| ▲ | sillysaurusx a day ago |
| That’s smart though. If you don’t want to lose your rights to tariff refunds, don’t sell them. Would the alternative be to forbid companies from selling those rights in this case? As for whether consumers should get anything, I’m sympathetic. It’s a matter of implementation though. How would you refund so many people? You’d have to quantify how much overhead they’ve paid in tariffs, and that seems like an IRS-scale job. Dealing with it at the scale of individual companies is at least tractable. |
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| ▲ | jacquesm a day ago | parent | next [-] |
| It's not smart, it's extortion by someone connected to the state and self dealing. If you think this is smart then you may as well go around clubbing old ladies over their heads, as long as you don't get caught it's like free money right? The alternative is not to forbid companies from selling those rights, the alternative is to undo this deal and pay the whole amount back to those that originally forked it over and who needed to sell these 'rights' in order to keep their companies alive. |
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| ▲ | koolba a day ago | parent | next [-] | | How is it extortion? They could have gotten a different deal from anybody else or no deal at all. Nobody was twisting there arm or forcing them to deal with this one company to sell their tariff claims. | | |
| ▲ | matthewdgreen a day ago | parent | next [-] | | If two companies come to you with an offer to sell the refunds, and one has strong ties to a central figure in the administration — which can, in the future, subject or exempt you from new tariffs and otherwise use the Federal government’s powers to mess with you - are you truly free to choose either offer? Or is there a risk and a benefit to taking the one that’s tied to the administration? (And frankly, can you even be certain either way?) This kind of conflict (even the appearance of this kind of conflict) is why we generally don’t want government officials or their families to be profiting directly off the policies they oversee. It is at best unseemly, and that’s being kind. | | |
| ▲ | eszed a day ago | parent | next [-] | | Thank you. Yes, this is the reason to be concerned. Not because it's extortion, or anything else like that, but because having to evaluate a counterparty's degree of connection to the State before doing a deal is not the way that free enterprise or open markets are supposed to work. Lutnik Jr's involvement puts every other bidder for these contracts at a disadvantage (even if it's illusory, and he's not personally acting badly), and distorts pricing signals. It's unfair not (or not primarily / directly) to customers, but to the rest of the legitimate players within an industry. Yes, I know this isn't the first time this has happened, and that people likewise benefit from connections to governments led by other political parties. Those instances are also bad! | |
| ▲ | koolba a day ago | parent | prev [-] | | > If two companies come to you with an offer to sell the refunds, and one has strong ties to a central figure in the administration — which can, in the future, subject or exempt you from new tariffs and otherwise use the Federal government’s powers to mess with you - are you truly free to choose either offer? Yes, because tariffs, like all taxes in the USA, are not imposed on individual people or entities. They’re on industries and specific materials. If a company truly thought the chance of winning was low and needed the money now, they would pick the best offer. Regardless of who is making it. | | |
| ▲ | matthewdgreen a day ago | parent [-] | | This is naive. For larger firms, targeted product and industry-specific tariffs can be a game-changer. For example, Trump created a set of exemptions related to smartphones built in China that weren't officially aimed at Apple, but since Apple sells approximately 50% of US smartphones (for a much larger slice of profit) and 80% are made in China, this disproportionately affected a single company. But there are other areas where the administration can also use Federal power: see, for example, Trump's use of Federal approval to block the Netflix/WB merger as one example. |
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| ▲ | krsw a day ago | parent | prev [-] | | This is basically the government doing a protection racket. I swear, the amount of neoliberals in here lauding the move is a recession indicator. Did we all forget what corruption is? | | |
| ▲ | jacquesm a day ago | parent [-] | | Corruption is so endemic now that people stop seeing it. This was the same in the former USSR, when I was there I would be utterly amazed by the degree to which everybody had normalized corruption, it was not considered anything wrong or special at all, it was just the way business was done. You could effectively buy your way into or out of anything. |
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| ▲ | gruez a day ago | parent | prev | next [-] | | >It's not smart, it's extortion by someone connected to the state and self dealing. Where's the extortion? The "it's a nice shop you got there..." racket only works if you can strongly influence whether the damages occur (ie. you tell your goons to attack the shop, or not). So far as I can tell however, that's not the case, because Trump wanted the tariffs to stay, and was sad that they got revoked. Going back to the mob analogy, it would be like if the mob boss asked for protection money, the goons didn't damage the shop, the mob boss was sad that the shop didn't get damaged, and then went to to find some other way to damage the shop (ie. section 122 tariffs). | | |
| ▲ | hedora a day ago | parent | next [-] | | Extortion rackets come in many forms. For example, NCR (National Cash Register) used to have their sales people "accidentally" break competitive machines (dropping them on the floor was common -- these were old precision mechanical adders), then offer an NCR machine as a "free" replacement. You could argue this wasn't extortion. What are the damages? The replacement machine was higher value, so the shop was "made whole", and was only temporarily without a cash register. Of course, the competitor got screwed out of support contracts + renewal, and it was made very clear to the stores they had to play ball. (Unless they wanted to buy a replacement, and watch it also get smashed.) It's the same with the tariffs: Adopt a bunch of Trump dictated policies, or they steal your money (the mechanism is not providing exemptions). Later, they "refund" the payments (so, no further court action), but somehow the money does not go back to the people that it came from. Ignoring the businesses that sold their rights to collect, all sorts of prices have skyrocketed in the last year. The consumers that are paying the increased amounts at retail are not going to see a cent of this settlement. Where is my check? Also, it's unclear how many Supreme Court justices changed their votes because of the sold rights to collect refunds. The company involved gave a lot of money to Trump and conservative campaigns, and many of the justices are in his pocket. It's also unclear if they bribed the justices directly, since that's not public data. On top of that, when these "securities" were sold, it could have been made clear that they would come with favoritism in the future. Did businesses that paid up get special exemptions? Were they threatened with intimidation that then didn't happen because they sold the rights? All of the above is standard practice with this administration. They had the benefit of the doubt, but burned through it years ago. | |
| ▲ | jacquesm a day ago | parent | prev [-] | | You think businesses as a rule can all survive a 15 to 100% surcharge on their products without running into liquidity issues? | | |
| ▲ | gruez a day ago | parent | next [-] | | The stocks of major retailers haven't cratered, so maybe? You're going to have to present some figures rather than just asking rhetorical questions. | | |
| ▲ | jacquesm a day ago | parent [-] | | You have to present figures when you're arguing the hard-to-prove side of something not when it's plain obvious that business are not in a position to deal with such shocks in the market without having to reach for capital. This is not normal. Typical operating margins of business is anywhere from 5 to 20% with outliers in the digital domain but that's not the part that we are talking about here. Anyway, you want figures, well, here are some figures: https://marketrealist.com/why-did-700-bu/ I'm sure there are other sources, better ones, worse ones but they all tell roughly the same story: willy nilly tarrifs have a negative effect on one's ability to operate a business. Businesses like predictable, stable climates to operate in. | | |
| ▲ | NetMageSCW a day ago | parent [-] | | There’s a long way from businesses like predictable stable climates (and that ship has long sailed) and business won’t survive. There’s no reason to believe the latter is true. | | |
| ▲ | jacquesm a day ago | parent [-] | | At a guess you are not operating a business that adds value to real goods subject to overnight surprise tariffs then. |
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| ▲ | bluGill a day ago | parent | prev [-] | | Those are a sunk cost at this point though. The business likely is better off having sold and got the money now - vs risking they will never get a refund. |
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| ▲ | AnimalMuppet a day ago | parent | prev [-] | | Self-dealing by someone connected to the state, yes. Extortion, no. It takes a fair amount of money to take a court case to the Supreme Court. You can pay it all (and still maybe lose), or you can let the law firm have part of what you win. This happens all the time in the US legal system. It's not extortion; it's essentially venture funding by the law firm. (Yes, I'm aware of the pattern in the previous sentence, but I'm in fact a human, and not even LLM-assisted.) If the company doesn't want to play that way, they don't have to. They can pay the full cost of the lawsuit themselves. | | |
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| ▲ | podgietaru a day ago | parent | prev | next [-] |
| Wasn't the whole point of selling your right to refunds that the initial tariff was so onerous to businesses that they needed a cash injection to stay afloat. Don't sell your right to your tariff refund is one of those things that sounds good in principle, but falls apart when you apply some sense to it. |
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| ▲ | gruez a day ago | parent | next [-] | | >Wasn't the whole point of selling your right to refunds that the initial tariff was so onerous to businesses that they needed a cash injection to stay afloat. No? You also do it for certainly. "One bird in hand beats two in the bush" and all that. You see this occurring outside of tariff refunds, with businesses selling debts to debt collectors for pennies on the dollar, or bond holders selling high risk bonds (eg. Argentina) for steep discounts. | |
| ▲ | phil21 a day ago | parent | prev [-] | | Is a 20 cent on the dollar or so payment for the new tariff expense really going to save a company that much on the bubble? I'm sure there are a few exceptional cases, but that doesn't seem to me like it would be the typical cases. A company needing to pay $100 in tariffs but then the $20 of cash infusion being the thing that saves the day seems rather unlikely. I'd say it's more likely this was a profit center to more companies than it was a life line. As in they passed the tariff down to their consumers, and also collected the 20% as a cash payment to juice the bottom line. More common though would be simply a way to help defray some costs and provide certainty. | | |
| ▲ | NetMageSCW a day ago | parent [-] | | I really hope those companies that passed the tariff to consumers are required to refund the increase to those same consumers, regardless of whether they sold their refund or not. |
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| ▲ | hermanzegerman a day ago | parent | prev | next [-] |
| It's enriching himself on the taxpayers expense. Or would you trust someone on advising you, that has a pretty huge financial interest in proposing you policies that will fail because they are illegal? |
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| ▲ | NetMageSCW a day ago | parent [-] | | What evidence do you have that those tariffs were proposed by him? | | |
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| ▲ | bhouston a day ago | parent | prev | next [-] |
| > That’s smart though. If you don’t want to lose your rights to tariff refunds, don’t sell them. Would the alternative be to forbid companies from selling those rights in this case? Definitely smart, but also sure looks like an insider play / corruption / self-dealing. |
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| ▲ | Ajedi32 a day ago | parent [-] | | The commerce secretary has no control over what the Supreme Court does. Anyone could have read the law and decided whether they thought the tariffs were legal or not. | | |
| ▲ | hermanzegerman a day ago | parent | next [-] | | The commerce secretary has in this case a huge conflict of interest in pushing for these illegal policies in the first place | | |
| ▲ | AnimalMuppet a day ago | parent [-] | | The commerce secretary wasn't the one pushing for them in the first place. The president was. I mean, look, there's plenty of conflicts of interest, and stuff that sure looks like graft, and claims of people making insane amounts of money off of stuff. But in this case, the commerce secretary's options were 1) do the tariffs or 2) get fired. Minion? Sure. Minion without the self-respect or ethics to quit when they were being told to do unconstitutional stuff? Also sure. Pushing these policies, as though they had agency in the matter? No. |
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| ▲ | simmerup a day ago | parent | prev [-] | | But he does know that Trump had no plan to contest the supreme court or make new laws | | |
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| ▲ | vincnetas a day ago | parent | prev | next [-] |
| i guess there would be much more initiative for Lutnik not to refund (ignore courts order, or drag them out like in other cases) if no one would have sold their rights to refund. |
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| ▲ | izacus a day ago | parent | prev | next [-] |
| Calling outright corruption at the expense of citizens as "smart" is quite a statement of morality O.o |
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| ▲ | pocksuppet a day ago | parent [-] | | In this economy, morality is dead. There is only profit extraction. |
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| ▲ | nkohari a day ago | parent | prev | next [-] |
| I don't think anyone is disagreeing it's a shrewd decision by the corporations, just that it shouldn't benefit the Secretary of Commerce. We're a long way from having to put your peanut farm in a blind trust to avoid the perception of corruption. |
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| ▲ | UncleMeat a day ago | parent | prev | next [-] |
| Imagine instead if the government didn't do the illegal thing in the first place. Or if the supreme court had not intervened on the initial stay of the tariffs to allow them to go into place while the suit proceeded. The fact that businesses were put in a position to make this choice is outrageous in the first place. |
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| ▲ | coldpie a day ago | parent | prev [-] |
| > It’s a matter of implementation though. How would you refund so many people? This was the point of the tariffs, wasn't it? The White House now has a $130B slush fund to distribute more or less however they want, with no accountability because accountability is by-design impossible. Sure maybe half of it will go where it ought to as a fig leaf, but a very large chunk of that cash will be making its way to Trump's loyalty crew. |
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| ▲ | magicalhippo a day ago | parent [-] | | > The White House now has a $130B slush fund to distribute more or less however they want, with no accountability because accountability is by-design impossible. The government knows exactly who paid what in duties, otherwise they couldn't tell if you were trying to avoid duties. So they know exactly who to pay back and how much. | | |
| ▲ | coldpie a day ago | parent [-] | | > The government knows exactly who paid what in duties No, they have a record of who handed the money over to the government. This does not tell you who paid the duties. There's going to be a whole lot of Trump toadies & business owners in the chain, siphoning cash from refunds before they work their way back to the people who actually paid them. And that's not even getting into the open corruption & fraud that will be happening as part of this as well. | | |
| ▲ | magicalhippo a day ago | parent [-] | | > No, they have a record of who handed the money over to the government. This does not tell you who paid the duties. The entity that handed over the money to the government is the entity that paid the duties, and is the one the government must refund. If an entity has passed those costs on does not change that, and does not turn the 130B into a slush fund. However I agree that consumers will be likely be royally screwed by this debacle, that much was obvious from the start. | | |
| ▲ | coldpie a day ago | parent [-] | | If the government charges the importer $20 and the importer charges me $20, then I am in effect the one who paid the duty. If the refund goes to the importer, and it does not come back to me, then the government and the importer have colluded to rob me of $20. This isn't an accident, the owners of the import companies who will benefit from this theft were almost certainly all Trump supporters. In reality, half of the funds will go to that. Maybe even some tiny portion of it will genuinely make its way back to the people who actually paid the duties. This is the fig leaf to which I referred. The other half will go to Trump toadies in the form of "mistakes," fraud, corruption, skimming, unclaimed funds, etc. This is the slush fund to which I referred. In the end, all of it is going to Trump toadies. It's a $130B transfer of wealth to Trump's financial backers. | | |
| ▲ | phil21 a day ago | parent | next [-] | | That’s not how commerce works. You agreed with your supplier on a price. You paid it. Doesn’t matter that part of the price was tariffs or component costs or labor. Doesn’t matter if your supplier gets a tax rebate or a kickback from an upstream supplier after the fact. These things are entirely immaterial to the meeting of the minds when you execute the contract for sale. The only moderately fuzzy case is going to be if there is an outright line item for “tariff charge” - I always thought companies were being a bit reckless explicitly adding these as line items due to this exact uncertainty. Very few companies are going to have a perfect 1:1 ratio here so there is some definite business risk in doing so. And no, not even close to all companies that were charged tariffs are “trump toadies” - that’s an absurd claim on its face. The ones I know hurt the most and nearly put out of business due to needing to raise prices certainly were not. And there is zero way they could afford refunding at a 1:1 ratio now. | | |
| ▲ | coldpie a day ago | parent [-] | | > Doesn’t matter if your supplier gets a tax rebate or a kickback from an upstream supplier after the fact. It does matter if the tax that was gathered was illegal, as it is here. The illegally gathered funds should go back to the entity that paid the tax, not the middleman who ferried it from here to there. The unclear method for how to accomplish this is where the grift will be coming in. > not even close to all companies that were charged tariffs are “trump toadies” I did not claim this. I claimed most of the money that will be refunded will go to Trump toadies. | | |
| ▲ | phil21 a day ago | parent [-] | | > I did not claim this. I claimed most of the money that will be refunded will go to Trump toadies. That would require most of the money collected being from trump toadies to begin with. Anyone that regularly imports goods as a matter of business will also be requesting their refunds. Only a tiny fraction sold their rights. > It does matter if the tax that was gathered was illegal, as it is here. The illegally gathered funds should go back to the entity that paid the tax. The entity that paid the tax was the one that wrote the check to the federal government. They chose to (or not) pass all or a portion of those costs down to their customer. The customer in the end chose to purchase the goods or not. If your landlord charges you $100/mo more in rent due to a property tax that was later reassessed due to a mistake, they are under no legal obligation to refund you that money. You chose to rent at the higher price. Simply put: Your recourse was at the time of transaction. After that it’s no longer your money. Plenty of companies get refunded errant taxes paid years later due to law being misapplied or even found outright illegal. This is no different. The only marginally interesting legal question here is going to be the companies that separated it out as a line item. I imagine this will be roughly as enforceable as “fuel surcharges” are on airline tickets - where the surcharge has nothing to do with the actual real time cost of Jet fuel. It will likely devolve all the way down to specific clauses in contracts, most of which will not cover this to start with. So it may as well be a “I’m wearing black socks today” tax as a line item would be my guess. Very interested in the first few test cases though! | | |
| ▲ | coldpie a day ago | parent [-] | | > Your recourse was at the time of transaction These illegal taxes weren't only on optional goods. I couldn't opt out of buying everything for a full year. I disagree that it's OK for the government to force everyone in the country to give a $130B gift to business owners via an illegal action, the vast majority of which will be going straight to the wealthiest companies & people, and/or Trump's personal supporters. It's just straight-up theft. |
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| ▲ | Detrytus a day ago | parent | prev [-] | | Maybe I'm naive, but if court orders tariff refunds cannot it also order that the importer must return it to individual buyers? That's only fair, right? Companies don't get to keep the money. If they want to sue government for some extra compensation for their trouble they can do that separately. |
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