When Massachusetts personal trainer Alex Grossomanides ordered a French down jacket last year, he thought he had locked in a solid deal. That excitement quickly faded when a $400 bill for tariffs and processing fees landed in his inbox — a charge that came close to matching the purchase price of the coat itself. The unexpected cost stemmed from a little-known detail: the parka was manufactured in Myanmar, which at the time fell under a 40% US tariff rate, adding $248.04 in duties alone. Months later, the U.S. Supreme Court overturned the controversial 40% tariff and dozens of other levies first introduced by former President Donald Trump, triggering what is set to become the largest tariff refund program in U.S. history. But even as authorities prepare to launch the repayment process, thousands of consumers and small business owners like Grossomanides fear they will never see their money returned.
The court’s ruling only extends eligibility for refunds to importers who paid the duties directly to U.S. Customs. This narrow scope excludes the vast majority of people who ultimately bore the cost of the tariffs through indirect channels: higher retail prices, hidden processing fees, and supply chain markups. Grossomanides, who paid his tariff through global shipping firm DHL, says he wants to believe he will recoup his funds, but he has received no communication from the company and is not optimistic. “They should be refunding people,” the 37-year-old said. “It’s all my money and I took the hit for it, which I don’t think is fair.”
In March, the U.S. Court of International Trade ordered U.S. Customs and Border Protection to return the more than $160 billion in duties the federal government collected from the invalidated tariffs, opening the door for roughly 330,000 direct importers to claim back at least a portion of their costs. Fears that the Biden administration would challenge the court order have not come to pass, and customs officials working on the program say the refund portal is scheduled to go live this month, with a progress update due to the Court of International Trade on April 14. Even so, economic analysts warn that fully reversing the financial damage of the tariffs is functionally impossible. Multiple independent studies confirm that most importers already passed the bulk of tariff costs on to consumers in the form of higher prices — a cost shift that the court’s ruling does nothing to address.
For small businesses across the country, the pain is particularly acute. Sue Johnson, owner of Sue Johnson Lamps, a small lighting design firm based in Berkeley, California, says her business suffered a major blow when the tariffs forced her mica supplier to double the price of the raw material she uses for her Art Deco-inspired lamp designs. Despite the Supreme Court ruling, Johnson says she has no expectation of receiving any compensation for the extra costs she absorbed. “Maybe big direct importers will get repaid, but I have no hope they’re going to refund me,” she said.
Small importers note that the issue is far more complex than the refund program acknowledges. While many raised prices to offset tariff costs, most could not raise them enough to cover the full expense, eating into already thin profit margins. Beyond direct duty costs, the tariffs triggered a cascade of secondary financial harm: many small businesses took on high-interest debt to cover unexpected duty bills, lost sales from price-sensitive customers, and spent thousands of dollars on administrative work just to navigate the claims process. Kacie Wright, who works for Houghton Horns, a small Texas-based importer of musical instruments, told a forum hosted by small business advocacy group We Pay the Tariffs that even if her firm ultimately receives a refund, it will not make the business whole. “Just making sure our business was lined up to receive a refund has been costly, requiring more than six months of back-and-forth with customs officials to properly register in the agency’s online system,” Wright explained.
Jared Slipman, chair of the tax department at law firm Obermayer, which advises dozens of small businesses on the refund process, says U.S. Customs has placed the full burden of gathering documentation and filing claims on the claimants themselves. For many small businesses, Slipman says, the administrative requirements are so burdensome that many will conclude the potential payout is not worth the time and cost of applying. Other businesses, he predicts, will be forced to file additional litigation just to recoup the funds they are owed. Most of all, Slipman says, ordinary consumers get the worst end of the deal. “It may very well be the case that this is an orchestrated theft from the American consumer… and that would be very unfortunate,” Slipman said.
For consumers like James Tak, a 41-year-old Washington resident who paid a $24 tariff fee to UPS last year when he received a shipment of video games as a gift from a friend in Japan, even small charges add up. Tak says he understands that processing refunds for millions of indirect payers would be a logistical nightmare, but he still believes he is owed his money back. “I just think it’s money I shouldn’t have to pay,” Tak said.
A small number of shipping firms, including global logistics giant FedEx, have publicly stated they intend to pass any refunds they receive back to the consumers and small businesses that originally paid the charges. But most importers have issued only vague, limited promises, especially for firms that passed tariff costs through to consumers as general price hikes rather than separate line-item charges. The dispute over unclaimed refunds has already sparked a wave of class-action lawsuits against major U.S. retailers and brands, including warehouse club Costco, eyewear maker EssilorLuxottica (parent company of Ray-Ban), and activewear brand Fabletics, founded by actress Kate Hudson. Fabletics previously broke out tariff charges as a separate line item on customer receipts, leading plaintiffs to accuse the firm of “unjust enrichment” — collecting extra tariff costs from customers and now standing to collect the same funds again from the federal government.
Adrian Bacon, head of litigation at the Law Offices of Todd Friedman, which brought the class-action suit against Fabletics and is investigating multiple other firms, says while government watchdogs like the Federal Trade Commission typically handle consumer protection issues, the involvement of federal trade policy means private legal action is the only available avenue to force companies to pass refunds on to consumers. That has not stopped current Trump administration officials from weighing in on the debate. U.S. Trade Representative Jamieson Greer last month called on companies that receive “windfall” refunds to pass the money on to workers in the form of performance bonuses. Last February, Treasury Secretary Scott Bessent cast doubt on the likelihood that ordinary consumers would ever see any of the refund money. “I got a feeling the American people won’t see it,” Bessent said.