Will Your Small Business Get a Tariff Refund? Here Is the Honest Answer.
- 1 day ago
- 7 min read
The headlines say $166 billion in refunds are available. Most small businesses will not see a direct government check. Here is why — and what you should actually do.
The Headlines Are Exciting. The Reality Is More Complicated.
You have probably seen the news. The U.S. Supreme Court ruled earlier this year that President Trump's tariffs — imposed under a federal law called the International Emergency Economic Powers Act, or IEEPA — were unconstitutional. The government collected those tariffs illegally. Now, U.S. Customs and Border Protection (CBP) has launched an online portal called CAPE and the federal government owes up to $166 billion in refunds.
So where is your check?
Here is the honest answer that most of the news coverage has buried: the vast majority of small businesses in Pennsylvania and across the country will not receive a direct government refund — even if those businesses were genuinely harmed by the tariffs. Whether you have any path to recovery depends entirely on your specific role in the supply chain.
Understanding this distinction is the most important thing you can do right now.
The One Question That Determines Everything: Were You the "Importer of Record"?
The federal government's refund program is not available to every business that suffered because of tariffs. It is available only to the "Importer of Record" (IOR) — the legal entity that physically cleared imported goods through U.S. Customs and paid the tariff duties directly to CBP at the point of entry.
Think of it this way: the government collected tariff money from whoever was standing at the border, so to speak. The government is only writing refund checks to that same person — regardless of what happened to those costs further down the supply chain.
Which Category Does Your Business Fall Into?
You ARE the Importer of Record if:
Your business directly imported goods from other countries, you or your customs broker filed the customs entry paperwork (CBP Form 7501) in your business's name, and you paid the tariff duties directly to U.S. Customs.
You are NOT the Importer of Record if:
You bought products from a U.S.-based distributor, manufacturer, or wholesaler who sourced them from overseas — even if that supplier raised its prices on you because of the tariffs.
If you are unsure, the quickest way to find out is to look at your purchase invoices. Did they come from a U.S. company, or did you personally arrange the overseas shipment and customs clearance? If a U.S. supplier sold you the goods, you are almost certainly not the Importer of Record.
The Reality for Most Small Businesses: You Absorbed the Cost, But the Refund Goes Elsewhere
Most small businesses in Pennsylvania — retailers, contractors, restaurants, service providers, manufacturers purchasing domestic materials — were not importing goods directly. They were buying from American distributors, wholesalers, or manufacturers who, themselves, were importing goods from overseas.
When those upstream importers got hit with IEEPA tariffs, they did what businesses do: they raised their prices. Those higher costs flowed down the supply chain and landed on you. You paid more for your inventory, your supplies, your materials. But the tariff refund goes back to the importer at the top of that chain — not to you.
As one hardware store owner in North Carolina described it after the Supreme Court ruling: "Wholesale prices went up. Retail prices went down. I was the one caught in the middle." He is not the importer of record. He will not get a government refund check. His situation is typical of the vast majority of U.S. small businesses.
The Uncomfortable Bottom Line
If your small business is a retailer, restaurant, contractor, or service provider that purchased goods through domestic suppliers — and most small businesses are — you will not receive a direct government refund through the CAPE program, no matter how much your costs increased due to tariffs. The government's program was not designed with downstream businesses in mind.
But Wait — Is There Any Path to Recovery for Downstream Businesses?
The answer is: possibly, but it is not simple, it is not guaranteed, and it will require you to act now while evidence is still fresh. Here are the realistic options for businesses that were not the Importer of Record:
Option 1: Review Your Supplier Contracts and Invoices
Some businesses that are not the Importer of Record may still have a legal claim to recover a portion of the tariff refunds — but only if the right documentation exists. Legal experts advise that downstream businesses should immediately review:
Supplier price increase notices — particularly any emails, letters, or updated price lists that explicitly cited IEEPA tariffs as the reason for price increases. This type of documentation directly connects your cost increase to the tariff and may support a claim against your supplier.
Invoices with separate tariff surcharge line items — if your supplier listed the tariff as a separate line item (rather than simply raising the unit price), that is strong evidence that the tariff cost was specifically passed through to you.
Supply agreements and purchase contracts — look for any language in your vendor agreements regarding duty pass-through, price adjustment mechanisms, cost-plus pricing structures, or good faith obligations. Some contracts — though rarely — include language that would entitle you to a share of any tariff refunds.
Course of dealing evidence — even without explicit contract language, courts may consider whether prices consistently tracked tariff changes up and down as circumstantial evidence that tariff costs were being passed through.
Option 2: Contact Your Suppliers Directly Now
Importers who received the tariff refund money will not automatically send a check downstream. Some will. Most won't — unless they are asked, or unless they have a legal obligation to do so.
The best time to assert your position is before the refund checks arrive, not after. Once an importer has received and spent a $500,000 government refund, recovering a share of it becomes significantly harder.
Consider sending a written notice to your key suppliers now, preserving your position and requesting that they share any refunds attributable to goods you purchased. The act of sending a written notice — even informally — establishes a record and puts the supplier on notice before the money flows. Consult with a business attorney before sending such a notice, particularly if the relationship is ongoing and complex.
Option 3: Watch for Class Action Litigation
A number of class-action lawsuits have already been filed by consumers and downstream businesses against large importers and retailers. If you purchased goods from a large national chain or distributor that absorbed tariff costs and received a substantial refund, you may eventually be a member of a class that receives some recovery — but this is speculative, slow, and likely to yield modest individual amounts.
If You ARE the Importer of Record: Act Immediately
If your business does directly import goods and you are the Importer of Record — this includes many manufacturers, some retailers, and businesses that buy directly from overseas suppliers — you have a genuine and direct right to a government refund, and you should act now. The CAPE portal opened on April 20, 2026, and there are time-sensitive eligibility windows.
Check out our practical guide for Pennsylvania importers and small business owners navigating the new CAPE portal and claiming their share of up to $166 billion in unlawfully collected tariffs.
What About the Tariffs That Are Still in Effect?
One more important point that often gets lost in the headlines: not all tariffs have been struck down, and new ones have already been put in place.
The CAPE refund program covers only the IEEPA-based tariffs — the "reciprocal" tariffs, the so-called "Liberation Day" tariffs, and the fentanyl-related tariffs on Canada, Mexico, and China that were in place from early 2025 through February 2026. The Supreme Court ruling did not touch:
Section 232 tariffs on steel, aluminum, automobiles, and other national-security-designated goods — these remain in effect.
Section 301 tariffs on Chinese goods — these remain in effect.
The new Section 122 tariff — a 10-15% blanket import surcharge the Trump administration imposed in response to the Supreme Court ruling, currently set to run through approximately late July 2026.
What this means practically is that if your business has seen costs remain elevated despite the Supreme Court ruling, that is likely because the other tariff regimes remain in force. The tariff environment is still significantly more expensive than it was in early 2025, and there is active litigation and legislative activity that could change it further in either direction.
What Small Business Owners Should Do This Week
Determine your IOR status. Ask yourself: did my business directly import goods and file customs paperwork in our name? If yes, contact your customs broker today. If no, move to step 2.
Gather your supplier documentation. Even if you are not the IOR, collect and preserve all emails, notices, and invoices in which your suppliers mentioned tariffs as a reason for price increases. Organize this now, while it is fresh and available.
Review your supplier contracts. Pull out your vendor agreements and look for any pricing provisions, tariff pass-through language, cost-plus structures, or good faith obligations. If you find anything relevant, consult with a business attorney.
Consider a written notice to key suppliers. If your documentation is strong and the amounts at stake are significant, putting your supplier on written notice of your position — before their refund arrives — is sound strategy. A business attorney can help you do this in a way that protects the relationship while preserving your rights.
Do not assume the tariff environment has normalized. New tariffs are in place, the legal landscape is still shifting, and costs may continue to fluctuate. Build tariff uncertainty into your pricing and purchasing strategy for the foreseeable future.
Questions About Your Business's Specific Situation?
Whether you are a direct importer seeking to file a CAPE claim, or a downstream business exploring whether your supplier is obligated to share a refund, Fiffik Law Group, P.C. can help you evaluate your options. Our attorneys advise Pennsylvania businesses on trade, contract, and commercial legal matters.