Wilbur Ross was Trump’s first-term tariff hawk. Now he says refunds give importers ‘an extra profit’ and pay them ‘more than the money’ they laid out

When Wilbur Ross served as the head of the Commerce Department in the early days of President Donald Trump's tenure, one of his main objectives was to reduce the trade deficit. However, seven years later, Ross claims President Trump is employing tariffs for different reasons, and that the refunds from the tariffs that were overturned by the Supreme Court are being given to the wrong recipients.

Ross stated that Trump's approach to tariffs in his second term is "a whole different conceptual approach." He explained that importers bear the cost of tariffs at the border and can either absorb it or pass it on to consumers. Most of the time, the cost is ultimately passed onto shoppers, with Federal Reserve data indicating that Americans paid around 90% of the cost during Trump's second term.

In February 2018, Ross concluded that imported steel and aluminum threatened national security and informed Trump of his findings. On March 8, Trump implemented a 25% tariff on imported steel and a 10% tariff on aluminum, later granting and revoking exemptions for individual countries. Ross emphasized that his role was to work on fixing the trade balance and achieving a more balanced trade situation.

In his second term, Trump used a different law, the International Emergency Economic Powers Act, which grants the president broad power over trade during a declared emergency. He applied this to tariffs on numerous trading partners and duties on Brazilian imports linked to various goals beyond trade. Ross contended that Trump had more power in his second term compared to his first because he controlled both the Congress and the Republican Party.

Despite this, Ross stressed that it is ultimately a presidential decision to expand the use of tariffs. He acknowledged that the government owes importers approximately $166 billion in refunds following the Supreme Court's ruling that consumers would be the primary losers. However, Ross expressed doubts about whether the right people are receiving these refunds.

Ross questioned if those who paid the tariff are being given more money than they originally paid, stating, "I’m the one who wrote the check for the tariff. Why should I get more than the money that I laid out?" Companies have differing opinions on how to handle the refunds. Some, like UPS and FedEx, pledged to return their refunds to customers, while others, such as Amazon, which received about $640 million in refunds, may only pay back select customers.

A class-action lawsuit was filed against Amazon in May, and the company's finance chief claimed that Amazon absorbed most of the tariff costs instead of passing them on to customers.

In Ross's opinion, if an importer passes on part of the cost to customers, they are benefiting from an additional profit due to the tariffs, which he considers "conceptually flawed."