In five days, on April 20, Eastern Time, the largest tariff refund in U.S. history will be officially launched.
US$166 billion, equivalent to 1.13 trillion yuan, a huge sum equivalent to 80% of Vietnam’s annual GDP, will be returned to 330,000 importers around the world in the next few months, covering 53 million customs declaration records.
Many people may think that this is the United States’ own business and has nothing to do with us.
But you are wrong.
A considerable part of this money will eventually flow into the pockets of Chinese foreign traders, and it will even affect the lives of ordinary people like you and me.
First understand: Why does the United States suddenly want to “spend money”?
This is not an outpouring of kindness from the United States, but forced by its own Supreme Court.
Things will start in 2025.
After Trump came back to power, in order to fulfill his campaign promises, he bypassed Congress and directly invoked the International Emergency Economic Powers Act (IEEPA) to impose high tariffs on imported goods from almost all countries in the world, with tax rates ranging from 10% to 50%.
Affected imports account for more than 80% of total U.S. imports.
This will put the domestic importers in the United States into a terrible trap.
Because tariffs are collected from importers, not from exporting countries.
In other words, when Chinese companies sell goods to U.S. companies, when the goods arrive at U.S. ports, the U.S. companies pay the tariffs and then pass the costs on to U.S. consumers.
Over the past year or so, these U.S. importers have been squeezed by high tariffs.
Profits have been eroded, orders are afraid to be accepted, and many companies are even on the verge of bankruptcy.
As a result, more than 330,000 importers united and took the US government to court.
The lawsuit went all the way to the U.S. Supreme Court.
On February 20 this year, the Supreme Court made a final ruling with a 6:3 vote: the Trump administration’s imposition of global tariffs in accordance with the International Emergency Economic Powers Act was an ultra vires operation because the Constitution clearly stipulates that the power to tax is exclusive to Congress.
In other words, these tariffs were illegal from the start.
On March 4, the U.S. Court of International Trade followed up its judgment and required the U.S. Customs and Border Protection to fully refund all illegally imposed duties, plus interest.
That’s why this huge refund of 1.13 trillion yuan came into being.
Latest progress: 56,000 companies have “jumped the gun”.
According to the latest announcement from the U.S. Customs on April 14, the CAPE system specifically designed to handle this large-scale refund has been basically completed and will be officially launched on April 20.
Refunds will all be issued by electronic transfer, replacing the past manual processing model one by one, greatly improving efficiency.
After approval, funds will generally arrive within 6 – 8 weeks.
As of April 9, five days before the announcement, 56,497 importers had completed the registration and filing of the electronic refund process in advance, involving a refund amount of up to 127 billion US dollars, approximately 866 billion yuan.
This means that many companies with a keen sense of smell have already started taking action.
And those companies that are still waiting and watching are likely to miss the first wave of dividends.
It should be noted that this refund is only for tariffs paid according to IEEPA from February 2025 to February 2026.
Moreover, refunds can only be refunded to importers registered with U.S. Customs, and Chinese export companies cannot apply directly.
In addition, on the day of the Supreme Court ruling, Trump re-imposed a 10% global temporary tariff based on Article 122 of the Trade Act of 1974, which is valid for 150 days.
At the same time, other tariffs targeting China such as Section 301 tariffs and steel and aluminum tariffs are still in effect.
Here comes the key point: Which industries in China will benefit the most?
Many people will ask: The refund is given to the American importer. What does it have to do with Chinese companies?
It’s a big deal.
U.S. companies that import goods from China have not only reduced their profits due to high tariffs over the past year or so, but also reduced purchases from China and even defaulted on payments to many Chinese suppliers.
Now that they suddenly get millions, tens of millions or even hundreds of millions of dollars in refunds, what is their first move?
I must have paid the arrears first, then placed the postponed orders, and restored the axed purchasing plan.
Moreover, in order to compete for market share, they will definitely negotiate with Chinese suppliers to share this tax rebate dividend, appropriately reduce product prices, and improve competitiveness.
According to data from the General Administration of Customs and several industry associations, the following three industries will be the biggest beneficiaries of this tariff refund:
Category 1: Electromechanical and consumer electronics industries.
Mechanical and electrical products have always been the largest category of China’s exports to the United States, accounting for more than 40%.
Among them, products such as smartphones, tablets, smart homes, and auto parts are most affected by IEEPA tariffs.
In the past, these products were generally subject to additional tariffs of 10% to 25%, which significantly weakened the price advantage of Chinese products in the U.S. market.
Now that these tariffs have been canceled and refunded, the cost-effectiveness advantage of Chinese products will reappear.
Many electronics export companies in Zhejiang, Guangdong and other places said that within a week after the policy was released, they had received multiple additional order inquiries from US customers.
The person in charge of some companies revealed that they originally planned to reduce their production capacity in the United States in the second half of this year, but now they have begun to consider recruiting more workers to cope with the possible incoming wave of orders.
Category 2: Textile, clothing and light industry daily necessities industry.
Textiles, clothing, furniture, toys, luggage and other light industrial daily necessities are China’s traditional export advantageous industries, and they are also the industries most affected by tariffs.
The profit margins of these industries are already relatively low. According to data from the China National Garment Association, the average profit margin of the entire textile and apparel industry in 2025 is only 3.5%.
In the past, the 25% tariff almost ate up all their profits.
In order to survive, many small and medium-sized enterprises have to lay off employees, reduce production, or even close down.
This tariff refund is tantamount to a timely rain for these industries.
After receiving refunds, U.S. importers will restock a large amount of inventory. It is expected that in the second and third quarters of this year, export orders for textiles, clothing, and light industrial daily necessities to the United States will rebound significantly.
Category 3: Auto parts industry.
Auto parts are one of the important categories of China’s exports to the United States, with exports exceeding US$30 billion in 2025.
In the past year, due to the impact of IEEPA tariffs, China’s auto parts exports to the United States fell by more than 15% year-on-year.
Now that tariffs are removed and refunded, the price competitiveness of Chinese auto parts will be greatly improved.
At the same time, domestic American automakers will also increase procurement from China to reduce production costs.
According to predictions from the China Association of Automobile Manufacturers, China’s auto parts exports to the United States will resume positive growth in the second half of this year, and the full-year export volume is expected to reach US$35 billion.
What impact will it have on ordinary consumers?
Some people may say that I am not engaged in foreign trade and this matter has nothing to do with me.
In fact, it will also indirectly affect our lives.
First of all, the recovery of the foreign trade industry will drive employment in related industries.
If the factory has more orders, it will naturally recruit more workers and their wages will also increase.
This is good news for many people working in the manufacturing industry.
Secondly, as costs for U.S. importers decline, the prices of some goods imported from China will decrease in the U.S. market.
This is a good thing for people who often shop overseas.
Finally, the phased relaxation of Sino-US trade relations will inject confidence into the global economic recovery.
When the economic environment improves, everyone’s life will be easier.
Opportunities always come to those who are prepared.
This 1.13 trillion yuan tariff refund is the biggest benefit that China’s foreign trade industry has received since the Sino-US trade friction.
But it’s not pie in the sky, and not everyone can get a piece of it.
For Chinese foreign trade companies, the most important thing now is to proactively contact your American customers to understand their tax refund progress, negotiate how to share tax refund dividends, and strive for more orders.
At the same time, we must also pay attention to preventing risks, not blindly expand production capacity, and reasonably arrange production according to market demand.
In addition, we must also clearly realize that this refund is only the result of judicial correction and does not represent the end of Sino-US trade friction.
The Trump administration is still advancing trade restrictions against China, and the general trend of supply chain transfer has not changed.
We live in an interconnected world. Only by keeping an eye on the outside world and understanding the latest policies and trends can we seize opportunities and avoid risks.
So, which industries do you think this tariff refund will have an impact on?
