When Joseph Landau launched his kitchenware import business in 2020, he didn’t expect to become entangled in one of the most complex trade disputes in U.S. history. The New Jersey entrepreneur now finds himself among thousands of small business owners caught in bureaucratic limbo, waiting for tariff refunds that could determine their financial survival.
“We paid over $180,000 in Section 301 tariffs that the courts have ruled were improperly collected,” Landau told me during a recent interview. “That money would let us hire two more employees and expand our product line. Instead, it’s sitting in government coffers while we struggle to grow.”
The saga began in 2018 when the Trump administration imposed substantial tariffs on Chinese imports under Section 301 of the Trade Act, citing unfair trade practices. What seemed like a straightforward policy decision has evolved into a protracted legal battle with billions of dollars at stake.
In April 2022, the U.S. Court of International Trade ruled that many of these tariffs were implemented improperly, opening the door for potential refunds. Yet more than two years later, small business owners report encountering a Byzantine process of delays, technical rejections, and administrative hurdles.
According to data from the International Trade Administration, approximately 45,000 small and medium businesses that import from China were affected by these tariffs. The American Small Business League estimates the potential refund value exceeds $14 billion for smaller enterprises alone.
The Treasury Department has processed only about 8% of legitimate refund claims, according to internal documents obtained through a Freedom of Information Act request by the National Federation of Independent Business.
Michelle Rodriguez, who runs a small electronics distribution company in Arizona, describes the refund process as “designed to make you give up.” After filing her claim in June 2022, she received three technical rejections before finally getting her application accepted nine months later. She’s still waiting for the $63,000 refund.
“Every time I call, I get a different answer about the status,” Rodriguez said. “Meanwhile, that money could be helping me compete against bigger companies that have the resources to navigate this mess.”
The situation highlights a critical disconnect between trade policy implementation and its real-world impact on small businesses. Large corporations often have dedicated legal teams and trade compliance departments to manage tariff issues, while smaller enterprises must divert precious resources from operations to regulatory compliance.
Economic research from the Federal Reserve Bank of New York suggests these tariffs created a disproportionate burden on smaller businesses. Their analysis indicates that for every percentage point increase in tariff rates, large businesses saw cost increases of 0.3%, while small businesses experienced increases of 0.7% due to lower bargaining power with suppliers and inability to quickly adjust supply chains.
Commerce Department officials have acknowledged the backlog but point to limited staffing and the complex nature of validating claims. “We’re processing applications as quickly as resources allow,” said Thomas Barker, Deputy Assistant Secretary for Trade Administration, in a statement to Epochedge.com. “Each claim requires careful review to ensure compliance with all applicable laws and regulations.”
Industry advocates counter that the government created this situation and should expedite solutions. “When the courts ruled these tariffs were improperly applied, the government should have implemented a streamlined refund process,” said Sarah Thorn, trade policy director at the National Retail Federation. “Instead, we’re seeing what appears to be administrative foot-dragging.”
The political dimensions cannot be ignored. With the 2024 election approaching, the current administration faces competing pressures. Releasing billions in refunds could be seen as undermining a tough-on-China stance, while continuing to withhold legally mandated refunds puts financial pressure on thousands of small business voters.
For entrepreneurs like Marcus Chen, who imports educational toys in California, the situation feels personal. “I’m not asking for a handout,” he explained during our conversation. “This is money that should never have been collected in the first place, according to the courts. Every day they hold onto it is another day my business can’t reach its potential.”
The refund delays also create competitive imbalances. Lauren Greenfield, an economist at Georgetown University who studies small business impacts, notes that “businesses operating on thin margins with these outstanding refunds are at a significant competitive disadvantage compared to their larger counterparts who can better absorb these costs.”
While the legal battle continues, business owners are left wondering when—or if—they’ll see their money. A recent ruling from the Federal Circuit Court appears to strengthen their case, but the timeline remains uncertain.
As Washington debates broader trade policies, the experience of these small business owners serves as a reminder that abstract trade disputes have concrete consequences for entrepreneurs across America. Their stories highlight how even well-intentioned policies can create unintended casualties when implementation fails to consider the realities of small business operations.
For now, Joseph Landau and thousands like him continue checking their mail for refund checks that represent not just money, but opportunity. “Every day that passes is another day we can’t use those funds to grow our business,” he said. “And in today’s economy, standing still means falling behind.”
