On Friday, February 20volSupreme Court ruled against Trump’s radical tariffs better to know as Liberation Day Tariffs. In a six-to-three decision, the Court held that the President improperly used the International Emergency Economic Powers Act (IEEPA) to enact the tariffs and, therefore, congressional approval would be required for such tariffs.
In its ruling, the Supreme Court left the door open for refunds of the costs of these tariffs paid by American companies. While they provided no resolution or any administrative mechanisms on the matter, one dissent, Brett Kavanaugh, argued that the United States “may be required to refund billions of dollars to importers who have paid IEEPA tariffs” and that the entire process would be a “mess.”
What does this mean for the US coffee industry? Only a petite fraction of the coffee consumed in the United States is grown domestically, and our largest coffee trading partner, Brazil, was hit with a 50% tariff, which placed a significant burden on people buying coffee. Even though we may face the possibility of a refund of the duties paid, at least one roastery is not holding its breath.
As reported Fortunetariffs now deemed illegal have raised an estimated $133 billion, and eliminating them will prove to be a challenge. So hard in fact that The AP is already reporting that consumers should not expect a refund.
However, the doors are still open to businesses, although they do not have great hopes for them. One coffee roastery, Superior Coffee Roating Co in Sault Ste. Marie, Michigan is like that. Their owner, Ron Kurnik, tells Fortune he’s already had to raise prices by 6% twice because of tariffs – as well as reciprocal tariffs imposed by Canada, where most of Superior’s business comes from – and while he’s pleased with the Supreme Court’s ruling, he doesn’t think a refund is likely. “It’s like a nightmare we want to wake up from,” he says.
Already now, a coalition of petite entrepreneurs, the so-called We pay tariffs issued a statement demanding Congress provide a “full, expeditious and automatic” tariff refund. They created a registration letter containing over 800 small enterprises demanding their money back, including many coffee producers. You can sign the letter Here.
Of course, whether any refunds are granted remains, at least for now, at the discretion of the government. Shortly after the Supreme Court’s decision, the President announced a modern 150-day general duty rate of 10% of all imports. (Over the weekend, that number increased to 15%). Therefore, it is reasonable to believe that the administration does not currently seem favorable to this idea. But on Monday Democrats in both the House and Senate have introduced the legislation forcing the government to refund customs duties. In the Senate bill, the Customs and Border Guard Office would have 180% to return the funds with interest.
