Trump-Era Tariffs Ruled Unlawful: 230 Trillion Won in Refunds Spark Clash Between Companies and Consumers

Large-scale refunds began in earnest in May, and companies are now reporting the amounts in their earnings during the August earnings season.

The problem is that many of these tariffs were reflected in product prices and borne by final consumers, or, depending on trade terms, paid by overseas exporters. Yet refunds are in principle paid to the companies that are the U.S. importers of record, and some firms are criticized for withholding how they will use the money or for pocketing it without cutting prices. Some companies have promised price cuts or direct refunds to consumers, while others remain silent and are reportedly using the money internally.

Major U.S. media outlets such as CNN, Forbes, and Fortune have widely reported the tariff refund situation, pointing out that the tens of billions of dollars in refunds amount to a windfall for large corporations. These outlets largely expect most companies not to return the money directly to consumers, and have voiced concern about the lack of consumer benefit.

This law expands presidential authority over trade restrictions during national emergencies, something that can be described as an economic martial law. However, the U.S. Supreme Court found that Trump had abused this authority by using the law to impose tariffs for political purposes rather than national security.

The total tariffs to be refunded amount to 166 billion dollars, roughly 230 trillion won, an enormous sum. That is close to one-third of South Korea's national budget of about 700 trillion won this year. Refunds of this magnitude are expected to affect about 330,000 importing companies in total.

As of August, refund claims worth 129 billion dollars out of the 166 billion dollars total had been accepted, and 100 billion dollars of that had been transferred to the Treasury. However, the number of import entries awaiting refunds has reached 53 million, leaving U.S. Customs and the Treasury facing enormous administrative challenges.

Global major corporations such as Apple, Ford, and Nike are among the main beneficiaries of the large-scale tariff refunds. Apple received 2.2 billion dollars, roughly 3 trillion won, making it one of the largest beneficiaries. Ford received 1.3 billion dollars, Nike 1 billion dollars, and Amazon 640 million dollars, with other major companies also receiving large sums. The amounts each company received vary with its business scale, but all of them brought significant inflows of cash.

Apple said it would use its roughly 3 trillion won in refunds for investment in U.S. facilities. PepsiCo used the refund to cover costs arising from raw material and shipping inflation. McCormick also used it to offset cost increases, and TJX paid part of its refund out as employee salaries and bonuses, showing internal use of the funds.

Some companies have drawn criticism for remaining silent about how they will use large tariff refunds. Nike's net income surged 400% in the quarter ending in June, yet it has not disclosed any plan for the 1 billion dollars in refunds. Even when asked about tariff refunds in official settings such as earnings conference calls, many companies have not disclosed concrete plans.

The defendants include large retail and consumer goods companies such as Costco, Amazon, Nike, Lululemon, IKEA, Nintendo, and Sony. Multinational companies, including Japanese firms that sell products in the United States, have not escaped being named as defendants.

Uniqlo argued that its price increases reflect labor and logistics costs and have nothing to do with tariffs. Nintendo is pursuing a refund lawsuit against the U.S. government, and in the consumer suits it has taken a hard line, even warning of price increases, which has further fueled consumer anger.

Among Korean companies, large corporations are actively taking part in the tariff refund process. LG Electronics has already received tariff refunds from the U.S. government, and major firms such as LG Energy Solution and Samsung SDI have also applied for refunds. However, of South Korea's 24,000 exporting companies, 6,000 (25%) paid tariffs under DDP (Delivered Duty Paid) terms, meaning they included the tariffs in their selling prices. The problem is that smaller companies find it difficult to clearly establish who keeps the refunds when contracting with large buyers, so they may fail to recover them. Concern is growing that the ultimate ownership of refunds is unclear, especially for smaller exporters with weak bargaining power.

Meanwhile, former President Trump has made remarks that appear to treat whether companies apply for tariff refunds as an indicator of loyalty, pressuring firms that do not file by saying he will remember them. Such pressure has raised concern that companies may hesitate to apply. In addition, the U.S. recorded a fiscal deficit of 432 billion dollars in July, reaching a record-worst level, and with rising Treasury yields and growing medical spending adding to fiscal strain, large-scale tariff refunds could place further pressure on the government's finances.