by However, this also must be weighed against the time and cost involved in getting this money back plus the fact many companies are currently still paying tariffs of 10%-25%
WASHINGTON — Now that U.S. Customs has set up a way for companies to claim tariff refunds owed by the federal government, many furniture importers are starting to get in line to claim what they have paid over the past year.
At stake is millions of dollars of tariffs the U.S. Supreme Court determined that the government collected illegally under the International Emergency Economic Powers Act. For furniture importers, these tariffs ranged from 19% to 20% from countries such as Malaysia and Vietnam to nearly 150% from China.
The amounts owed vary depending on the size of the importer and the value of what they imported from specific source countries. Some have said the amounts are less than a few million dollars, while for others they can be in the 10s of millions, if not more.
Sources interviewed by Home News Now have said they are in the process of claiming their funds, either by working with a law firm, their logistics broker or some other type of firm with customs expertise.
With such large sums of money at stake, the refunds potentially represent a windfall in a slow retail environment. But before companies start to celebrate, there are other factors at play, including the expense and time needed to even request a refund.
For one, many likely will end up paying a fee to the firm representing them in their quest for the refunds. This is partly because of the time and energy spent in setting up an account in U.S. Customs’ Automated Commercial Environment (ACE) Secure Data Portal. According to the U.S. Chamber of Commerce, it has taken some importers three to four weeks to set up a new ACE account.
Indeed, the chamber noted, the process is complicated as it requires each company to determine whether all IEEPA entries will be covered by the ACE system’s initial rollout or whether there are exceptions including liquidated entries or entries flagged for reconciliation or those covered by an open protest.
Once the refund amounts are determined, they could be issued within days, but sources note that the process leading up to them is indeed complicated and time consuming. Thus having a law firm or customs broker’s help could be key to making sure refunds are not only determined correctly, but are also handled as quickly and efficiently as possible.
Importers have acknowledged the time and expense involved.
“We have trade lawyers doing this for us,” one executive told Home News Now. “It costs money to get our money back. It’s expensive.”
Some companies interviewed by Home News Now had a general idea on how much they are owed, while others are still working with legal counsel to help determine this.
“The process is finally moving,” one source told Home News Now. “I think it’s a positive.”
As the importer of record, most importers we interviewed for this story paid the duties directly to customs and the amounts paid are based on the first costs from an overseas manufacturer. Retailers that acted as the importer of record also paid the tariffs directly to customs.
In each case, these importers of record will get the money back directly, minus the costs paid to a law firm or customs broker helping out with the process.
Where this gets complicated is whether they will be expected to pay any costs borne by the retailer or manufacturer that contributed to the tariffs. For example, in many cases, suppliers covered their own costs by imposing price increases or surcharges based on the tariffs.
“Every importer has had to pass some costs along,” an industry executive said. “A big chunk of them got passed along to the retailer, and that’s how we got inflation and slower demand in furniture.”
Others also acknowledged this same cycle of having to pass along increased costs resulting from tariffs.
“We have been the importer of record on everything,” another executive stated. “We paid 100% of the tariff and then of course we had price increases and of course all of our customers raised their prices to the consumer based on the price increases they paid.”
The good news is that suppliers contacted for this story indicated they have not gotten any inquiries or requests from retailers requesting a cut of the tariff refunds thus far. This likely is because it’s too early in the process as some importers say they don’t know exactly what they are getting back.
Others also interviewed for this story said that they are still paying tariffs that President Trump imposed within a day of the Supreme Court deciding the IEEPA tariffs were illegal. Those global tariffs range from 10% to 15%.
Other companies are paying 25% tariffs on upholstery imported from most countries along with 25% tariffs on steel and aluminum, which are used in products such as outdoor furniture, upholstery mechanisms and metal bed frames.
“I have not had any conversations with anybody wanting a rebate or anything like that,” another executive said. “I also don’t know what I would be rebating. I still am paying a tariff.”
However, retailers could use tariff refunds as a negotiating tactic to minimize other raw materials-related price increases on finished product that are expected to take effect after market. Many of these materials increases are directly tied to elevated petroleum costs, a material that is used in anything from foam and finishing materials to packaging materials such as Styrofoam. Labor costs are also increasing in furniture-producing countries such as Vietnam largely related to rising fuel costs caused by the war with Iran.
Regardless, the issue should create some buzz in the industry particularly with the market approaching next week. The good news for importers is that they will undoubtedly get some money back. The question is how far it will go relating to ongoing tariffs and ongoing price increases on raw materials.
For more on tariff refunds, don’t miss contributor Mark Schumacher’s podcast with Adam Dambrov of Frost Law.
What are your thoughts on the subject and how is your company handling the refunds? Feel free to reach out to Home News Now Editor-in-Chief Tom Russell at tom@homenewsnow.com.
