I accepted the risk when I ordered penguins from Argentina: Uncle Sam might charge it.
He was not one of the real flightless birds; it was a green ceramic pitcher shaped like a penguin with a curved handle and a spout, often used to pour house wine in cheap bars in Buenos Aires. “penguin” can trace its origin for Italian immigrants who arrived in Argentina at the beginning of the 20th century and gained popularity among the working class.
The penguin arrived two weeks later in early November with some ingredients. Surprisingly, there was no problem. An Argentine e-commerce company had sent a message that I might not be paying customs duties. That was a big concern, as the package was delivered almost three months after President Donald Trump ended the de minimis exemption allowing duty-free imports for shipments under $800. The coast was clear.
Or, so I thought. FedEx delivered a $45 tax bill for my $21.99 free penguin a month later and demanded payment. “Your duties, taxes, and fees are due,” the company wrote in a text message.
Being against taxes got me nowhere; FedEx responded by simply claiming responsibility for the package as the carrier. Stuck with no good options, I begrudgingly paid the tax in the name of protecting America’s (non-existent) penguin industry.
Then, a historic decision came. Supreme Court in February it dismantled many of Trump’s tariffs as illegal, including the ones that led to my $45 penguin bill.
It didn’t resolve anything about the refund, though, so it went away at least 175 billion dollars in controversy to the lower courts and the United States Court of International Trade, which has jurisdiction over business law cases, to decide the next steps. Now, it’s a mess involving lawsuits from companies and from customers, a embattled White House, public relations issues, midterm politics and competing legislative amendments in Congress. Depending on where you fit into the mix, you could be getting a full refund — or nothing.
Shortly after the Supreme Court decision, FedEx hurry to join A growing armada of at least 2,200 US companies sue for a refund. The package delivery giant did not specify how much it was seeking.
FedEx broke away from the pack in one important way: The company announced intended for refund responsibility to all paying customers.
Now, FedEx owes me $45. I will probably even earn a little interest on it, so it will turn out to be a wise investment as well.
FedEx and other major US companies continue to file tax returns
In my case, the answer resolved itself with unusual speed.
But, that won’t be a common experience for many consumers who have paid high prices due to taxes, even if they are eventually returned to companies suing the administration.
FedEx is uniquely positioned to offer direct refunds not only to importers but to individual customers. As a customs broker, FedEx collects customs duties with US Customs and Border Protection (CBP) on behalf of the importer of records for customers’ shipments originating overseas – the costs are then passed on to individual consignees, many of whom complained. surprise bill from international exporters when the tariff went into effect.
“I can think of tens of thousands, if not millions of people, who have done the same thing with FedEx, who had money come and be collected from you after the fact for specific products because you owe taxes, duties and fees,” Bernie Hart, vice president of customs at logistics company Flexport, told Vox.
And sure, it’s possible the decision to refund me and others wasn’t just a PR move. Both FedEx and UPS is facing class action lawsuits from customers in the days following the Supreme Court ruling, which said that any refunds should be passed on to them.
As a practical matter, international shipping companies like FedEx maintain a paper trail of what taxes customers pay and how much, streamlining any refund process. It is more difficult for other businesses – clothing and grocery stores, manufacturers, large retailers – to do the same, since they simply raise prices. Walmart cannot issue a direct refund to a customer who paid more for Chinese-made Barbie dolls or Japanese-made TVs.
Nor is it always easy to find one simple number that represents the consumer’s tax base. The company may have accepted lower rates of profit to offset some of the costs of importing goods or made a decision to suspend planned employment or cancel capital investment while the tariff was in effect.
Most major businesses are likely to shelve the issue of refunds until cash is back on their books. Some, though, are trying hard to get ahead in corporate scrum. Recently, Costco CEO Ron Vachris he promised to find a way to return whatever money it earns to customers “through lower prices or better values.” He added in the post-revenue call The company wants to be “transparent” in how it returns those savings to customers.
Political fighting continued in mid-November and later
The fate of penguin tax refunds is not just being decided in corporate boardrooms. US policymakers are also debating who should lead the bill, and the issue could enter into campaign debates in this year’s election.
During last year’s legal battle over tariffs, the Trump administration he said in legal files that it will refund the duty plus interest – if the import duty is not applied.
Their public tone as a decision is usually more combative. Treasury Secretary Scott Bessent has lambasted tax returns as “the ultimate welfare of the organization” and he suggested Americans may never see the money due to the long legal process ahead.
It’s easy to see how big tax bills can wreak havoc on small companies that are already operating on thin profit margins.
The litigation imbroglio could drag on for months to come, especially if the administration takes the process out of court. At the end of February, government lawyers previously searched delay of three months in the delivery of the late night, saying that there is no need to rush the decision when the business can be done in full with the payment later. A federal court rejected their argument and ordered them to do so prepare for refund illegal tax revenue. But, the White House can appeal against the decision.
Even if the court’s word is final, logistical issues can crop up. In its latest update on March 12, Customs and Border Protection he said in a legal filing that it is creating an online portal that can handle bulk refunds that is not yet complete. It may take another month at least.
“The problem with administrative facilities will be the number of claims that will be filed,” Tim Meyer, a professor of international trade law at Duke University School of Law, said. “I don’t think the administration has enough staff to handle the number of claims they’re going to see.”
Meanwhile, Democrats want to cast the Trump administration as usurpers who refuse to win back voters before the November midterms. They are already seeking to highlight the issue with 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 introduced legislation that would prioritize small businesses in receiving tax and interest refunds. The same group at the same time he sent a letter to Besent. Many Democrats are eager to campaign on it.
“In that sense, this is reminding voters of an unpopular policy that broke a key Republican promise that they would cut spending,” Andrew Bates, a Democratic political consultant and former Biden White House aide, told Vox. “Meanwhile, Trump and Bessent are making a bad noise by refusing to give people their money back.”
Once out of office, Democrats in Congress have little leverage other than public pressure. Time recent speechSchumer pressed the Chamber of Commerce to encourage member companies pass tax returns for users.
“American consumers and small businesses did not choose this trade war, and therefore they should not have to pay for this trade war. They deserve a refund,” he said. “They need to be made whole.”
Senator Ron Wyden of Oregon he signed the letter and Schumer directed Chamber of Commerce President Suzanne Clark on the matter. It cited FedEx’s example of refunds and said, “We encourage others to follow their lead.”
Democratic governors vying for the 2028 White House election entered into a fight to recover the moneyas well. California Governor Gavin Newsom he has claimed Trump signs tax refund review. Illinois Governor JB Pritzker made the call Tax refund of $1,700 to the family in his state.
The White House has also tried to get ahead of political attacks. US Trade Representative Jamieson Greer he said American companies should refer to the reimbursement of their employees as a raise or bonus.
So far, Republicans have given Trump broad latitude to implement his tax policies. last month, House Republicans rebuked Trump’s unilateral import tariffs on Canada, showing cracks in the governing GOP coalition.
The rifts appear to have spilled over into the Senate, where at least one Republican senator has grown weary of the administration’s tone of defiance on defunding. Retiring Sen. Thom Tillis of North Carolina recounted an incident he heard from a small business owner who ran into an unexpected tax on a $5,000 machine imported to Hong Kong.
“Between the time he ordered it and the time it shipped, there was a $2,000 tax,” Tillis told Vox. “The small businessman does not think that is the welfare of the organization.”
The tax applied to Argentine penguins was a bit of a nuisance to me. But, it’s easy to see how big tax bills can wreak havoc on small companies that already operate on thin profit margins, like mine. was reported last year at a pair of toy stores in New York and Wisconsin were stuck dealing with double-digit taxes that led to layoffs and halted expansion plans.
The Trump administration is now deciding whether it wants a painful process that clogs businesses with bureaucracy and eats into their tax returns to be part of its legacy. Companies and consumers looking for a clear answer about when – or if – will find that money is stuck without one for now.
