Key takeaways

• The scale of lawsuits to recover tariff refunds is expected to be significant and could take years to resolve.
• Ongoing tariff disputes are likely to lead to new court battles and a complicated recovery process for companies.
• There is a high likelihood of tariff refunds, and the process is not expected to take long.
• Legal experts are certain that refunds related to tariffs will occur, based on their analysis of the situation.
• Over 2,000 cases challenging tariff refunds are currently before the Court of International Trade.
• The outcome of tariff refund cases is expected to be known quickly due to the court’s procedural timeline.
• The US, UK, and Hong Kong are unique in allowing nonresident importers, impacting global trade dynamics.
• Changes in tariff payment structures have created a massive incentive for fraud in import practices.
• Importers must classify their products correctly according to a harmonized schedule code to determine tariff rates.
• Manufacturing is increasingly shifting towards Southeast Asia and Latin America, reflecting global economic trends.
• The legal industry is poised for significant activity due to the scale of tariff-related lawsuits.
• The geopolitical landscape is influencing shifts in global supply chains, with Southeast Asia and Latin America emerging as key players.

Guest intro

Ryan Petersen is Founder and CEO of Flexport, a technology-driven freight forwarding and supply chain management company. Prior to Flexport, he founded and led ImportGenius, a premier provider of transaction data for the global trade industry. Flexport has helped over 10,000 companies move more than $175 billion in merchandise while navigating tariffs and trade disruptions.

The scale of tariff-related lawsuits

• The scale of the suits to recover it is gonna be quote the same level is at its bestest levels which famously was you know multiple decades of lawsuits

  — Ryan Petersen

• Tariff-related lawsuits are expected to be extensive and prolonged, impacting the legal industry significantly.
• Historical context of tariff lawsuits suggests a long-term impact on businesses and legal proceedings.
• Companies involved in international trade need to prepare for potential legal battles over tariff refunds.
• The complexity of tariff disputes may require specialized legal expertise to navigate effectively.
• Businesses should anticipate significant legal costs associated with pursuing tariff refunds.
• The outcome of these lawsuits could set important precedents for future trade policies.

• There’s new tariffs already and they’re like the Trump administration after losing one tariffs they’re like putting in a different one that’s probably gonna have court fights etcetera

  — Ryan Petersen

• The legal landscape surrounding tariffs is likely to remain volatile and contentious for the foreseeable future.

Predicting tariff refund outcomes

• I think I have a very high degree of certainty like bordering uncertainty conviction bordering uncertainty that there will be refunds and I don’t think it’s gonna take that long.

  — Ryan Petersen

• There is a strong consensus among legal experts that tariff refunds will be issued.
• The process for obtaining refunds is expected to be relatively swift, providing relief to affected companies.
• Businesses should monitor developments closely to understand the timeline for receiving refunds.
• Legal opinions suggest a high likelihood of favorable outcomes for companies seeking tariff refunds.
• The certainty expressed by legal experts provides a basis for companies to plan their financial strategies.

• I’ve talked to three different international trade attorneys who all told me a 100% certainty that there would be refunds and I’ve never heard a lawyer say a 100% certainty of anything before in my whole life.

  — Ryan Petersen

• Companies should engage with legal counsel to ensure they are prepared to navigate the refund process.

Court of International Trade’s role

• Currently there are over 2,000 cases before the courts before the court challenging iepaa sorry requesting refunds in fact it’s challenging that they should get a refund

  — Ryan Petersen

• The Court of International Trade is handling a substantial number of cases related to tariff refunds.
• The court’s timeline suggests that decisions on these cases will be made relatively quickly.
• Businesses involved in these cases should prepare for potential outcomes and their implications.
• The court’s rulings could have significant ramifications for future trade policies and practices.
• Companies should stay informed about the progress of these cases to anticipate any changes in their legal standing.

• The court of international trade has only thirty days from February 20… to make a ruling of what happens next so I think we’re gonna know pretty quick how the refunds… will be

  — Ryan Petersen

• The expedited timeline for court decisions underscores the importance of timely legal preparation.

Impact of nonresident importers

• The only places in the world that allow nonresident importers so it’s a foreign importer of record until April that was about 9% of US trade since April it went to 20%

  — Ryan Petersen

• The US, UK, and Hong Kong’s allowance for nonresident importers distinguishes them in global trade.
• This regulatory distinction has significant implications for trade practices and market behavior.
• The increase in nonresident importers’ share of US trade reflects broader shifts in global trade dynamics.
• Companies should consider the impact of nonresident importers on their supply chain strategies.
• The unique regulatory environment may present both opportunities and challenges for businesses.
• Understanding the role of nonresident importers is crucial for navigating international trade effectively.
• The policy could influence competitive dynamics in the global market, affecting pricing and sourcing strategies.

Incentives for fraud in tariff payments

• What changed was a massive incentive to commit fraud and if you’re a US company that was buying goods from overseas you have to pay the tariffs right… if instead you say hey I’m just gonna buy the goods in the United States from my factory and they’ll take care of the tariffs and that foreign company can just undervalue the goods

  — Ryan Petersen

• Changes in tariff payment structures have created incentives for fraudulent practices in imports.
• Companies may attempt to exploit loopholes in tariff regulations to minimize costs.
• The potential for fraud underscores the need for robust compliance measures in international trade.
• Businesses should be vigilant in monitoring their supply chains to prevent fraudulent activities.
• Regulatory authorities may increase scrutiny of import practices to address potential fraud.
• Understanding the mechanics of tariff payments is essential for maintaining legal compliance.
• Companies should consider the reputational risks associated with engaging in or being linked to fraudulent practices.

Importance of harmonized schedule codes

• Each product has one and only one harmonized classification we call it harmonized schedule code… it’s illegal to choose your classification based on duty rate… it’s a very difficult and it but it’s illegal to choose your classification based on duty rate you know you gotta choose it based on what’s correct.

  — Ryan Petersen

• Correct classification of products according to harmonized schedule codes is crucial for determining tariff rates.
• Misclassification can lead to legal penalties and increased costs for importers.
• Companies must ensure accurate classification to comply with international trade regulations.
• Understanding the harmonized schedule code system is essential for navigating tariff-related complexities.
• Businesses should invest in training and resources to ensure compliance with classification requirements.
• The legal and procedural complexities of tariff classification highlight the need for specialized expertise.
• Accurate classification can impact a company’s competitive position by affecting pricing and cost structures.

Shifts in global manufacturing

• For sure lots of manufacturing has been moving towards Southeast Asia and Latin America are kind of the two big winners.

  — Ryan Petersen

• Manufacturing is increasingly moving towards Southeast Asia and Latin America due to various geopolitical and economic factors.
• This shift reflects broader trends in global supply chains and market dynamics.
• Companies should consider the implications of these shifts for their sourcing and production strategies.
• The movement of manufacturing to these regions may affect global trade patterns and competitive dynamics.
• Businesses need to adapt to changing supply chain landscapes to remain competitive.
• Understanding the drivers of these shifts can help companies anticipate future trends in global manufacturing.
• The emergence of Southeast Asia and Latin America as manufacturing hubs presents both opportunities and challenges for businesses.