transcript

Speaker 1:
[00:01] NPR.

Speaker 2:
[00:12] How do we get our money back? Business owners have wondered this for two months now, ever since the Supreme Court ruled that most of last year's tariffs set by the Trump administration were illegal. That's an estimated $166 billion due in refunds.

Speaker 1:
[00:29] At first, the government argued it might not be able to refund the tariffs at all. Then it seemed businesses might have to sue for their money. But then, in a matter of weeks, came a website from US. Customs where importers can at least try to get their refunds. It went live this week.

Speaker 2:
[00:49] This is The Indicator from Planet Money. I'm Adrian Ma. And we have NPR business correspondent Alina Seljuk here because you're introducing us to three small business owners.

Speaker 1:
[01:00] Who are three among the tens of thousands racing to get their tariff refunds. So, early on, as Trump administration officials argued that refunds would be very difficult to do, many business owners were really confused because tariff refunds actually happen all the time.

Speaker 2:
[01:22] Right. There's already this web portal called ACE, A-C-E, and it's like a website where importers can have an account that keeps track of all their customs duties. And if there's an error, they can raise a flag for the government to take another look and maybe refund anything that the business overpaid at the border.

Speaker 1:
[01:42] And so it made perfect sense when US Customs eventually did say, okay, we'll use this existing system for mass scale tariff refunds, but we'll have a new tool inside the system specifically for claims related to Trump's tariffs that got rejected by the Supreme Court. That portal is called CAPE.

Speaker 2:
[02:01] And it stands for Consolidated Administration and Processing of Entries. Just rolls off the tongue.

Speaker 1:
[02:08] I will quiz you on this at the end.

Speaker 2:
[02:11] And so this CAPE tool, it opened for the first phase of claims on Monday. And not all imports qualify quite yet, but the majority do.

Speaker 1:
[02:20] And there was a lot of trepidation about this tool, like would it hold up under the onslaught of tens of thousands of people, all uploading spreadsheets all at the same time.

Speaker 2:
[02:31] Yeah, people want their billions of dollars back.

Speaker 1:
[02:34] And one of those people is Alfred Mai, and he recorded in real time his experience filing these claims.

Speaker 3:
[02:41] It is currently 7, 17 a.m. Pacific time. I'm going to open up the web page now on the Ace Portal and try to log in.

Speaker 2:
[02:52] Alfred sounds bright-eyed and bushy-tailed.

Speaker 1:
[02:55] Right after he got his kids up and ready, but before taking them to school. So Alfred runs a small business in California. It's called ASM Games. It makes party card games, like one's called Do You Really Know Your Family? Or the other one's called These Guards Will Get You Drunk?

Speaker 2:
[03:15] Those sound like two games that you do not want to play at the same time.

Speaker 1:
[03:18] It depends on your family, I guess.

Speaker 2:
[03:20] I guess so, yeah. These game packs, by the way, are made in China. So when Alfred imports them into the US., he has to pay tariffs. And he says every penny he spent on tariffs last year was overturned by the Supreme Court. He had 17 shipments, and he says the government owes him $162,000 in refunds.

Speaker 1:
[03:40] With interest.

Speaker 2:
[03:42] With interest, very important.

Speaker 1:
[03:43] And Alfred was pretty skeptical that he'd ever see that money, he actually kind of still is, but he did a ton of preparation. He spent a while figuring out this ACE portal, he leaned pretty heavily on AI for help getting all his paperwork in order. There was confusing guidance on what types of spreadsheets he would need.

Speaker 2:
[04:02] And when he went to file his refund claim on Monday, I guess I'll just click on the red upload button.

Speaker 3:
[04:10] There we go. Okay, it is done. I was fast. I guess that's it.

Speaker 1:
[04:16] Filing hysteric claim took him a total of about five minutes.

Speaker 3:
[04:20] I guess I'm a little surprised that a government launched a system that worked on its first try. I guess I'm also surprised that the Trump administration actually complied with the court order. So I guess I'll hold my breath until I actually see the money deposited into my bank account. But so far, everything seems to be pretty straightforward and simple.

Speaker 1:
[04:41] It really helped that Alfred had learned his way around the A system. Because if you didn't, things get complicated really fast.

Speaker 2:
[04:50] In fact, many small business owners are nowhere near ready to file their claims. Because they'd never had to deal with their own customs forms. Lots of small companies rely on customs brokers or freight forwarding companies to take care of all the tariff paperwork.

Speaker 1:
[05:05] For example, Rebecca Melsky. She runs a clothing brand called Princess Awesome and Boy Wonder. And it's just her and her business partner here in Washington DC.

Speaker 4:
[05:14] So it hasn't actually been clear to me until like last week, what we were going to have to do and what was going to be done for us.

Speaker 1:
[05:22] Like she's had a customs broker, so she wouldn't have to know how an ACE portal works. And some brokers are doing the Trump tariff refund paperwork. But in Rebecca's case, she says her broker and her lawyer say she needs to file herself. So she's sorting all of this while like her kids are on spring break and she's busy running her business.

Speaker 2:
[05:42] And we've heard from a few business owners like Rebecca. They're spending hours on hold with customs, trying to fix technical errors on their account, or they're struggling to even log in to ACE to begin with.

Speaker 4:
[05:54] So I put in the parts that I think it's basically just my name and information. Then I get to the bottom, I click submit by email and nothing happens.

Speaker 2:
[06:02] Now, Rebecca's company makes clothing all around the world, in Asia and South America. She figures the government owes her company about $32,000.

Speaker 1:
[06:11] $32,000, how meaningful is that for your business?

Speaker 4:
[06:16] It's very meaningful. We're a really small company. That's basically like somewhere around 15% more than what we had expected to pay in production.

Speaker 2:
[06:24] To cope with some of the increased costs, Rebecca says they did a few things. They cut their own pay, they raised the price of some of their newest designs by about 5%.

Speaker 1:
[06:34] They even tried asking customers for help covering these new government taxes.

Speaker 4:
[06:38] We also put a tip jar at checkout, where we explicitly said, want to help us cover the cost of tariffs, and people were pretty generous, which was really kind.

Speaker 1:
[06:51] This is often where the next question is, will her shoppers get that money back?

Speaker 2:
[06:57] Yeah, well, they continue to feel generous and kind.

Speaker 1:
[07:01] If Rebecca eventually figures out how to log into A's, how to file the claim and actually gets that government refund, what happens next?

Speaker 2:
[07:09] Now, shoppers really feel like they carried a lot of the tariff burden, and indeed, we have been paying higher prices because of tariffs. But it's the businesses who had to absorb the cost of them first. It's really tricky for them to figure out how to refund shoppers, because for them, it wasn't just tariffs that raise costs, it was also utilities and insurance. Or in Rebecca's case, she actually absorbed a fair amount of the additional tariffs by just not paying herself as much.

Speaker 1:
[07:38] She says for the tip jar specifically, she would likely offer those folks store credit or something like that.

Speaker 2:
[07:44] That's when or if she gets a federal refund.

Speaker 1:
[07:47] Exactly. That's something I also heard from Sarah Wells. She's from Virginia. She makes backpacks and accessories for nursing moms. They used to come from China, now they come from Cambodia, and Sarah was super prepared for her tariff refund claim, but she's not celebrating yet.

Speaker 5:
[08:04] Well, first of all, until we see the money in the bank, the chapter's not closed. Today was another big step, another big victory, but it could still be months and months down the line before we ever see this money in our account.

Speaker 2:
[08:14] The government says the refunds will take about 60 to 90 days after a claim is accepted.

Speaker 1:
[08:19] But the other thing hanging over all this is that Trump has already announced new batches of tariffs.

Speaker 2:
[08:26] You might remember the tariffs the Supreme Court struck down were based on a law called the International Emergency Economic Powers Act or AIIPA.

Speaker 1:
[08:35] And immediately after that Supreme Court ruling, Trump went for new ways to set tariffs under different sets of laws. That includes using the Trade Act of 1974, specifically sections 122 and 301.

Speaker 5:
[08:48] So right now 122 is costing me an additional 10%, which is a substantial amount on top of everything else. And section 301, we don't know what percent they're looking at. And they said that could come up as soon as July. So at this point, I'm really just sitting on this money thinking it's going to go right back into tariffs again.

Speaker 1:
[09:04] And just to be clear, she's not actually sitting on any money yet.

Speaker 2:
[09:08] Because she hasn't gotten a refund yet. This episode was produced by Corey Bridges with engineering by Quacey Lee. It was fact-checked by Sierra Juarez, Cake and Cannon edits the show, and The Indicators production of NPR.