Chinese rare-earth project in Laos stumbles as industry rakes in profits

A substantial wave of US tariff refunds is flowing back to Chinese firms, injecting millions into their profits. Over US$38 million in rebates and accrued interest from US Customs and Border Protection (CBP) has been funneled into the accounts of five listed Chinese entities, primarily those in the automotive and healthcare industries.

Each company received an average refund of US$7.64 million, representing between 13.12% and 53.58% of their projected 2025 net profit. Zhejiang-based Huahai Pharmaceutical, a top beneficiary, received more than US$14.2 million, equivalent to 36.36% of its 2025 full-year net profit.

This influx of funds is expected to bolster earnings and bolster the financial capacity of Chinese importers to restock products. Analysts believe these refunds will boost US importers' appetite for restocking and curb price negotiations, ultimately benefiting Chinese original equipment manufacturers (OEMs). As of July, the CBP had disbursed a total of US$100 billion in tariff refunds, representing roughly 60% of the over US$166 billion in tariff revenue collected by the US federal government through the Trump administration's tariffs, which were deemed unconstitutional by the Supreme Court.

Despite the potential stimulus, the rebates are unlikely to translate into immediate savings for US consumers, according to a KPMG survey. The surge in refunds is reducing US federal fiscal revenue, with the Treasury reporting a negative net customs revenue of US$25.56 billion in June, offsetting the US$21.93 billion in tariff collections for that month.

Economists warn that the fiscal strain from these rebates could push the US deficit ratio up by 0.3 percentage points, prompting speculation that the Trump administration may introduce further tariff measures to address the revenue shortfall.