex thing for them to manage. Have any of those shipping companies talked about how well positioned they are to actually get this money back to customers or is it still too early for them to figure that out? No, they have not. They have not provided details on their own version of CAPE.

8:52They've also said that they are going to wait to receive their own refunds from the government. So that's a big caveat. So yeah, we don't know exactly who, you know, which companies have applied yet, but we do know which companies have sued. So these are companies that sued the government to make sure they'd be eligible to apply for refunds like these before this whole online portal was launched. Name a few of those companies. Well, I think the probably most famous one was Costco. And that raised the administration's ire a bit. I think that's part of the reason that people are concerned about, you know, offending the president by applying for refunds.

9:33We also know that FedEx has sued, but also important to know that those suits are on hold while this CAPE process plays out. So actually, in a filing that came out earlier this week, CBP told the trade court that they expect the first refunds to go out actually on May 11th, which is way earlier than anybody expected. So we'll see whether that happens and how significant that first tranche is, but it's a good sign. Customs and Border Patrol provided numbers from the first week its CAPE system was up and running. And CBP says in that week, it had done a first review of 13.3 million import entries.

10:16And of those, about 2 million had been denied so far. Cindy Allen told us those rejections are, for the most part, a product of earlier chaos in the tariff process. So why are those being rejected? It's not because there is an error in the system. It's because the entry information as it was originally transmitted by the customs broker was not in keeping with the requirements that eventually were established. For example, if you had an IEPA duty, as well as a 232 duty, as well as a 301 case, there was no instructions on how to transmit that in what order and how you would show the duty calculation.

11:04So CBP eventually came out with instructions and all of the customs brokers followed that. But what we're finding is a lot of the rejections that are happening are because those initial entries were not transmitted in accordance with instructions that were sent out later. And this confusion is par for the course, Laura says, similar to what businesses and brokers experienced over the last year. The way that these tariffs were rolled out over the last year was incredibly chaotic. Haphazard, even. Yes. I mean, they, in some cases, the official paperwork conflicted with what Trump said. That happened many times.

11:49And then even sometimes the customs guidance would conflict with itself. And so importers really didn't know the best way to categorize things. They didn't know the best way to stack different types of tariffs. Things were changing so fast. Sometimes, for example, they were eligible to pay a lower rate if their goods were already on the water when the tariffs were announced. And in other cases, they weren't. Sometimes that took a long time to hash out. And so what we're seeing, I think now with those kicked back entries is the consequence of that. in a lot of cases. You know, people like brokers that I talked to, they did their best.

12:28But I think people did what they could to get their goods out of port, right? And now they may have to make some adjustments based on updated guidance. Before this refund portal was announced, the judge who's overseeing the refund process expressed concern in court about importers having to request refunds. Why the judge wondered, wouldn't the government just send the refunds automatically based on existing data? Is there a way that this could have been done more simply? What have experts told you just about the way that this process has been designed and how it's unfolding? CBP has all the data, right?

13:01They collected the money. The argument is they could easily have just sent it back to the person who paid it. Another big surprise for people is that between this year and last year when these tariffs started is CBP is no longer issuing paper checks. Now it's all direct deposit, which requires a whole nother enrollment process within CBP software. It's also so much money. I mean, can you imagine sending checks willy nilly or direct deposits like without verifying where they're going or people move? I think there are a lot of reasons that it doesn't make sense for CBP to have just issued the refunds as paid.

13:41They're also doing a fair amount of verification that the duties paid at the time are correct. Right. This is an opportunity they have to make sure that they are not refunding money that is legitimately owed to them, even though these tariffs are illegal. It seems like it's a headache for a lot of companies to have to go through all of this. Have you heard that from smaller companies, smaller importers, just about the work that they have to put in to try to get this money back? Yeah, it's a big headache. The whole thing has been a big headache, though. I think the refund process is one that they're kind of happy to endure, you know, compared to the headache of the last year.

14:19A lot of the smaller guys will have to deal with more with FedEx and DHL anyway, because they do handle a lot of imports for smaller businesses. But yeah, it's definitely been an administrative burden. But I think, you know, the idea of getting the money back is a nice carrot. Coming up, how politics is influencing which companies apply for refunds and what tens of billions of dollars in potential refunds mean for President Trump.

14:52For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare. Everyone has been there. Your team's feedback is scattered across emails, chats, and sticky notes.

15:29It's a mess. But PDF Spaces and Adobe Acrobat gives you one collaborative workspace to streamline every file and comment. So, if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page? Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. Some follow the noise. Bloomberg follows the money. Because behind every headline is a bottom line. Whether it's the funds fueling AI or crypto's trillion-dollar swings, there's a money side to every story.

16:16And when you see the money side, you understand what others miss. Get the money side of the story. Subscribe now at Bloomberg.com.

16:33There have been many moments when the president has talked about the benefits of the U.S. government taking in all of this money. He's talked about what he would spend it on, what it might free up. Broadly speaking, what plans did the government have for the money that they brought in through these AIPA tariffs? Well, at first it was all about the revenue, right? I mean, we had these projections that showed a big dent in the deficit as a result of the tariffs. That conversation has waned a little bit. I think, for example, the expense of the tax overhaul that passed over the summer, the Iran war now.

17:09You know, tariffs aren't really going to put as much of a dent in those things. Also, because people are having a hard time with cost of living and maybe not wanting to be reminded of this money that's being taken in at the border. But I think what I'm hearing more now is a discussion around tariffs benefit as leverage in trade talks with other trading partners more than the revenue that they bring in. And perhaps a stupid question, but it's not like this money came in and then sat in escrow. It's not like there was a pot of money just sitting there that now the government can pull money out of and send back to companies and perhaps individuals.

17:48Well, it's not an escrow, but it is in the Treasury's general account. So it's I mean, it's basically the checking account of the United States. Yeah. Do you expect that the full 160 billion is going to be refunded? Is there any uncertainty surrounding that? Oh, there's a lot of uncertainty around how much will actually be refunded of that. Some of the ways that shipping contracts were set up had the importer of record as a like a Chinese freight forwarder, for example. And that's going to get really hairy because those companies may or may not have paid the full duty on the full value of the goods.

18:26And so, you know, for importers who went that route, I think they may not want to open that can of worms. Laura, what about those remarks from President Trump suggesting he would look kindly on companies who choose not to file for tariff refunds? Importers I've been talking to, some are concerned that if they file for the refunds that they're owed, Trump will find out and and he'll target them as a result. I think, you know, for the most part, people are filing because they have a duty to their shareholders or, you know, have planned to go after those refunds. But yeah, it is quite chilling. I think it's something that will be interesting to watch.

19:07Laura pointed out that if companies have filed lawsuits seeking tariff refunds, that would be public information. But Cindy Allen says applications for tariff refunds are confidential. Whether the administration is seeking that information from CBP, we don't know. But generally, the only way that anyone knows refunds have been filed is to either self-disclose that or for that information to come from CBP. Large companies are really sensitive to the fact that the administration has made some concerning statements about following the companies that are filing for a refund and treating them favorably or unfavorably if they have.

19:52And that's a huge concern for larger corporations. They want to manage both their brand risk as well as their company financial risk. Laura, after the Supreme Court struck down these tariffs, it was actually a different court, the Court of International Trade, that found the government had to proceed with these refunds. The Trump administration, as I understand it, can appeal that decision. But somewhat surprisingly, at least to me, it hasn't done that. Why is that the case? Well, I do not know why they have not appealed it. You know, I've talked to folks who think maybe that would be not a very politically advantageous thing to do at this moment in time.

20:27And I've talked to plenty of people who are pretty convinced that he still has time to appeal it and will. And that, gosh, that'll be interesting if some of the refunds have already gone out. It gets to a question I have just about the psychology of these companies vis-a-vis tariffs at this moment. How much are companies, in light of what they've been through here with tariffs put on and taken off, increased and reduced, Just now watching this refund process unfold, maybe wondering if the government is going to appeal, if new tariffs are going to replace old ones. How are companies dealing with kind of broader ambiguity surrounding, yes, the tariffs policy, but also now this new ambiguity around the refund policy?

21:09Well, I think companies are, they're just trying to be business as usual as much as they can. And I think uncertainty has become a little bit more usual in the last year. The current set of tariffs under Section 122 is a 10 % levy across the board, and it expires in July. So I should say Section 122 is the sort of stopgap to replace IEBA. There are other tariffs that remain in place and have not been disrupted. But the administration has pledged to find alternate ways of raising this revenue. I think companies are just moving forward under the assumption that tariffs are here to stay.

22:43Thank you. Visit bloomberglive.com forward slash invest Hong Kong to learn more. Supporting sponsor Deutsche Bank.