Donald Trump administration’s tariff collections – running into billions of dollars – is threatened in case the Supreme Court decides to strike down the US President’s tariff policies. Trump himself has warned that any decision against his tariff policies would spell disaster.Businesses, which have paid huge amounts in the last few months due to country-based tariffs, believe that getting back refunds in case the tariffs are deemed illegal by the Supreme Court, would be a nightmare.

Tariff refund nightmare

To begin with, this would create administrative challenges involving extensive refund processing. If these nation-specific tariffs are ruled unlawful, the United States might need to return most of the $165 billion in customs duties collected in the current fiscal year to the businesses that paid them, according to a Bloomberg report.However, obtaining refunds will be complicated; reimbursements typically come via paper cheques through a slow process, and whilst the government could expedite mass repayments, experts believe this is doubtful.“The customs authorities won’t simply distribute refunds to importers freely,” Lynlee Brown, global trade partner at EY was quoted as saying by Bloomberg.The uncertainty surrounding the potential refund process exemplifies the broader confusion that businesses and financial markets have experienced since the implementation of Trump’s tariff policies.Several importers have abandoned expectations of receiving reimbursements, even if the court rules in their favour.“I have zero faith we’d ever get anything. Just zero,” expressed Harley Sitner, who owns Peace Vans, a Seattle-based classic camper van repair and restoration business.

Sitner told Bloomberg that the unpredictability of Trump’s trade policies is more problematic than the actual tariff payments, which he views as irretrievable expenses. Following unexpected tariff charges ranging from $221 to $17,000, sometimes arriving months after receiving goods, Sitner has discontinued importing international inventory.“Just yesterday we got a small shipment from Germany worth $2,324 and it came with a $1,164 tariff charge. We can’t back out,” Sitner stated.Various customs brokers report being approached by Wall Street organisations interested in purchasing rights to potential refunds, offering importers an opportunity to recover a portion of their possible entitlements.The significant increase in customs duties – a rise of $95 billion compared to the previous year – is primarily attributed to Trump’s import tariffs affecting multiple economies, which became effective in August, as analysed by Bloomberg Economics. Two lower judicial bodies have ruled that Trump lacked the authority to implement tariffs under the International Emergency Economic Powers Act.Should the Supreme Court uphold these earlier decisions, approximately 50% of the customs duties collected by the United States this year could be subject to refund. However, the process for businesses to reclaim these funds remains uncertain. Despite the government shutdown, tariff-related operations have largely continued uninterrupted.The United States Customs and Border Protection regularly processes refunds for importers in cases of overpayment or regulatory changes, with the Treasury Department issuing the payments. However, this reimbursement process is not automatically initiated.In line with statutory requirements, importers and their customs brokers must adhere to precise timelines and documentation procedures to maintain eligibility for refunds. Currently, the system predominantly relies on paper cheques for disbursement.Despite the Treasury’s directive from the Trump administration to discontinue cheque payments by September 30, the Customs and Border Protection (CBP) only initiated its first phase last Tuesday in what will be an extended implementation process. The system’s completion before any court decision appears unlikely without accelerated efforts.Tom Gould, a customs consultant from Seattle, suggests that potential refunds might result in “it’s possible that we’ll see millions and millions of paper checks being mailed out because each shipment, each customs entry, will have its own.”The process could be problematic. According to the Bloomberg report, due to regulatory requirements, customs refunds are exclusively sent to sanctioned domestic banks in dollars, requiring foreign importers to receive their refunds through international postal services or utilise a broker’s account within the United States.Worryingly, there has been a series of stolen cheque incidents in recent years. According to Gould, refund cheques were intercepted during postal delivery and traded on the dark web before being encashed.The administration possesses various options to expedite refunds, including automated processing of claims using existing system data. CBP has previously implemented refund rationalisation measures.Customs officials developed a framework to facilitate refund disbursement for items eligible under duty exemptions through the Generalised System of Preferences. Despite Congress allowing this programme to expire multiple times since the 1980s, it was subsequently renewed retroactively.Importers would input specific codes indicating GSP eligibility, even during programme inactivity. Gould suggested that the agency could similarly analyse internal data to identify IEEPA code-related tariff payments.Alternative procedures exist, though they might be complex. Legal experts indicate individual importers could be compelled to initiate separate legal proceedings to recover their funds.The authorities might require submission of protests or post-summary amendments, accompanied by comprehensive payment documentation and importer records, despite the government already possessing this information.EY’s Brown recommends importers maintain complete records from CBP’s Automated Commercial Environment platform, documenting entry dates and deadlines systematically to enhance refund possibilities.Despite potential simplified procedures by CBP, the complex nature of financial transactions within supply chains presents additional challenges.For shipments managed through commercial carriers like FedEx Corp. and United Parcel Service Inc., who handle documentation and tariff payments, CBP would direct refunds to the registered importer – the courier service rather than the goods’ owner.This arrangement could generate complications between the actual importers and courier services, creating another obstacle for businesses seeking reimbursement.

Tariff collections: Trump admin may not let go easily

Trump has valued the tariff income, declaring it has restored national wealth. He and his supporters have suggested various uses for these funds, including reducing national debt, supporting struggling agricultural sectors, and potentially distributing payment cheques to US citizens.This suggests the Trump administration will be reluctant to release these funds if the tariffs are invalidated, and they are likely to swiftly implement new levies using alternative legal frameworks should this occur. The Supreme Court is scheduled to review arguments in November regarding this matter.

The FTSE 100 closed slightly lower on Monday, below new best levels, and despite gains by gold miners as the yellow metal hit a new high.

The FTSE 100 index closed down 12.11 points, 0.1%, at 9,479.14. The blue-chip index had earlier hit a new all-time best level of 9,516.83.

The FTSE 250 ended down 97.88 points, 0.4%, at 22,099.74, and the AIM All-Share declined 0.89 of a point, 0.1%, at 795.63.

In European equities on Monday, the CAC 40 in Paris closed down 1.4%, while the DAX 40 in Frankfurt ended unchanged.

The CAC 40 tumbled after prime minister Sebastien Lecornu resigned.

President Emmanuel Macron appointed Mr Lecornu, a former defence minister, to the post last month, the third prime minister appointed since snap parliamentary elections in the summer of 024.

But the largely unchanged cabinet Mr Macron unveiled late on Sunday to work with Mr Lecornu sparked fierce criticism across the political spectrum.

Mr Lecornu’s allies in the centre-right Les Republicains indicated they could withdraw from his government because of the number of ministers planned to be included from Mr Macron’s Renaissance party.

“Lecornu was already expected to face a difficult confidence vote later this week but President Macron’s cabinet appointments, which were largely similar to the past government sealed Lecornu’s fate,” said Marc Chandler, chief market strategist at Bannockburn Capital Markets.

Barclays said Mr Lecornu’s resignation now leaves President Macron with two main options: appointing a new prime minister or dissolving the National Assembly.

Financial services took the brunt of the falls, with Societe Generale down 4.2%, BNP Paribas down 3.2%, AXA down 2.3% and Credit Agricole down 3.4%.

But losses were widespread. Car maker Renault fell 1.6%, Gucci owner Kering dipped 1.8% and retailer Carrefour declined 1.7%.

The yield on French 10-year bonds rose six basis points to 3.57%, while the euro traded lower.

The euro stood at 1.1706 dollars at the time of the London equity market close on Monday, compared with 1.1741 dollars on Friday.

Kathleen Brooks, research director at XTB said once again, France is “rudderless” politically speaking, which is also weighing on the stock market.

“While the political situation may not directly impact these companies, the fact that France’s largest and most prestigious companies are getting sold off today is a sign that investors are offloading French assets on a broad basis, and the risk is that this causes contagion elsewhere,” Ms Brooks said.

The pound was quoted slightly higher at 1.3471 dollars compared with 1.3469 dollars on Friday. Against the yen, the dollar was trading at 150.07 yen, higher compared with 147.43 yen.

Stocks in New York were mixed at the time of the London close. The Dow Jones Industrial Average was down 0.1%, the S&P 500 index was 0.3% higher and the Nasdaq Composite 0.5% to the good.

The yield on the US 10-year Treasury was quoted at 4.16%, stretched from 4.11% on Friday. The yield on the US 30-year Treasury stood at 4.76%, widened from 4.70%.

Advanced Micro Devices soared 27% after it announced a deal with OpenAi which could see the ChatGPT maker take a 10% stake over time.

Under the agreement, San Francisco-based OpenAi has agreed to purchase graphics processing units from AMD with a total power consumption of six gigawatts.

The first 1GW deployment of AMD Instinct MI450 GPUs is set to begin in the second half of 2026.

As part of the agreement, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, roughly 10% of the firm, structured to vest as specific milestones are achieved.

On London’s FTSE 100, Mondi plunged 16% as it revealed profitability dwindled in the third quarter of this year thanks mainly to softer volumes and weaker prices.

The Weybridge-based packaging firm saw its underlying earnings before interest, taxes, depreciation and amortisation drop 19% to 223 million euros for the third quarter of 2025 from 274 million euros in the second quarter, but was flat compared with the third quarter last year.

Jefferies said this was 11% below its “already cut” forecast of 250 million euros and implies 10% reductions to 2025 Ebitda forecasts.

“The profit warning was worse than we had expected,” analysts at Jefferies wrote.

A fresh surge in the gold price boosted Fresnillo, up 1.2%, and Endeavour Mining, up 2.8%.

Gold traded at 3,957.68 dollars an ounce on Monday, breaching 3,900 dollars an ounce mark for the first time, and up against 3,885.67 dollars on Friday.

The yellow metal was lifted by safe-haven demand as investors braced for a protracted US government shutdown.

Brent oil traded at 65.43 dollars a barrel on Monday, up from 64.61 dollars late on Friday, supporting BP, which rose 2.1%.

On the FTSE 250, Aston Martin hit reverse, down 10%, as it reported a lower full-year outlook for 2025, hurt by US tariff uncertainty and weakened demand.

The Warwickshire-based luxury car maker now expects total wholesale volumes for the full year to decline by mid-high single-digit percentage from 6,030 in 2024.

In addition, Aston Martin expects adjusted earnings before interest and tax “to be below the lower end of the range of market consensus … driven by the weaker volumes and pressure on the gross margin per vehicle”, the minimum estimate currently being a £110 million loss, “and no longer expects positive free cash flow generation in (the second half)”.

“Reduced 2025 expectations may clear the decks for a better 2026, but this remains a show-me story for investors,” analysts at Citi said.

The biggest risers on the FTSE 100 were Prudential, up 28.5p at 1,039.0p, Endeavour Mining, up 86.0 pence at 3,198.0p, BP, up 9.05p at 432.8p, Admiral, up 62.0p at 3,330.0p and Glencore, up 6.0p at 353.7p.

The biggest fallers on the FTSE 100 were Mondi, down 167.4p at 879.6p, Kingfisher, down 6.0p at 301.7p, BAE Systems, down 39.0p at 2,016.0p, Diageo, down 33.5p at 1,760.0p, and IMI, down 40.0p at 2,310.0p.

Tuesday’s global economic calendar has the Halifax house price index in the UK and trade figures in Canada.

Tuesday’s UK corporate calendar has full year results from veterinary services provider CVS Group, and half year numbers from fishing tackle and equipment retailer Angling Direct.

Contributed by Alliance News.

Click here to add News18 as your preferred news source on Google. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. To Get in-depth analysis, expert opinions, and real-time updates. Also Download the News18 App to stay updated.