By Siddharth Cavale
NEW YORK, Feb 20 (Reuters) – Distributors and retailers that lack legal status as importers could miss out on as much as $175 billion in tariff refunds that may follow a landmark U.S. Supreme Court decision.
The U.S. Supreme Court on Friday struck down sweeping custom duties imposed by President Donald Trump last year under a law meant for use in national emergencies. The court did not elaborate on refunds from the tariffs.
More than 1,800 importers including big-box retailer Costco, auto parts maker BorgWarner and tiremaker Goodyear have filed lawsuits seeking tariff reimbursement since February 1, 2025, court documents show.
Yet distributors, retailers and other downstream suppliers that are not classified as the importer of record – the legal entity responsible for bringing goods into a country – may not be able to legally claim any refunds, the International Chamber of Commerce has warned.
“It will require, I think, a lot of goodwill on the part of businesses to find a way through this otherwise you’re probably going end up with quite a large degree of litigation between companies,” Andrew Wilson, ICC deputy secretary general, told Reuters on Friday.
DISTRIBUTORS HAVE SENT IMPORTERS WARNING LETTERS
Wary of such risk, these companies are warning importers in writing that they may stop doing business with them if they aren’t compensated for sharing the Trump tariff burden, according to Vinicius Adam, a trade attorney at VAdam Law who has filed five such cases on behalf of importers seeking refunds paid under the International Emergency Economic Powers Act.
“(Distributors and retailers) are sending legal documents in the hope that some importers will sign,” Adam said.
He said some of these companies argue that their contracts give them a right to the money. Others claim importers shouldn’t be allowed to keep the refunds because they relied on the distributors to help pay the tariffs. And some say it’s simply unfair for importers to keep all the money themselves.
Recovery of funds will in any case depend on companies’ contractual arrangements.
So far, none of the entities that are not importers of record have filed lawsuits, Adam said. Reuters could not independently verify that claim. Adam said the threat of ceasing business with importers will be more effective than lawsuits for companies seeking a share of refunds.
Amrita Bhasin, CEO of logistics company Sotira, which works with retailers and consumer product companies on overstock inventory, said the company would likely not pursue independent legal action despite raising prices throughout the year due to tariffs.
“It’s not just the financial inconvenience, it’s the inconvenience of everything else,” Bhasin said, noting that as a small startup, messaging, compliance and customer communication would “cost a lot of money, energy and time, as well as stress.”
(Reporting by Siddharth Cavale in New York and Josephine Mason in London, Editing by Lisa Jucca and Nick Zieminski)
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