U.S. states and businesses demand tariff refunds amid uncertain future

New York Governor Kathy Hochul on Tuesday called on the administration of U.S. President Donald Trump to issue $13.5 billion in tariff refunds after the U.S. Supreme Court struck down Trump's sweeping tariffs.

Based on estimates by the Yale Budget Lab, the average New York household has incurred $1,751 in added costs from tariffs since they were enacted last year, bringing the total statewide impact to $13.5 billion.

'Senseless and illegal tariffs'

"These senseless and illegal tariffs were just a tax on New York consumers, small businesses and farmers – and that's why I'm demanding a full refund," Hochul said.

Hochul joins Illinois Governor JB Pritzker and California Governor Gavin Newsom who last week called on the Republican president to issue refunds following the Supreme Court ruling.

Besides the governors, more than 1,000 U.S. companies, including global transportation and postal company FedEx and sportswear manufacturer Puma, have also filed suits to seek refunds for tariffs set by Trump last year.

Most of the lawsuits were already in process ahead of the Supreme Court decision.

Reuters reported last week that Penn Wharton Budget Model economists estimated more than $175 billion in U.S. tariff collections are subject to potential refunds.

The National Retail Federation said in a statement last Friday that the Supreme Court's ruling provided certainty for U.S. businesses and manufacturers.

"We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers," it said. "The refunds will serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers."

A study by the Federal Reserve Bank of New York found U.S. businesses and consumers are paying nearly 90 percent of the tariffs that Trump has imposed.

Expert: Likelihood of obtaining tariff refunds 'extremely low'

However, things may not turn out as expected. Liu Ying, a researcher at Chongyang Institute for Financial Studies, Renmin University of China, doubted whether consumers and businesses could receive refunds for illegal tariffs.

Consumers cannot directly obtain a tariff refund, while businesses, in theory, can apply for a refund, but in practice, they face very high barriers, long litigation periods and significant costs, Liu said, adding that the likelihood of successfully recovering the tariffs is extremely low.

Noting a large portion of the tariffs has already been passed on to consumers, Liu said it's difficult to calculate exactly how much of the tax burden businesses have shouldered.

Liu also pointed out that the Supreme Court ruling did not explicitly require refunds of the taxes already collected, meanwhile the refund procedure has been left to lower courts. This ambiguity has led to a high level of uncertainty regarding the possibility of receiving refunds, Liu said.

While the U.S. states and businesses called for a refund, the 10 percent global tariffs announced by Trump after the Supreme Court ruling came into effect on Tuesday.

The White House told Reuters that it is working to update the rate to 15 percent to reflect Trump's announcement, but it didn't say when the change might come into force.

Bernd Lange, chair of the European Parliament's international trade committee, said on Tuesday that Trump's latest tariffs has the terms of its trade deal with the European Union and the bloc is ready to retaliate if necessary, in an interview with CNBC.

"We wanted to have really stability and predictability. And unfortunately, the government, the president of the United States, has really made a breach of this deal several times," Lange told CNBC.

(With input from agencies)