Illinois businesses have mixed results with tariff refund process

Illinois businesses report mixed experiences navigating the tariff refund process, after U.S. Customs and Border Protection launched an online portal Monday for firms to start filing claims.

Some companies submitted documents smoothly but are anticipating obstacles in getting refunded. Others are still trying to understand the complex guidelines before filing claims.

The U.S. Supreme Court in February ruled that some tariffs imposed by President Donald Trump last year were unconstitutional. Last month, the U.S. Court of International Trade determined that companies subjected to tariffs under the International Emergency Economic Powers Act were entitled to refunds.

Toymaker Learning Resources of Vernon Hills, a plaintiff in the Supreme Court case, filed about 5,000 entries on Monday.

“The process went smoothly for us. We requested a refund in excess of $10 million,” Stephen Woldenberg, Learning Resources’ senior vice president, said. “We have other entries that we expect to submit at later stages in the refund process as well.”

Customs and Border Protection said in court filings that over 330,000 importers paid a total of about $166 billion on more than 53 million shipments, as of March 4.

Not all of those orders qualify for the first phase of the refund system’s rollout, which is limited to cases in which tariffs were estimated but not finalized or within 80 days of a final accounting.

To receive refunds, importers have to register for CBP's electronic payment system. As of April 14, 56,497 importers had completed registration and were eligible for refunds totaling $127 billion, including interest, the agency said.

Plastic Film Corp. in Shorewood makes swimming pool liners and other industrial materials at factories in Southeast Asia and North America. The company filed claims through its broker’s custom clearing office in a couple of hours on Monday morning.

“We've already been notified that all of our Phase 1 entries have been accepted,” Plastic Film Corp. CEO Joel Bittner said.

Plastic Film began working on its documentation in November, in anticipation of potential refunds while following the U.S. Supreme Court case. The company has 20 employees worldwide, with 14 in Illinois.

Bittner said this year’s court rulings give “reasonable expectations” of refunds.

“However, I am not hopeful that there won't be at least one attempt to block the return of the funds, either through the Trump administration appealing the international court ordering the refunds, or some other government intervention,” he said.

“As expected, [Monday's] refund portal launch is a mixed bag for small businesses,” Dan Anthony, executive director of national grassroots group We Pay the Tariffs, said. “Many in our coalition report challenges getting their online accounts in order to file. Among those who were ready to file [Monday], some reported a seamless process, while others received error messages and delays.”

St. Charles-based wholesale gift business The Winding Road imports goods from Nepal, Indonesia, Morocco, India, Peru and other countries. It sells to more than 3,500 retail stores across North America, Europe and Australia. Founded in 2011, the company has seven employees.

Owner Marla Showfer hasn’t yet applied for refunds and is still digesting “confusing instructions” on the government’s website. Winding Road’s customs broker, a large global logistics company, is charging $500 to file claims on their behalf; Showfer will likely hire it.

“I think it would take us too long to figure it out ourselves,” Showfer said.

Sari Wiaz, owner of Baby Paper in Northbrook, will file claims through her sourcing agent.

“She has told me that the process is complicated, and she therefore hired someone to guide her through the process,” Wiaz said. “We are all anxious to get our money back, but I am anticipating it to be longer than what is being conveyed, particularly for small importers that do not have the staff and resources.”

As they navigate the refund process, businesses are still weathering the impact of tariffs.

For Plastic Film, tariffs of about 60% have had “severe and lasting damage,” Bittner said.

“When the tariffs took effect, we were not given time to restructure our supply chain, renegotiate contracts or build adequate reserves. We were simply handed a dramatically higher cost of doing business overnight,” he said in a statement.

“To stay afloat, we were forced to do something we had worked hard to avoid: We borrowed money. … And with that debt came interest expenses that compound our burden month after month. We are now paying not only the tariffs themselves, but the ongoing cost of having had to finance them. Every dollar spent on interest is a dollar not spent on our people, our products or our future.”

Contributing: AP