The Russian oil tariffs refund provision has raised cautious optimism among exporters. Significant financial impact accompanied a quiet announcement regarding the flexibility of tariffs in Washington after more than a month of uncertain tariff rates. India’s exporters were looking for any information related to this policy change with great anticipation. Initially, there were punitive tariffs assessed on goods shipped through the transition period, but now limited refunds may be available.
This is after an executive order was issued authorizing the removal of tariffs; however, the timing and extent of the removal of tariffs are still unclear. The change has significant implications in regard to geopolitical factors in the energy arena and trade diplomacy. It is also demonstrative of the ongoing effort to make the transition as painless as possible. The government has characterized these changes as procedural only.
Exporters interpreted this as an indication that Washington has given them something to be optimistic about. The announcement was made concurrently with broader trade negotiations occurring with the United States, and tariff adjustments formed one of the largest components of these negotiations.
Refund claims will take time, attention, and diligence to ensure that an exporter has properly understood all details of the Executive Order. Ultimately, the far-reaching impact of the refund claim process will exceed the overall benefit of the adjustment itself.
What the US executive order says on tariff refunds
The Trump administration eliminated the additional 25% tax that was charged with respect to certain Indian made products coming into the US market. The executive order takes effect as of February 7, 2019. This action provides for only future imports and was not intended to provide a refund to those who may have paid duty on products imported before February 7, but only for certain cases where duty was wrongfully assessed to products imported after February 7.
In fact, “the refund covers a very small number of specific goods or transactions where the duty would have already been paid before the operation of the order. This represents a kind of transitional provision.” Also referenced in the executive order were legal procedures by the US Customs and Border Protection for processing inquiries related to duties. Again, “while this action provides a future refund based upon the provisions of the law, it does not provide past refunds” and “to the extent that this order is implemented in whole or in part, any refunds for duty paid to US customs will be processed based upon applicable law and the standard procedures of US CBP.” The amount can be paid as a refund remains to be determined at this time.
Why exporters seek clarity on Russian oil tariffs
Significant financial impact accompanied a quiet announcement regarding the flexibility of tariffs in Washington after more than a month of uncertain tariff rates. India’s exporters were looking for any information related to this policy change with great anticipation. Initially, there were punitive tariffs assessed on goods shipped through the transition period, but now limited refunds may be available.
This is after an executive order was issued authorizing the removal of tariffs; however, the timing and extent of the removal of tariffs are still unclear. The change has significant implications in regard to geopolitical factors in the energy arena and trade diplomacy.
It is also demonstrative of the ongoing effort to make the transition as painless as possible. The government has characterized these changes as procedural only. Exporters interpreted this as an indication that Washington has given them something to be optimistic about.
The announcement was made concurrently with broader trade negotiations occurring with the United States, and tariff adjustments formed one of the largest components of these negotiations. Refund claims will take time, attention, and diligence to ensure that an exporter has properly understood all details of the Executive Order. Ultimately, the far-reaching impact of the refund claim process will exceed the overall benefit of the adjustment itself. Ultimately, the Russian oil tariffs refund may ease tensions, but uncertainty remains over implementation.
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