Tariff Refund Strategies Demand Documentation First, Legal Expert Warns CFOs

Companies seeking U.S. tariff refunds must document, decide, then announce their allocation strategy, according to Terence Lau, dean of Syracuse University's law school. The current practice — announcing first, documenting last — creates legal exposure, he said. The core problem is a structural mismatch: refunds follow the customs entry, not the economic burden. The importer of record is frequently not the party that absorbed the cost, which may have been passed down three or four links in the supply chain. Buyers with no relationship to Customs have only contractual claims against counterparties. Lau identified "unjust enrichment" claims as a growing risk. Separately itemized tariff surcharges present the strongest case for refund sharing; embedded price increases — where freight, labor and currency also moved — are far harder to defend. He cited pending class actions, including one against Costco, where executive remarks on earnings calls became litigation evidence. "An earnings call is a voluntary deposition," Lau said. He advised CFOs to describe actions taken, not future intentions, since "intentions get read as promises."