I accepted the risk when I ordered a penguin from Argentina: Uncle Sam might tax it.
It wasn’t one of the actual flightless birds; it was a green ceramic pitcher resembling a penguin with a curved handle and beak serving as a spout, often used to pour house wines at cheap bars in Buenos Aires. The “pingüino” can trace its origins to the Italian immigrants who arrived in Argentina in the early 20th century and caught on in popularity among the working class.
The penguin arrived two weeks later in early November alongside some spices. Surprisingly, there was no trouble. The Argentine e-commerce company had relayed I was probably not paying customs duties. That was a big concern, since the package was delivered around three months after President Donald Trump ended the de minimis exemption allowing tax-free imports for shipments under $800. The coast was clear.
Or, so I thought. FedEx hit me with a $45 tariff bill on my $21.99 penguin out of nowhere a month later and demanded payment. “Your duties, taxes, and fees are due,” the company wrote in a brief text message.
Disputing the tariffs didn’t get me anywhere; FedEx responded by only claiming responsibility for the package as the transporter. Stuck with no good options, I begrudgingly paid the tariff in the name of protecting America’s (nonexistent) domestic pingüino industry.
Then, the landmark ruling came. The Supreme Court in February demolished many of Trump’s tariffs as illegal, including the ones that led to my $45 penguin bill.
It didn’t settle anything on refunds, though, leaving at least $175 billion in limbo for lower courts and the US Court of International Trade, which has jurisdiction over trade law cases, to decide the next steps. Now, it’s a mess involving lawsuits from companies and from customers, a combative White House, public relations concerns, midterm politics, and competing legislative fixes in Congress. Depending on where you fit into this mix, you might be getting a full refund — or nothing at all.
Shortly after the high court decision, FedEx quickly joined the growing armada of at least 2,200 US companies suing for refunds. The parcel shipping giant didn’t specify how much it was seeking.
FedEx did break from the pack in one significant way: The company announced they intended to refund the duties to all customers who paid them.
Now, FedEx owes me $45. Perhaps I’ll even get a little interest on it, so it turns out more of a prudent investment, too.
FedEx and other major US companies moving on tariff refunds
In my case, the answer resolved itself unusually quickly.
But, that’s not going to be the typical experience for most consumers who have paid higher prices due to the tariffs, even if they are ultimately refunded to the companies suing the administration.
FedEx is uniquely positioned to offer direct refunds not only to importers but individual customers. As a customs broker, FedEx advances duties to US Customs and Border Protection (CBP) on behalf of the importer of record for consumer shipments originating overseas — costs it then passes on to individual recipients, many of whom complained about surprise bills from global shipping carriers when the tariffs took effect.
“I can imagine tens of thousands, if not a million people, that have done the exact same thing with FedEx, that had money come and collected from you after the fact for a specific product because you owe the duties, taxes and fees,” Bernie Hart, the vice president of customs at supply chain company Flexport, told Vox.
And indeed, it’s possible the decision to refund me and others wasn’t just a PR move. Both FedEx and UPS faced class action lawsuits from customers in the days following the Supreme Court ruling, which argued that any refunds should be passed to them.
As a practical matter, global logistics companies like FedEx maintain a paper trail on which customers pay tariffs and how much, smoothing out any possible refund process. It’s much harder for other businesses — clothing and grocery stores, manufacturers, big box retailers — to do the same, since they simply raised prices. Walmart isn’t able to directly refund a customer who paid more for Chinese-made Barbie dolls or Japanese-produced TVs.
Nor is it always easy to find one simple number that represents the consumer’s share of the tariff. A company might have accepted lower profit margins to make up some of the costs of importing goods or made a decision to hold off on planned hiring or cancel capital investments while the tariffs were in effect.
Most major businesses are likely to set aside the refund matter until the cash is back on their books. Some, though, are proactively trying to get ahead in the corporate scrum. Recently, Costco CEO Ron Vachris pledged to find ways to refund whatever it gets to customers “through lower prices or better values.” He added in a post-earnings call the company wants to be “transparent” in how it channels those savings back to customers.
The brewing political fight in the November midterms and beyond
The fate of my penguin’s tariff refund isn’t just being decided in corporate boardrooms. US policymakers are also arguing over who should foot the bill, and the issue could find its way into campaign debates in this year’s elections.
During last year’s legal fight around the tariffs, the Trump administration stated in legal filings that it would refund the tariffs plus interest — if the import taxes were invalidated.
Their public tone since the decision is usually more combative. Treasury Secretary Scott Bessent has lambasted tariff refunds as the “ultimate corporate welfare” and suggested Americans might never see the money given the long legal process ahead.
It’s easy to see how larger duty bills can wreck smaller companies already operating with thin revenue margins.
The litigation imbroglio could stretch for months to come, especially if the administration drags out the process in court. At the end of February, government lawyers initially sought a three-month delay in a late-night filing, stating there was no need to rush a decision when businesses could be made whole with repayment later. A federal court rejected their argument and ordered them to prepare for refunding the illegal tariff revenue. But, the White House could potentially appeal the decision.
Even if the court’s word is final, logistical issues could gum things up. In its latest update on March 12, Customs and Border Protection said in a legal filing that it’s building an online portal capable of processing refunds en masse that’s still not finished. It could take another month at least.
“The problem with the administrative apparatus is going to be the number of claims that are filed,” Tim Meyer, an international trade law professor at Duke University School of Law, said. “I don’t think the administration is probably sufficiently staffed to be able to handle the volume of claims they’re likely to see.”
In the meantime, Democrats want to cast the Trump administration as pickpockets refusing to refund voters ahead of November’s midterms. They’re already seeking to draw attention to the issue using messaging bills and by sending public letters to Trump officials, as well as business groups.
Senate Minority Leader Chuck Schumer and 23 other Democratic senators late last month rolled out legislation that would prioritize small businesses in receiving tariff refunds with interest. The same group simultaneously sent a letter to Bessent. Many Democrats are eager to campaign on it.
“On the face of it, this reminds voters about an unpopular policy that broke Republicans’ top promise that they would lower costs,” Andrew Bates, a Democratic political consultant and ex-Biden White House aide, told Vox. “At the same time, Trump and Bessent are generating terrible sound bites by resisting giving people their money back.”
Out of power, Democrats in Congress don’t have many levers to pull beside applying public pressure. During a recent floor speech, Schumer pressed the Chamber of Commerce to urge member companies to pass tariff refunds to consumers.
“American consumers and small business didn’t choose this trade war, and therefore should not have to pay for this trade war. They are owed a refund,” he said. “They need to be made whole.”
Sen. Ron Wyden of Oregon co-signed a letter with Schumer addressed to Chamber of Commerce President Suzanne Clark on the matter. It cited FedEx’s example on refunds and said, “We urge others to follow their lead.”
Democratic governors eyeing 2028 White House runs jumped into the refund fray, as well. California Gov. Gavin Newsom has demanded Trump sign off on tariff refund checks. Illinois Gov. JB Pritzker called for $1,700 tariff refunds to families in his state.
The White House has also tried to get ahead of the political attacks. US Trade Representative Jamieson Greer said US companies should steer refunds to their employees as either raises or bonuses.
Up to now, Republicans have given Trump broad leeway to carry out his erratic tariff policies. Last month, House Republicans rebuked Trump’s unilateral import taxes on Canada, displaying cracks in the GOP’s governing coalition.
Those fissures appear to extend into the Senate, where at least one Republican senator is growing tired of the administration’s defiant tone on refunds. Retiring Sen. Thom Tillis of North Carolina relayed an experience he heard from a small business owner hit with an unexpected tariff on a $5,000 fabrication machine routed through Hong Kong.
“Between the time he ordered it and the time it got shipped, there was a $2,000 tariff put on it,” Tillis told Vox. “That small businessperson doesn’t think that’s corporate welfare.”
The tariff applied to the Argentine penguin was little more than a nuisance to me. But, it’s easy to see how larger duty bills can wreck smaller companies already operating with thin revenue margins, as I reported last year on a pair of toy stores in New York and Wisconsin stuck dealing with double-digit tariffs that led to layoffs and paused expansion plans.
The Trump administration now gets to decide if it wants an agonizing process that saddles businesses with bureaucracy and eats into their tariff refunds to be part of its legacy. Companies and consumers seeking a clear answer on when — or if — they’ll see that money are stranded without one for now.
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