Malaysian exporters left out of US tariff refund windfall

 

A NEWLY launched refund mechanism now allows companies to reclaim tariffs previously collected by the United States government, prompting a surge of claims from thousands of firms.

The potential payouts could be significant, particularly for small businesses that have been heavily impacted by the sweeping tariff policies introduced by President Donald Trump last year, which affected imports from nearly every country.

More than 3,000 companies, including major names such as FedEx, Costco, Skechers, Revlon, Toyota and Nintendo of America, have already taken legal action against the administration, signalling strong confidence that the tariffs may ultimately be ruled unlawful.

However, eligibility for refunds is limited strictly to those who officially paid the duties. This means Malaysian exporters, despite sometimes absorbing part of the cost, are not entitled to claim any refunds.

Minister of Investment, Trade and Industry Johari Abdul Ghani explained that tariffs are imposed on the importing party in the United States, not on exporters.

As such, only US-based importers recognised by authorities can submit claims. Johari added that although the invalidation of the Agreement on Reciprocal Trade provides some relief, Malaysian exporters are not entirely free from duties.

They remain subject to a 10 per cent tariff under Section 122 of the US Trade Act 1974, a temporary measure pending a revised tariff framework.

Uncertainty still surrounds how smooth the refund process will be. Many business owners remain cautious, especially given earlier indications that Trump opposed returning the funds.

Officials have suggested that it could take months before payments are disbursed, and the White House has not ruled out further legal action to delay or block refunds.

Although the US government has previously been required to return funds after losing trade disputes, the scale of this situation is unprecedented.

By March, more than 330,000 importers had paid duties under the policy, covering over 53 mil import entries.

In total, the government is estimated to have collected more than US$166 bil from these tariffs.

According to Cato Institute vice president Scott Lincicome, the outstanding sum continues to grow, accruing around US$650 mil in interest each month, equivalent to roughly US$22 mil a day. — Focus Malaysia