President Trump’s aggressive trade policies last year destabilized many American companies. His new push to replace the system with a different set of obligations has once again confused companies.
After the Supreme Court invalidated many of Mr. Trump’s tariffs last month, his administration has vowed to use other legal remedies to rebuild the program. Almost immediately, Mr. Trump used an unproven legal provision to impose a blanket 10 percent tariff on U.S. trading partners and threatened to increase the rate.
The haphazard rollout has created a tangle of unknowns for businesses. A new tariff system could upend months of business decisions, and many companies are bracing for continued uncertainty.
They are also considering whether and how they can request a refund for the tariffs they paid – and, if they receive one, whether they would refund customers.
Peter Furth, whose company FFF Associates in Stamford, Connecticut, imports fig paste from Turkey and Spain, said Mr. Trump’s tariffs had driven up costs and destroyed his cash flow. Mr. Furth has passed on the additional costs to his customers, which include Mondelez, the maker of Fig Newtons; Nature’s Bakery; and J&J Snack Foods. He said he believes he has a contractual and moral obligation to return any duty refunds to customers.
“I owe it to them,” he said. “It’s very simple.”
Smaller companies like his are particularly unburdened by the recent changes in trade policy because, as with last year’s tariff chaos, they lack the legal and financial resources to smoothly weather the unpredictability.
“The level of uncertainty is crazy,” said Matt Weyandt, co-founder of Xocolatl Chocolate, an artisan chocolate maker in Atlanta.
Mr. Weyandt, whose company sources cocoa beans from countries including Peru, Nicaragua and Tanzania, is trying to determine whether exemptions for foreign agricultural products previously issued by the Trump administration are still valid — without success, he said. He said he was intrigued by the prospect of a duty refund, but had no idea how to go about it.
“We just don’t have legal teams to handle these things for us,” he said. “We’re going to give up everything we’re doing to spend so much time sorting it out.”
Richard A. Mojica, an attorney at Miller & Chevalier Chartered in Washington, said he was fielding a flood of questions from clients about what the tariffs would be and the possibility of a refund of taxes already paid. He said it felt similar to the period after “Liberation Day” in April, when Mr. Trump announced sweeping tariffs that unleashed a flood of uncertainty.
Mr. Trump ordered blanket tariffs of 10 percent in February, relying on Section 122 of the Trade Act of 1974, which allows the government to impose tariffs of up to 15 percent for 150 days without congressional approval. A day later, Mr. Trump said on social media that he would increase the tariff from 10 percent to 15 percent. However, the change never materialized, and the White House said it was not clear when it would occur.
Mr. Trump has a variety of other customs authorities at his disposal. The government has signaled that it will impose new tariffs based on Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974.
Enforcing those tariffs would take months as the administration completes investigations and hearings required by the law. Companies will likely try to influence the process because if these tariffs were enacted, they would be less vulnerable to legal challenges.
Mr. Mojica said he expected some customers to speed up their deliveries because they fear tariffs could rise further once the government figures out how to replace them.
“I think we will see a short-term increase in imports within that 150-day window because the rates will be comparatively lower than before and because they don’t know what the rates will be after the fact,” he said. If the 10 percent rate were to rise to 25 or 50 percent, 10 percent would be “comparatively speaking, a fairly manageable rate.”
Braxten Wilding, vice president of finance at Wilding Wallbeds, a maker of wall beds in St. George, Utah, said his company rushed to build inventory last year in response to the tariffs, tying up money that would otherwise have gone toward new machinery and buildings.
He welcomed the possibility that the new tariffs would include a lower rate for China, where the company sources metal components and mechanisms, and supported tariffs in general. But the lack of clarity had put the company on pause.
“We’re in a bit of a wait-and-see mode,” he said, adding: “We still feel like we have to be on our guard.”
Refunds are another open question. The federal government has collected more than $100 billion in revenue from tariffs that the Supreme Court struck down, and the Trump administration indicated last year that it would pay back if tariffs imposed under the International Emergency Economic Powers Act were deemed unlawful.
After the Supreme Court ruling, Finance Minister Scott Bessent said refund payments could take months and would be decided by lower courts.
“It’s not the administration’s fault,” Mr. Bessent said.
The administration attempted to slow the refund process late last week, arguing that it needed more time to determine the path forward.
Decisions about whether and how the government would refund tariff revenue could lead to contractual disputes between companies that paid tariffs and their customers, who may have those tariff costs passed on to them. Companies including FedEx, Dyson and L’Oreal have filed lawsuits since the Supreme Court ruling.
Small and medium-sized U.S. importers may not understand the procedural requirements for securing refunds, said Matthew Seligman, a fellow at the Stanford Constitutional Law Center whose law firm specializes in customs refunds.
“Most people thought they would get their money back automatically, something like a tax refund, and it definitely doesn’t work that way,” he said.
He said he believes that once the tariff assessment is final, companies will have no more than 180 days to challenge U.S. Customs and Border Protection. If the challenge is rejected, “every individual importer would have to file a lawsuit,” he said. He advises his clients to both petition the customs authority and file cases with the International Trade Court to speed up the process.
Jeremy DeFilippis, chief executive of Jetty, a clothing company in Manahawkin, New Jersey, said any refund would be a financial blessing.
Jetty buys board shorts, shirts and other apparel from suppliers in China, India, Vietnam and Guatemala, and Mr. DeFilippis estimates the company paid $250,000 to $300,000 in additional tariffs last year.
To reduce the additional tariff burden on imports from China, Jetty shifted some production to Vietnam last April, which DeFilippis said resulted in lower quality and delayed shipments. The company decided not to increase prices for residential customers, which resulted in a loss in its profit margin.
If he got a duty refund, he said, he would use the money to shore up his company’s finances. “It would really help with operational costs and labor in the short term,” he said. “It’s not like we hand out vouchers to customers.”
But he also said he hadn’t tried to get a refund and didn’t know how long the process would take. “It’s just a complete mess,” he said.