In a major legal challenge, global shipping giant FedEx has sued the U.S. government, seeking a "full refund" of all tariffs it paid under President Trump's controversial trade policies. The move comes just days after the U.S. Supreme Court ruled that Trump overstepped his authority in unilaterally imposing sweeping tariffs on imports.
What this really means is that FedEx, along with countless other companies, are now lining up to recoup the billions of dollars in additional import duties they were forced to pay over the past year. The bigger picture here is that this lawsuit represents the first major attempt to hold the Trump administration accountable for its protectionist trade agenda, which many economists say did more harm than good for the U.S. economy.
Seeking Redress for an "Illegal" Policy
In its lawsuit filed with the U.S. Court of International Trade, FedEx argued that it "paid IEEPA duties to the United States and thus have suffered injury caused by those orders." The company is referring to the International Emergency Economic Powers Act (IEEPA), the law that Trump invoked to justify his tariffs on everything from Chinese goods to European steel and aluminum.
However, as NBC News reports, the Supreme Court found that the IEEPA did not actually grant the president such broad authority to unilaterally impose tariffs. This ruling has now opened the floodgates for companies to seek reimbursement.
A Potential Windfall for Businesses
According to CBS News, the Trump administration collected an estimated $130 billion in additional tariff revenue during its tenure. While the courts will have to sort out the legal details, this could mean a major financial windfall for businesses that were forced to pay these "illegal" duties.
As our recent analysis highlighted, Trump's protectionist trade policies were widely criticized by economists as damaging to the U.S. economy. This lawsuit represents an opportunity for businesses to claw back some of those losses, while also sending a strong message that unilateral actions outside the bounds of the law will not be tolerated.
While the legal battles are likely to drag on for some time, FedEx's bold move signals that the reckoning for Trump's trade wars may have only just begun.