Aussie businesses entitled to share in $1.1bn refund if US court overrules Trump’s tariffs

If the US Supreme Court overturns Trump’s ‘liberation day’ tariffs then Australian importers into America could be in line for a massive windfall of refunds, EY modelling shows.

Australian businesses importing into the United States could be in line for a $1.1bn windfall if Donald Trump’s so-called “liberation day” tariffs are ruled unlawful by the US Supreme Court, analysis reveals.

The court is currently considering whether to overturn the US President’s April 2 decision to impose a baseline 10 per cent tariff on almost all imports into the country.

Australia got off relatively lightly as Mr Trump did not impose any higher “reciprocal” tariffs as he did with countries such as China, Thailand and Switzerland.

The tariffs, which Mr Trump imposed under the International Emergency Economic Powers Act (IEEPA), have already been ruled unlawful by lower courts.

If this decision is ratified by the Supreme Court in coming weeks, it could trigger $100bn of refunds in duties globally. Australian companies importing into the US would be owed about $1.1bn, EY modelling has found.

Mr Trump has previously said that such a decision would be a “disaster” for the US.

“If allowed to stand, this decision would literally destroy the United States of America,” he posted to his Truth Social network.

EY global trade leader for Oceania Luke Branson said Australian industries which could gain the most from such a ruling were manufacturers of medical devices and farmers who sell beef, dairy and horticulture into the US market.

“We know there’s been a 26 per cent increase in beef exports … but also dairy, horticulture, medical devices, industrial machinery, robotics, where we’ve got quite a small but vibrant exporting sector,” Mr Branson said.

However, the US Supreme Court decision does not apply to tariffs on steel, aluminium, copper, timber and furniture because these come under different legislation which is not the subject of the legal challenge. Businesses have already paid about $280m in these tariffs this year, according to EY.

Mr Branson said that, in the event of a court ruling finding that the IEEPA tariffs were unlawful, those affected businesses would have to proactively seek any refunds, and he said businesses needed to act now in advance of the “potential windfall”.

Mr Branson, a former Customs officer with expert knowledge of global tariffs, said companies had to lodge a formal protest with the US Customs and Border Protection agency to reserve their right for a refund within 180 days of their import entry expiring.

US President Donald Trump on Thursday signed an executive order to pause tariffs on dozens of imports. Picture: AFP

“For an Australian exporter who has a local distributor in the US, if they’d pay for duties in, let’s say April, when the tariffs started they would need to be thinking about putting forward a protest claim in around about February or March of next year to reserve that right,” he said.

“We’re really keen to get the message out on this, because it’s not just going to flow back into your bank account.”

Mr Branson said the US Supreme Court decision was expected to be announced some time between December and June.

He said that only the person who had paid the import tariff was legally entitled to a refund, and not the end consumer.

“(But) you can imagine if there are refunds, customers will come to Australian exporters and say ‘we would like to share some of that refund’,” he said.

Mr Branson acknowledged that there was a question mark over the “viability of the repayment of such a figure”.

“We’re talking about over $100bn in duties under the IEEPA mechanism. Our $1.1bn is a fraction of that and that’s because we’ve only had the 10 per cent tariff versus much higher tariffs on other countries,” he said.

Last week, Mr Trump caved in to concerns about cost of living in the lead-up to America’s Thanksgiving holiday by signing an executive order to pause tariffs on dozens of imports, including coffee, bananas and beef.

Mr Branson said the decision to level the playing field adversely impacted many Australians importing into the US because they were benefiting from a lower tariff rate compared with competitors in key markets.

The $1.1bn figure just applies to direct exports from Australia, not Australian businesses which manufacture overseas. These could be due much higher refunds because they pay steeper tariffs.

“I’ve got one client that paid around $25m in tariffs over a couple of weeks when the tariffs were 145 per cent (in China) because they needed to continue to supply their customers in the US,” Mr Branson said.

Originally published as Aussie businesses entitled to share in $1.1bn refund if US court overrules Trump’s tariffs