Trump's tariffs declared invalid and the unprecedented consequences

When tariffs are no longer merely a matter between governments and businesses

In recent weeks, several major American companies such as Nike and Amazon have become targets of class action lawsuits filed by consumers over tariff-related costs. The lawsuits emerged after multiple tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA) were found by the United States Court of International Trade (CIT), and subsequently by the Supreme Court of the United States, to exceed the President’s legal authority.

In the lawsuit filed against Nike, the plaintiffs allege that the sportswear company increased prices for various footwear products, apparel, and equipment in order to offset tariff costs on imported goods, but failed to refund those costs to consumers after the tariffs were declared invalid. Nike is currently facing allegations of “unjust enrichment” and engaging in unfair trade practices against consumers.

A similar lawsuit has also been filed against Amazon. Consumers accuse the e-commerce giant of earning hundreds of millions of U.S. dollars by increasing prices of imported goods to offset tariff costs, while consumers - rather than Amazon - were the parties that ultimately bore those price increases. Notably, the complaint further alleges that Amazon did not seek tariff refunds from the government not because it lacked legal grounds, but in order to maintain favorable relations with President Donald Trump after Trump reportedly held a direct phone call with billionaire Jeff Bezos, the founder of Amazon.

Who must refund consumers?

Following the rulings of U.S. courts, thousands of businesses have begun seeking refunds from the government for billions of U.S. dollars in tariffs already paid. However, the current legal framework does not automatically guarantee that consumers - who are alleged to have borne most of the increased costs - will receive corresponding refunds. This is giving rise to a new form of dispute in the United States, as the legal consequences of tariff policies begin extending into the fields of consumer protection and corporate responsibility.

Notably, although the tariffs have been declared invalid, U.S. law currently does not contain a clear mechanism requiring businesses to refund the portion of costs borne by consumers through increased prices of goods. Under existing regulations, the party entitled to seek tariff refunds from the government is the importing business - namely, the entity that directly paid tariffs to U.S. customs authorities - rather than consumers.

This creates a rather unique legal gap. In many cases, importing businesses passed most tariff costs on to purchasers through higher retail prices. However, once courts concluded that the tariffs exceeded the President’s legal authority, consumers were left without a direct mechanism to seek refunds from the government, even though they were the parties that actually bore those increased costs.

This very ambiguity is now becoming the central issue in lawsuits filed against Nike, Amazon, and many other businesses in the United States. The plaintiffs argue that if businesses receive tariff refunds from the government without reimbursing consumers, such companies could effectively obtain a “double benefit” - first by passing tariff costs on to consumers while the tariffs remained in effect, and later by recovering the tariffs paid after those measures were declared invalid by the courts.

However, from the perspective of businesses, the issue is far from straightforward. Companies may argue that increased product prices reflected not only tariff costs, but also numerous other factors such as supply chains, operational expenses, and pricing strategies. This makes it extremely difficult to determine precisely how much of the additional cost was actually attributable to tariffs.

In addition, tariff refunds - if granted - do not necessarily mean businesses will immediately receive money from the government. The refund process may take months or even years due to procedures involving U.S. Customs and Border Protection (CBP), as well as the possibility of further legal disputes arising during appellate proceedings.

While businesses have begun seeking refunds for billions of U.S. dollars in tariffs already paid, the question of who should ultimately bear responsibility for reimbursing consumers still appears to have no clear answer under U.S. law.