The US Customs and Border Protection (CBP) has shared some details about how the agency plans to refund the US$166 billion collected as part of President Donald Trump’s tariffs, which were ruled unconstitutional by the Supreme Court.
But hard-hit consumer products manufacturers and toy companies likely won’t be popping the champagne yet, since there’s only just a plan in place at this point.
The agency says it intends to set up an automated process in 45 days that would require “minimal submission from importers”. The system is meant to manage the “unprecedented” number of refunds that the courts have ordered CBP to process, said executive director for trade programs Brandon Lord in a filing on Friday. As described in this document, an importer would file a declaration through CBP’s platform (called ACE), including a list of entries on which it paid duties. ACE would then validate the entries and re-calculate the duty owed, with CBP verifying the amount before the Treasury issues the refund electronically.
Lord says CBP needs to take the time to set up this automated process, because the alternative method of issuing the refunds would involve roughly four million hours of manual work. Back in February, the agency vowed to issue all refunds electronically, but “many importers” haven’t taken the steps to get their refunds, Lord said in his filing. More than 330,000 importers paid the International Emergency Economic Powers Act (IEEPA) duties, and only 21,000 or so have completed the process. CBP also says it has been unable to process more than 7,000 refunds because importers have missed steps in the submission system.
Judge Richard Eaton, who is handling the case, didn’t want to hear any excuses. He came down hard on CBP on Friday, noting that “the clock is ticking” for it to get refunds out. Interest on the duties is accruing to the tune of US$650 million per month, he wrote. If tariffs aren’t refunded before the end of the year, US$10 billion in interest will rack up, with American taxpayers bearing the brunt of those costs. The court reviewed Lord’s 13-page proposal for this new system and ordered a progress update on March 12.
While the filing represents progress for toycos that have been reeling from the tariffs, there are still a lot of questions around the CBP’s new process, including how long it might be until toycos and other companies can get their refunds. And even though the sweeping tariffs from last year were overturned, Trump has introduced a new 10% global tariff under a different legal justification. And this one has already been challenged in more than 20 states, meaning the industry could go through a similar process all over again, before the first situation is even resolved.
Illinois-based toyco Learning Resources and its sister company hand2mind filed the lawsuit that brought the tariff question to the Supreme Court in the first place, arguing that their ability to sell toys to retailers and schools at an affordable cost was negatively affected by the tariffs. And the toycos’ CEO and chairman Rick Woldenberg says there’s reason to be optimistic, even after being devastated by the tariffs.
He said his company paid out US$11 million toward the tariffs, and for every dollar the company made, it was paying more than a dollar on the levies. There are only two possibilities for a company in a situation like that, he said: “Either you go along with a scheme where the government has you slowly liquidate your business into their pocket, or you have to pass on these taxes.” Learning Resources passed them on to consumers by raising prices.
The company reduced its spending, and stopped making certain products to save on its bottom line. And it had to quickly reorganize its supply chain to move 3,000 products it was making in China to a manufacturer elsewhere, adding that the reorganization required 90 people working full-time.
Even with all that, and with the president implementing new tariffs as soon as the Supreme Court nullified the earlier ones, Woldenberg says he’s remaining optimistic, since both the Supreme Court and Judge Easton seem to be on the side of the affected importers.
He says he doesn’t know when his refund is coming, but he expects “we will see the money in due course.” And while he waits, he’s focused is on getting his company, which boasts Blue Zoo’s Numberblocks as a license, back to business as usual.
“I think we may be still having to contend with various steps by this government that we object to,” says Woldenberg. “But if there are issues with compliance with law, I’m sure that there will be ways to address them. But equally, the Supreme Court has made it clear what is not possible. And so I think that we’re better protected than we were.”
Updated 6:06 p.m. ET with quotes from Learning Resources’ Rick Woldenberg.











