As IEEPA tariff refunds begin reaching importers, companies are now facing a new set of complex commercial, contractual, and compliance decisions that could have significant financial and legal implications.
See the following message from Sidley Austin LLP with key questions you might need to consider to plan ahead.
Now that the IEEPA tariff refunds are starting to flow, it is increasingly important that companies have a plan for how they are going to deal with the associated commercial implications.
If you increased prices because of the tariffs (wholly or in part), are you going to refund some/all of the refunds to your customers? If so, will it be a refund or a credit on future purchases? Are you going to share any of the tariff refund with foreign suppliers who adjusted their prices because of tariffs? If you do, does that create customs valuation issues for past imports? Are you going to seek reimbursement for tariff-related price increases passed on to you by your suppliers? What do your contracts require? What are the commercial realities; do they vary by customer/supplier? What is the risk you will be sued? What can you do to minimize that risk?
These are just some of the questions companies are grabbling with now. The answers are not necessarily easy, so it is important to think through the issues and come up with a plan.
If you have any questions, please contact our office.
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