| ▲ | xnx 8 hours ago |
| Am I understanding this right? 1) US customer pays huge import tax on imported goods in the form of higher prices. 2) Seller sends the collected tax to the US government 3) US government will refund all/most of that tax back to the seller after this ruling 4) Seller gets to keep the returned tax money as pure profit (no refund to customer) |
|
| ▲ | beloch 33 minutes ago | parent | next [-] |
| This will be so in some cases, but there are extra steps in others. e.g. In a different path, 1 and 2 are the same, but things then diverge. 3) To recoup some of those tariff costs, the company sells the rights to any potential future tariff refunds. They recoup a portion of what they paid immediately but hand away the right to a full refund to another party, such as Cantor Fitzgerald. The seller might use this to reduce prices for their customers, but probably won't. They'll set prices according to what the market will support. 4) US government will refund all/most of that tax back to companies, like Cantor Fitzgerald, that bought the rights to tariff refunds. 5) Seller doesn't get any extra money back, so there's no money to refund to consumers. IMPORTANT NOTE: Cantor Fitzgerald, while just one of the companies doing this, was formerly headed by Howard Lutnick and is currently owned and operated by his sons. |
|
| ▲ | sc68cal 8 hours ago | parent | prev | next [-] |
| The importer pays the tax and passes it on as higher prices to the consumer. So the importers are the one that had the tax collected from them and would be getting the refund. The importer CAN be the seller, but other times the importer is a middleman in the supply chain. |
| |
| ▲ | sowbug 8 hours ago | parent | next [-] | | To the CPAs among us: will the refunded import taxes be treated as extra profit for all the importers who paid them? I could see an argument that they don't have a legal obligation to pass the refunds on to their customers, any more than my local grocery store owes me 5 cents for the gallon of milk I bought last year if the store discovers that their wholesaler had been mistakenly overcharging them. | | |
| ▲ | mattas 6 hours ago | parent | next [-] | | The idea of getting a refund for mischaracterized tariffs is actually fairly common (it's called a duty drawback and there's a cottage industry around this). It's generally used when an importer incorrectly categorized their import under an HS code that has a higher duty than the correctly categorized HS code. The difference this time is the scale is orders of magnitude larger. Will be interesting to see how they (importers and CBP) work through this. | | |
| ▲ | Animats 9 minutes ago | parent | next [-] | | A regular importer who routinely pays customs duties is now owed money by Customs and Border Protection. Can they now set off future duties against the balance owed them? Normally, reciprocal debt cancellation is legal. The U.S. Treasury has a whole system for this, but in the other direction. If the government owes you money, and you owe the government money, the Treasury will deduct what you owe from whatever they are paying out.[1] But they're not set up for that in the other direction. [1] https://www.fiscal.treasury.gov/TOP/ | |
| ▲ | Forgeties79 2 hours ago | parent | prev | next [-] | | Smart money is that they will make some token comment about "leave it up to the states" or lower courts and then do absolutely nothing about it | | |
| ▲ | aardvarkr 2 hours ago | parent [-] | | The feds are the ones that control import duties, not the states. The courts will decide two years from now what to do. |
| |
| ▲ | jopsen 2 hours ago | parent | prev [-] | | > The difference this time is the scale is orders of magnitude larger. The administration will just do nothing. They need 3 maneuvers for this to drag out longer than Trump 2. There is no intention to follow the law here. |
| |
| ▲ | tim333 an hour ago | parent | prev | next [-] | | I think the tax is basically on the profit made when you add up costs and expenses. Say: Before: Importer pays China $10 for widget, pays $2 duty, sells to shop for $12 - profit zero, tax on that zero. Now: Paid $10 for widget. Paid $2 duty, sold for $12, $2 refunded - profit $2, pays tax on the $2. At least that's the normal way of doing accounting. There can be odd exceptions and complications in local laws. | | |
| ▲ | sowbug an hour ago | parent [-] | | Yes, I think that's the starting point. Another part of my question was whether a CPA applying GAAP would recommend recognizing the $2 as other income, or else as a liability against a future claim from the customer who bought the widget and is now seeking a partial refund. I did what passes for research these days and concluded that if the claim is "probable and estimable," then it could be recorded as a "contingent liability" rather than other income. Relevant facts would include whether the tariff refund included a pass-through refund mandate (unlikely with this administration), or whether class actions for refunds against merchants were pending (inevitable). | | |
| ▲ | tim333 an hour ago | parent [-] | | I imagine the government will provide some sort of guidance for that kind of stuff? |
|
| |
| ▲ | onlyrealcuzzo 5 hours ago | parent | prev | next [-] | | I got charged a $600 tariff from UPS to ship a $30 25-pound sandbag into the US from Canada. UPS didn't even deliver the product. I'm suing them in small claims. We'll see what happens. I imagine that even after the ruling, our ass backwards legal system will somehow say this makes sense, even though the tariff rate was never near high enough for that bill to make any sense. Further, they're going to get refunded the $10 it MIGHT have cost them. | | |
| ▲ | 2 hours ago | parent | next [-] | | [deleted] | |
| ▲ | aardvarkr 2 hours ago | parent | prev [-] | | Huh? In what world was the tariff on sand 2000%? | | |
| ▲ | jacobgkau 2 hours ago | parent [-] | | It wasn't the tariff. UPS has been tacking on a ridiculously high paperwork fee for the service of processing tariff payments. Other shipping companies have also had fees, but UPS is the main one that's made it exorbitant and disproportionately higher than the tariff itself. |
|
| |
| ▲ | sc68cal 7 hours ago | parent | prev | next [-] | | That's a great question. I would also love to know that answer. I agree with you that they're not going to share the refund if the importer was the middleman in the supply chain, and same thing if the importer was also the seller. | | | |
| ▲ | nullhole 2 hours ago | parent | prev [-] | | Related question, unanswerable except maybe as a rough estimate: how much will it cost, in accountant/bookkeeper time, to do all the administrivia required to process all these refunds? |
| |
| ▲ | aucisson_masque 2 hours ago | parent | prev [-] | | at the end of the day, it's average joe who bought his things more expensive, and he won't get back his money. That's what matters, don't care if it's the seller or a middleman that gets this money. That's really a shame for american citizens, i'd be furious if i was american. | | |
| ▲ | blurbleblurble 2 hours ago | parent | next [-] | | Many are beyond furious | | |
| ▲ | ikiris 2 hours ago | parent [-] | | Many voted for this | | |
| ▲ | cptroot 2 hours ago | parent | next [-] | | Very few people voted for tariffs, specifically. They voted for a promise of a return to a world where they were on top. | |
| ▲ | aucisson_masque 2 hours ago | parent | prev [-] | | These people are not necessary against tariff, they are against paying more for their stuff and having it benefit some middleman because the current government messed up badly. I can otherwise understand how people would agree on paying more for their stuff if it allows their fellow citizens to have a job. | | |
| ▲ | jacobgkau an hour ago | parent [-] | | Yeah, I honestly have not been one of those "it's just a negotiating tactic" people and have instead been saying this whole time that I understand why tariffs (and the end of de minimis) are needed at the moment. Seeing Temu ads all over TV and the internet flouting word-for-word that I can "shop like a millionaire" to buy their cheap, disposable, polluting, unethically-produced junk, while I'm not making enough to actually live comfortably (with many worse off than me), comes across as a real and obvious problem to me that needs to be nipped in the bud despite whatever short-term dollars I might save by buying Temu knock-offs on a regular basis. (And I do import personal purchases from overseas a few times a year, and have put my money where my mouth is when it comes to paying tariffs on those.) I obviously am not particularly happy about the tariffs being struck down like a lot of people are. And having paid those tariffs thinking they were at least legitimate tariffs, I'm also not super happy that I won't be seeing that money come back to me (neither in the form of services paid for by taxes, nor in the form of a refund). It's a crappy situation all around. I won't sit here and claim the Supreme Court got it wrong, but it does make me wish the administration had worked more carefully to do it in a legal way the first time, for example, or that Congress had been involved to achieve it since the administration's party controlled them this whole time, anyway. | | |
| ▲ | Recurecur an hour ago | parent [-] | | Don’t panic too much yet, there are other legal bases for the tariffs. We’ll see… |
|
|
|
| |
| ▲ | cyanydeez 2 hours ago | parent | prev | next [-] | | So they basically figured out how to bribe all these companies? Such a kleptocracy. | |
| ▲ | PowerElectronix 2 hours ago | parent | prev [-] | | i read that Costco could actually refund everyone, as they can know exactly who bought what. If they do, that's another matter, but they definitely can. |
|
|
|
| ▲ | sowbug 8 hours ago | parent | prev | next [-] |
| Or maybe this is used to justify a new emergency federal law that all purchases must be reported on your tax return, just in case the government ever needs to refund any illegally collected import taxes. I think I'm kidding, but I'm not really sure anymore. |
| |
| ▲ | seanmcdirmid 2 hours ago | parent [-] | | A federal law has to be approved by Congress, that isn’t happening. An executive order maybe? |
|
|
| ▲ | not_a_bot_4sho 8 hours ago | parent | prev | next [-] |
| There have been no decisions about refunds. The court avoided addressing that. That topic will surely go back to the courts, kicking and screaming |
|
| ▲ | webXL 2 hours ago | parent | prev | next [-] |
| In October, I bought a $250 product from a Canadian company + about $30 shipping & taxes and thought I was good. A few weeks later, FedEx sends me an $92 bill for the duty that they had to pay. I just ignored it since I was never given that notice up front. If they really wanted it, they could have had the vendor contact me. But at least they're not getting that bit of profit now. |
| |
| ▲ | bakies 2 hours ago | parent | next [-] | | I'm also ignoring a bill, from UPS, that is a few bucks of duty and a much larger $14 fee. Presumably the large fee is because UPS isn't meant to collect taxes, but they can suck it. | |
| ▲ | testing22321 33 minutes ago | parent | prev [-] | | For what it’s worth, FedEx paid the tariff on your behalf . You owe them, and I wouldn’t be surprised if they withhold future packages to your address until you settle up. |
|
|
| ▲ | jleyank 8 hours ago | parent | prev | next [-] |
| Seller wasn’t involved in the tariffs. Rather the importer paid them, etc. |
| |
| ▲ | magicalhippo 3 hours ago | parent | next [-] | | > Seller wasn’t involved in the tariffs. Rather the importer paid them Strictly speaking it depends on the Incoterms agreed upon by the seller and buyer[1]. If the Incoterms are DDP, then the seller should pay import duties and taxes and as such is involved. Of course sellers are typically trying to run a business, so they'll bake the taxes and import duties into the sales price. So effectively the buyer ends up paying for it, just indirectly. This was relevant when the tariffs were introduced, as sellers with DDP goods in transit had committed to a sales price which included any tariffs and would have to swallow the extra costs when they got the bill from the freight forwarder. [1]: https://en.wikipedia.org/wiki/Incoterms#Allocations_of_risks... | |
| ▲ | xnx 7 hours ago | parent | prev | next [-] | | Who pays the importer? | | |
| ▲ | jleyank 5 hours ago | parent [-] | | Seller doing the importing, so they pay the foreign entity for their goods and sends the appropriate cut to the US Government. At that point, they either eat the additional cost of business or make their customers do so. Or something in between. Tariffs are like a national sales tax. |
| |
| ▲ | croes 6 hours ago | parent | prev [-] | | I guess by seller parent means the US company who sold the product to the US customer not the seller who sold it to that company. |
|
|
| ▲ | rtkwe 5 hours ago | parent | prev | next [-] |
| Sometimes the consumer (more) directly pays when buying from overseas, most of the time you're right it gets rolled into the price at checkout if the company is large enough or just in larger prices buying in the US. I've had a few packages I had to pay extra import duties on with the UPS/FedEx agent fees tacked on top mostly kickstarters. |
| |
| ▲ | xnx 4 hours ago | parent [-] | | Understandable. With the intentional chaos since last year, tariffs were changing mid-shipment without any prior notice. | | |
| ▲ | rtkwe 4 hours ago | parent [-] | | It's less that and more that the sender just didn't arrange to prepay it for the receiver rather than it being in flux. A lot of shippers do handle it to avoid the surprise for customers but some didn't have the setup to do the prepayment. |
|
|
|
| ▲ | jrmg 6 hours ago | parent | prev | next [-] |
| Can I get compensation from UPS or FedEx for making me pay illegal tariffs - and making me pay a fee to them for processing it too? (I know the answer is practically ’no’, but it does still seem to me that the bureaucracy and companies that went along with this obviously illegal operation bear some culpability...) |
| |
| ▲ | fn-mote 2 hours ago | parent | next [-] | | > Can I get compensation from UPS or FedEx for making me pay illegal tariffs - and making me pay a fee to them for processing it too? I can see why you are mad, but it seems like the were fulfilling their legal obligation (at the time). The good news is that having directly paid UPS and not a middleman makes it much more likely that you will receive the money back. If anybody does. | |
| ▲ | xnx 6 hours ago | parent | prev | next [-] | | That's be nice, but I place more blame on the half of Congress that was OK with this. | |
| ▲ | teeray 6 hours ago | parent | prev [-] | | If everyone sued them in small claims over it, there probably would be a whole lot of default judgments. | | |
|
|
| ▲ | dgellow 2 hours ago | parent | prev | next [-] |
| Or the government will not refund, and add more illegal tariffs. That wouldn’t be surprising, unfortunately |
|
| ▲ | 8 hours ago | parent | prev | next [-] |
| [deleted] |
|
| ▲ | apexalpha 8 hours ago | parent | prev | next [-] |
| There are usually a few companies between the importer and the consumer. So the importers could only refund the business they sold it to and likely won't if nothing was specified in the purchase contract. Though this is obviously a first so expect a billion lawsuits about this. |
|
| ▲ | pclmulqdq 2 hours ago | parent | prev | next [-] |
| When I have bought things internationally, I have always been the one doing the importing. This means I paid some Trump taxes and I will get my money back. |
| |
|
| ▲ | SmirkingRevenge an hour ago | parent | prev | next [-] |
| I think people are getting ahead of themselves on the refund business. Refunds might be on the table, they also may not be. It may be a years long battle. Trump and co might put up enough resistance that many firms find it too costly to fight. |
|
| ▲ | vkou 2 hours ago | parent | prev | next [-] |
| > Seller gets to keep the returned tax money as pure profit (no refund to customer) Elections have consequences. |
|
| ▲ | lokar 8 hours ago | parent | prev | next [-] |
| Most of the total tax collected seems to have been absorbed by the importers, lowering margins. |
| |
| ▲ | xnx 7 hours ago | parent | next [-] | | Where did you hear that? It is conclusively the opposite: https://www.cbsnews.com/news/trump-tariffs-consumers-busines... | |
| ▲ | dawnerd 7 hours ago | parent | prev [-] | | The price of googs this last year bed to differ. Maybe for some bigger companies on certain products but what stores like Walmart did was spread the price increase across all products so it wasn’t as obvious. And that’s now where it’s going to suck the most, prices are not going to come down. Ends up being a free handout to them. |
|
|
| ▲ | furyofantares 7 hours ago | parent | prev [-] |
| Why do we repeatedly say that tarrifs are passed off in full to the consumer in the form of higher prices? Isn't that as obviously wrong as the argument for them, that they're paid entirely by the other countries? Is there a reason to believe, or evidence, that it's not a mixture of the two? edit: I want to highlight esseph's reply has a link to evidence that last year's tarrifs were passed off 90% to consumers, which is exactly the type of info I was looking for. |
| |
| ▲ | sdenton4 5 hours ago | parent | next [-] | | Here's evidence : https://www.kielinstitut.de/publications/news/americas-own-g... "Importers and consumers in the US bear 96 percent of the tariff burden." | |
| ▲ | layer8 7 hours ago | parent | prev | next [-] | | For goods for which no domestic equivalent alternatives exist, why would the foreign suppliers lower their prices to compensate for the tariffs (which are paid by the importers to the government)? More generally, the cost of the tariffs will be split between foreign suppliers and local importers/consumers according to the competitiveness and availability of domestic suppliers, and according to market elasticity for the respective goods. | | |
| ▲ | cortesoft 2 hours ago | parent [-] | | Well, they would likely have to lower their profit margin because the demand is reduced by the higher prices. Fewer purchasers will want to/be able to buy the item at the higher price. The supply and demand curve will find a new equilibrium, but it isn’t like the sellers are going to sell the exact same quantity of items with the price exactly increased by the tariff amount. | | |
| ▲ | wolrah an hour ago | parent [-] | | That assumes that demand is meaningfully elastic, that suppliers have room in their margins to absorb it, and that they're willing to. That is obviously not the case for a lot of things. Products with inelastic or less elastic demand we can skip over because it's pretty self explanatory. Products like the random cheap widgets a lot of us would buy from random Chinese sellers are often high volume low margin products with a lot of competition. Think about stuff like a USB->TTL serial board that's basically two connectors, one cloned chip, and a few supporting components on a single layer PCB. Hypothetically this is an ideal case for free market economics and these things should have already been basically as cheap as they can be at every step in the chain. For less competitive items, particularly lower volume specialty items, a vendor may also decide that it's just not worth sacrificing profits in other markets by letting them know there's room to come down. A lot of the independent hardware designers I've been wanting to buy things from sell out every batch one way or another so they just don't care, demand exceeds supply even if demand from the US is reduced. Others have decided the volatility of the situation just isn't worth it with the risk of products getting delayed or additional charges added resulting in chargebacks and lost products and have simply stopped selling to the US altogether. |
|
| |
| ▲ | NoLinkToMe 7 hours ago | parent | prev | next [-] | | It is a mixture of the two. But my reading of various studies indicates that in this mixture, the majority was passed to consumers in the form of higher prices. | |
| ▲ | JDEW 7 hours ago | parent | prev | next [-] | | > by the other countries That makes zero sense. You mean “by lowering the profit margin on the goods sold to the US by that specific company”. Countries don’t pay tarrifs (bar state intervention), companies do. But yes, it’s probably a mix of the two: raising prices and lowering profit margins. | |
| ▲ | esseph 7 hours ago | parent | prev | next [-] | | "American consumers bore 90% of last year's nearly six-fold tariff increase, adding $1,000-$2,400 to average household budgets, despite overall inflation dropping to 2.4% in January 2026." https://www.forbes.com/sites/petercohan/2026/02/15/consumers... | | | |
| ▲ | tombert 7 hours ago | parent | prev | next [-] | | What an odd thing to say. The businesses in the other countries are, you know, businesses. Even if it were Chinese companies that were paying the tariffs, that will be baked into the cost of the good. This is literally first-day economics. No such thing as a free lunch. The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user. I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started. If there are suspicions that the tariffs are temporary then they might be willing to eat the cost temporarily so it’s not passed onto the consumer immediately, but that’s inherently temporary and not sustainable especially if it would make it so these companies are losing money. | | |
| ▲ | RupertSalt 6 hours ago | parent | next [-] | | https://en.wikipedia.org/wiki/Tariff A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and is paid by the exporter.
If an analysis says that "domestic consumers are paying 90%" of a tariff then they are simplifying the process that others are describing here as "baked into the cost" and I would say, more accurately, "the cost of tariffs are recouped from consumers/businesses by those who paid them (the importer)" The economic burden of tariffs falls on the importer, the exporter, and the consumer. [Wikipedia]
If economists are saying "consumers pay tariffs" then I would expect to see a notation on the price tags and a line-item on my receipts, but the cost of the tariff must be paid by the importer, or there won't be a consumer who can purchase the goods, let alone bear the costs of their tariffs. | | |
| ▲ | whattheheckheck an hour ago | parent | next [-] | | The importer is the consumer... | |
| ▲ | tombert 5 hours ago | parent | prev | next [-] | | I am just saying that it eventually is paid by the end user, regardless of the bureaucratic steps in between. We can try and figure out who is directly paying them but I feel like that detail is unnecessary to my overall point. | | |
| ▲ | RupertSalt 5 hours ago | parent [-] | | US Consumers pay in fungible dollars, and so if your company paid for three pizzas eaten by an AWS team, and I paid for 1 ounce of Maersk fuel oil, and our Starbucks venti latte purchases paid to rethatch Juan Valdez's hut, who can even trace the serial numbers on our $1 bills? | | |
| ▲ | quickthrowman 5 hours ago | parent [-] | | A tariff is included in the cost of a product by the final seller. The final buyer ultimately pays the tariff. It doesn’t matter who sends the actual tariff payment, it gets priced into the cost of the product. | | |
|
| |
| ▲ | vkou 2 hours ago | parent | prev [-] | | > then I would expect to see a notation on the price tags and a line-item on my receipts, Trump started threatening anyone who was going to do that, because he doesn't want his face attached to price hikes. |
| |
| ▲ | Windchaser 7 hours ago | parent | prev | next [-] | | > The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user. Eh, standard business school logic these days is that if you want to maximize profits, you should charge what the market will bear, not your costs + some fixed profit. So if you're already charging what the market will bear, there may be more wiggle room to absorb some of the hit of tariffs, so long as it still leaves you making enough profit or in a favorable position. It still comes down to what maximizes tariffs: at higher prices, demand drops, but at lower prices, your profit/item drops. Still, yeah, from what I understand, the bulk of the tariff costs were passed along to customers. | | |
| ▲ | tombert 6 hours ago | parent [-] | | Sure, there might be some wiggle room in some of the margins, and when tariffs were like 10% that might have been something close to “sustainable”, but that doesn’t extrapolate forever. When Trump enacted 125% tariffs on China, they by definition couldn’t eat the cost. |
| |
| ▲ | furyofantares 7 hours ago | parent | prev | next [-] | | > I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started. It's what POTUS was saying since day 1. That we've been getting ripped off and we're gonna make the other countries pay us etc etc etc. It is, as I said in the post, obviously wrong - but that's where it comes from. | | |
| ▲ | whattheheckheck an hour ago | parent [-] | | Well its completely wrong. Tariffs are regressive consumer taxes that hurt people who make <$200k/year the most while enriching the inner circle of crony capitalism. Corrupt and should be prosecuted for such criminal robbery of the American people |
| |
| ▲ | dboreham 2 hours ago | parent | prev [-] | | It wasn't a "rumor" it was explicit deliberate disinformation. Unfortunately many people in the US have insufficient education and accurate news feeds to realize. See also: disinformation that "other countries charge us the same tariffs", which turns out to be either a plain lie, or they mean VAT (a sales tax, like we have in the US). | | |
| ▲ | DonaldFisk 2 hours ago | parent [-] | | Here's Trump's claims debunked in detail: https://www.factcheck.org/2025/08/recapping-trumps-deceptive... "But we found that Trump’s so-called “reciprocal” tariff rates weren’t based on tariffs that other countries charged on goods coming from the U.S. Instead, the Office of the U.S. Trade Representative came up with the rates by dividing the size of a country’s trade imbalance with the U.S. in goods by how much America imports in goods from that nation. " |
|
| |
| ▲ | AnimalMuppet 7 hours ago | parent | prev | next [-] | | Well, the analysis by the Federal Reserve said that domestic entities (consumers and companies) paid 90% of it. So, yes, saying that consumers pay it all is wrong, but it's less wrong than saying that foreign countries pay it all. I don't recall seeing a split between domestic consumers and domestic companies, but I'm fairly sure that consumers are paying more than the 10% that foreign entities are. | |
| ▲ | Hikikomori 7 hours ago | parent | prev [-] | | It's much more true than saying that the foreign company pays it. Depends on how much slack there is in profit margins for both the exporter and importer, but the consumer does pay most of it, like 90%. | | |
| ▲ | 6 hours ago | parent | next [-] | | [deleted] | |
| ▲ | RupertSalt 4 hours ago | parent | prev [-] | | I recommend that commenters shell out and pony up for a thesaurus before its import duty is magnified sixfold. |
|
|