A conga line of Australian companies – from miners to food producers – are risking the wrath of the mercurial and vendetta-driven president Donald Trump by taking legal action in the US to claw back refunds for tariffs that were imposed illegally by the US government.
Australian mining giant Rio Tinto is at the front of the line of Australian companies that have staked their claim for redress in the US Court of International Trade, looking for refunds on tariffs paid under Trump’s executive order which relied on using the International Emergency Economics Powers Act (IEEPA).
It is running the legal gauntlet at the same time as Rio is seeking crucial support from the US for a massive copper mine in Arizona.
The list of Australian companies now taking legal action alongside Rio includes oil and gas producer Santos, and appliance manufacturer Breville whose largest shareholder Solomon Lew has engaged in successful business deals with Trump before he became president.
Add to the list fertiliser suppliers Nufarm and Incitec Pivot explosives maker Orica and food and beverage group, SPC.
The US Supreme Court ruled in February that tariffs imposed under this Act were unlawful, which has opened the floodgates to hundreds of companies to seek refunds. The US had collected $US129 billion in tariffs from Trump’s Liberation Day in April last year to December last year.
In Rio’s statement of claim, which has been seen by this masthead, the miner says it had standing to bring this lawsuit “because they [Rio subsidiaries] are the importers of record for goods imported into the United States that were subject to the IEEPA Tariffs … that have been held unlawful by the Supreme Court”.
“As a result of the IEEPA Executive Orders (EOs) that were held unlawful by the Supreme Court, Plaintiffs have paid IEEPA Tariffs to the United States and have accordingly suffered injuries caused by the IEEPA EOs.”
Companies have been paying these tariffs for the best part of a year and at varying rates, given Trump’s executive orders varied the rates levied several times based on negotiations with particular countries like China and Canada.
Rio Tinto paid $1.4 billion last year in additional trade levies, but only a fraction of this will form part of its clawback claim. The lion’s share of the levies paid were by its Canadian aluminium operations exporting to the US, which were not imposed using IEEP Act and remain legal.
Rather, Rio Tinto is seeking to recover tariffs paid by its US subsidiaries on imported goods.
Rebate claims by smaller Australian companies would go unnoticed by Trump, but companies like Rio Tinto, which are better known to the government, have a higher risk of catching the president’s attention.
But it is the company’s timing of its legal complaint that’s important – given it was initiated in the days after it formalised a land swap that assists in paving the way for it to develop the Resolution Copper project in Arizona, which is jointly owned with BHP.
Political support from the Trump administration has been critical in progressing the Resolution project, according to reports in the Australian Financial Review, which says the project suffered bureaucratic delays under the Biden administration.
Resolution could also be in line for US federal funding support or subsidies at a time when the Trump regime is promising to boost domestic production of critical metals.
The US government has described Resolution as an important project in advancing President Trump’s goal of mineral independence and energy dominance by boosting domestic mineral production.
There is a hope that, given the volume of companies seeking a US customs refund, the cases will be grouped together in a move that will reduce legal fees and provide some cover for individual companies seeking to remain under Trump’s radar.
US legal experts suggest it is important for companies looking for refunds to file now to preserve their rights. “The absence of a defined refund mechanism, combined with strict statutory time limits and the likelihood of robust government defences, makes early action essential,” according to US lawyers, Brownstein Hyatt Farber Schreck.
So there may be more Australian companies joining the conga line.
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