Discussion
Nintendo Sues U.S. Government For Tariff Refunds
loeg: Why is this in particular more notable than the other thousands of companies suing for tariff relief? (In particular, V.O.S. Selections.)
mschuster91: Nintendo has big fucking money. And it‘s a household name.Say, they get pissed off too much… they could run campaigns just days before the election if they wanted.
joe_mamba: So if they win, the US taxpayer will pay for it?
tapoxi: The administration already lost and the tariffs were found to be illegal, this is Nintendo wanting their money back.Taxpayers already paid for it, companies raised their prices to compensate.
yibers: So hold on. The US taxpayer first paid the tariffs themselves. Next he has to pay compensation for the tariffs he himself paid?
barbazoo: I'm assuming the importer which paid the tariff would be the one trying to get the money back, is that the case here for Nintendo are they the importer here?
DDayMace: Wow a Nintendo lawsuit that doesn't bother me ;-)
jasoneckert: Certain companies are well-known for their legal teams. Qualcomm is one (often described as a legal company that employs some engineers). Nintendo is the other.As a result, Nintendo's legal team is far more likely to ensure they get refunded, and quickly. They could provide a template for others to follow.
rectang: Hmm, I would have thought of Oracle first.
tantalic: If they win, the US government collected taxes they shouldn't and those would be returned. Saying the "US taxpayer will pay for it" is equivalent to saying the US taxpayer pays for your tax refund. (And also, Nintendo is a "US taxpayer.")
datahack: That’s the kind of righteous sarcasm you can build a community on.Take my upvote.
happytoexplain: I've never heard of V.O.S. Selections.
loeg: https://www.scotusblog.com/cases/case-files/trump-v-v-o-s-se...
happytoexplain: Thanks, but I was answering your question by anecdote, not asking for clarification. To be clear: I'm implying an opinion that Nintendo has more name recognition than V.O.S. Selections, not that their suit is otherwise more significant.
akudha: Can someone ELI5 how this would work? Is it possible to accurately calculate the amount, with the tariff percentages changing on a weekly basis? If companies do get refunds, do they just keep it? After all, it was the end user who paid/pays, isn’t it?Also, do/will these companies drop prices if/when tariffs are reversed?
skybrian: The company that paid the tax gets their money back. Whether they decide to make any refunds to their customers is up to them. A few companies have said they would.This is no different from any other cost. Their cost of goods is lower in retrospect than they thought it was, so it will show up as a gain on their income statement.What's the economic effect, though? One way to model a tariff that's later refunded is that it's sort of like if a cartel colluded to temporarily keep prices higher. Competition between firms often keeps prices close to costs, but this wouldn't be true for a monopoly or a cartel.
shagie: Most of the money that Nintendo paid and is entitled to have be returned to them has not gone into the government's coffers.The money that has passed various deadlines may be more difficult to return, however it is still money that is due to Nintendo. That may be more difficult to obtain, but it isn't the government's money in the first place.US tax payers aren't paying money to Nintendo - they're paying for the government's lawyers to try to argue against not paying back illegally collected tariffs.https://realeconomy.rsmus.com/ieepa-tariffs-struck-down-what...
SpicyLemonZest: The way that tariffs work is, some specific person (often a corporate person) performs the act of importation into the United States, and that person is charged an amount which they need to pay before they're allowed to take their goods from the warehouse. In this case Nintendo is that person, and both they and the government presumably have records of what they paid.Whether some downstream consumer of those imported goods paid a price that would have been lower if not for the tariff is a commercial question between them and whoever they paid. Maybe they would have, maybe they wouldn't have. There isn't any objective way to calculate what the price of suchandsuch Nintendo product would have been in the counterfactual.
mothballed: Yes but the sleight of hand here is to just simply say "taxpayer."The taxpayer that paid the tariff was the consumer. The fact Nintendo actually wrote the check is largely accounting, this was passed on to the consumer.The taxpayer that receives the refund is Nintendo, straight into their profits.So the taxpayer paying and the taxpayer receiving are totally different. This is basically like regressive welfare where consumer paid a private but government imposed tax to corporations.
ndiddy: Yeah the Switch 2 (launched after Liberation Day) costs $449 in the US and 49,980 yen (~$316) in Japan. I doubt Nintendo will be lowering the price of the console outside Japan anytime soon.
dafelst: Trump is too useful to Ellison right now, he isn't going to derail that gravy train over a few tens of millions of dollars.
mothballed: The smartest comment I've seen was a proposal to use a negative tariff until the refunds are offset. At least in that case there is some bit of chance that the consumer gets their money back since the supply curve should shift up lowering apparent prices until the negative tax fades off. I'm sure many will point out all the flaws with that and the fact some of it will be captured as profit anyway, but it seems better than dumping 100% of it to profit which is what happens if you just refund to the importer of record.
czzr: Essentially yes. Companies paid the tariff costs, largely passed this on to consumers via higher prices, and now companies are due the tariff costs back. Consumers of course won’t get anything back.Well done America.
bena: You'd have receipts.Every shipment from overseas would essentially have a line item for tariffs due. Just add them up.
computer23: Please stop using Scribd, which paywalls public documents.Here's the Courtlistener docket: https://www.courtlistener.com/docket/72373888/nintendo-of-am...
DSMan195276: In this case because Nintendo has an American branch (Nintendo of America) that imports their goods, Nintendo of America is who paid the tariffs and would get a refund. Consumers only paid indirectly via potential price increases, so no they don't get any potential money back.
bluGill: Any large company puts all their records in an accounting system so they can figure this out. It make take some time to run the right query, but they have the records. Of course this assumes they put the full breakdown in the system, if it is just the total cost of goods including shipping as a single line item they can't do this - but commonly they will have the break down in some system. (at the very least the shippers/importer will - and they have incentive to run this for you and give you the results - it is fairly cheap and generates goodwill)
hermanzegerman: You mean reimburse the money he wasn't entitled to at any time?
johnnyanmac: The consumer did pay for it (not "taxpayers", per se) . Tarriffs went up, prices surged, and consumers paid that. Now companies get a refund and probably won't lower prices unless they feel there was extremely adverse effects.I don't see how the consumer won in any of this.
hermanzegerman: It's completely irrelevant if the consumer won in any of this.It's about if the United States is a country that respects the rule of law, or some failed 3rd world state, where the law is only respected if the dear leader likes it.The first one is much better for economic development
johnnyanmac: In the lawsuit, no.But this will only further build up the low trust society when it feels like consumers only lose and never gains any of society's benefits.
SR2Z: I don't think that would be a good idea for two reasons:1. Trump could decide what to apply the negative tariff to (e.g. Trump merchandise or his buddies)2. If there's a fixed amount of money to dole out and suppliers know it, approximately zero dollars will be given back to consumers because it will be easy to capture the money on the importer side.
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