B (2:29)

And you deal with a special kind of product, importing a special kind of product.

C (2:34)

Yes. So the vast majority of our business revolves around fresh and frozen seafood products.

B (2:41)

And seafood gets expensive, right? I mean, like, let's say like a really premium seafood item. I don't know, like a shipping container full of lobster tails. That's how much, roughly?

C (2:50)

Oh, absolutely. A shipping container of lobster tails could be anywhere 4 to $500,000. So really, premium products, whether it be lobster tails or Chilean sea bass, is another very expensive product. But so those premium products can definitely be in the hundreds of thousands of dollars per container. The average cost, I would say, though, of other. Let's say cheaper products like salmon or shrimp, etcetera, are more around between 100 to $200,000 per container.

B (3:21)

And so you've been dealing with a lot of tariffs since Liberation Day in April. I imagine you've been watching the news pretty carefully for the Supreme Court decision. How did you learn about it today?

C (3:36)

Well, today was an interesting manner because in the last few weeks, I've chosen to have a little bit of fun with this.

B (3:43)

Okay.

C (3:44)

In this business, it's kind of stressful, of course, with everything going on. So I've set up some alerts, both on my computer and on my phone, that they go through, and they automate a process where they read an RSS feed. And so those come directly from the Supreme Court, they come from the White House, from Trump's truth, social, etc. And so I. Early this morning, it was right after 10am I remember specifically was that I had, if anyone's seen the movie Judge Dredd with Sylvester Stallone, I had a sound bite pop up on my phone saying, I am the law. As soon as the Supreme Court published the news and their opinion on the

B (4:26)

matter, what went through your head when you heard Sylvester Stallone say, as the intergalactic judge, Judge Dredd, I am the law? Like, what went through your head about your business?

C (4:39)

First and foremost, I just put my hands above my head. I said, oh, my God, what do I do next? And I just had to really go through everything in my mind. You know, I've been thinking about this moment for months already, and it's one of those things that you wait on anxiously, but as soon as it happens, you all of a sudden forget everything that you've thought about for months. And you say, and my mind just went blank. But then immediately, of course, I stepped in. I went straight to the Supreme Court, I downloaded the opinion, I started reading through it. But so by 10:13am I already had an email out to all of our customers about the product, about the opinion being published.

B (5:20)

So your customers are grocery stores, restaurants, big seafood importers. What does this mean for them? Does this mean that they do not have to pay tariffs anymore?

C (5:32)

No, actually, at the end of the day. Meaning today. At the end of today, absolutely nothing has changed.

B (5:40)

Wait, what? But there was this big decision. Everyone's losing their minds.

C (5:44)

Sure. So the Supreme Court has overturned it. So they've said that what was done, charging tariffs through ipa, was not legal. However, procedurally speaking, nothing has changed operationally. Customs hasn't changed any of the tariff numbers. Nothing's been published in the Federal Register, which is kind of like the government's newspaper, let's call it right now. Even up until about half an hour ago, as you know, President Trump had a news conference. President Trump himself has said nothing has changed. However, I am going to immediately start charging more tariffs. Today, I will sign an order to impose a 10% global tariff under section 122 over and above our normal tariffs already being charged.

B (6:33)

So in the immediate future, your customers are paying more in tariffs.

C (6:40)

Yes. So if. If what President Trump is intimating, with that sound bite that you played, as soon as on Monday, they could use section 122 to charge this additional 10%. So under the law, they're allowed to charge up to 15% for 150 days. Now, I don't know why he chose 10% instead of 15, but that was his choice, so he chose 10%. Now, because their reciprocal duties technically haven't been removed yet, conceivably, starting on Monday, we're going to have both the reciprocal duties as well as this additional 10% under section 122. And for any country that has that already has Section 301, such as China, they're going to also have this section 301. So we're kind of stacking these tariffs up above and beyond and waiting to see what happens with the actual reciprocal duties. Today is February 20th, and I don't know. I tracked this very closely, but on February 2, the President had said that he's going to change the reciprocal duties on India. He had published that he's going to reduce it from 25% to 18%. That still hasn't actually happened, and that's three weeks ago.

B (7:55)

Okay, so let's assume that this goes through, that the Supreme Court's decision goes through. Then. What does that mean for your customers? Are they paying less in tariffs? What are the steps that they need to make? I mean, they would potentially be owed some money by the government too, right?

C (8:13)

Well, one would think so. Logically speaking, I would assume, or. I don't know if I should say assume or presume at this point, but I would presume that they should receive refunds because something was done illegally. I. I know that if I do something illegally, I go straight to jail. But in this case, we're being told by the Supreme Court that what was done was incorrect, it was improper tariffs, should not have been charged. But one point that President Trump made and is true and correct, is that the opinion published by the Supreme Court made no mention of refunds themselves. So even though logically you would believe that there should be refunds in all of these, President Trump has already said that, more or less, he's going to be fighting this in court for the next five years.

B (9:03)

Yeah, but does this mean that going forward, they wouldn't have to pay import tariffs? Because some of the companies that you work with are paying thousands of dollars per shipment. I mean, this is a huge part of their business now.

C (9:15)

Sure. So because the Supreme Court has overturned it, saying that IPA should not be charged, they're now pointing the finger down to the lower courts. That would be the cit, Court of International Trade. So CIT is actually how all of this started, was that this, this court case started with the CIT all the way back in November. Then the CIT had said that IPA was illegal. It moved on to the Federal Circuit of Appeals. The Federal Circuit of Appeals agreed with the cit, then it got appealed again, and that's when it moved up to the spot Supreme Court. So now it's. Even though it's gone all the way up the rungs to the Supreme Court, they're pointing it down for implementation down to Court of International Trade. So until the Court of International Trade tells the rest of the government how to move forward, we're kind of in a. In a state of limbo. And these reciprocal duties, as of right now are continuing to be charged. We don't know. It could be on Monday, it could be next week, it could be another month. Until the CIT actually indicates how Customs and Border Protection has to move forward with this.

B (10:25)

What does this mean for your customers, and what does this mean for you?

C (10:31)

It means that while I'm on the phone with you, I've missed two calls from customers. And they're all asking the same thing.

B (10:37)

What are they asking?

C (10:39)

They're asking, when can I file for refunds? Number one. And what does this mean tomorrow? What are we doing? And I don't. I unfortunately wish I had all the answers, but I don't have the answers regarding when refunds will be allowable, if at all, because if they are allowable, we're going to have a lot of work to do, we have to refile all of the entries that we filed since more or less April of last year.

B (11:07)

Like every terraform you filled out since Liberation Day, you would have to take that as a mini case to the government to get a refund. How many cases is that? Is that like hundreds?

C (11:21)

Many, many, many thousands? In the tens of thousands.

B (11:24)

Wait, so what does that mean for you?

C (11:28)

Unfathomable amounts of work that I don't know how we're going to complete in a timely manner. I've already thought about, you know, there are many different avenues that we can take as well. We can request accept extensions with Customs. We just don't know if they'll allow extensions. In the past few months, there have been instances where Customs specifically did not allow extensions, even though this was playing out in the courts because Customs said let it play out in the courts. And so we don't know if now that the Supreme Court has issued an opinion on the matter, maybe they will allow extensions, maybe they won't. That will, It'll be a lifeline that will have additional time to file these post summary corrections. But it doesn't resolve the core problem that there's a year's worth of work that we need to basically redo while keeping up with our current work.

B (12:20)

I mean, you. We spoke earlier during Liberation Day about your business and all the changes that were happening. And you told me at that time that it was being a Customs broker, it was your father's business, and this was a good business for work, life, balance. You were able to spend time with your family, be home for dinner most nights. What is your job like now and what do you expect it to look like going forward?

C (12:47)

It's funny, I had a very brief conversation with actually my accountant earlier today. I'm not a superstitious person, but coincidentally this is the 13th year that I am in this business. And so, and so the first 12 years of my career were pretty much all the same. We, you know, filed our entries, we kept up on new regulations, on new policies, etc.

B (13:15)

And then the fish came in.

C (13:18)

Right. Everything worked and it just, it wasn't always perfect. But, you know, we dealt with the hiccups when they came. Now in my 13th year, you know, unfortunately, I'm now dealing with what appears to be, you know, an entirely different career. It's not even the same job that I was doing a year ago. I'm handling all the same work and responsibilities I was before. But I'm also now playing, I'm playing lawyer. I'm playing trade consultant. And I'm also half the time playing therapist for my customers.

B (13:53)

So what is this? What do you see as things going forward? President Trump in his press conference said, you know, this isn't really going to make a big difference. We're going to levy tariffs anyway. Like, I feel like you've been steeped in this. You know your stuff. What do you expect to see happen, I guess, for the rest of this year, for the rest of 2026, when it comes to tariffs?

C (14:17)

Sure. So immediately, right off the bat, as President Trump did indicate, is that they're going to start charging an extra 10% using section 122. They are allowed to do that without any sort of congressional support or authorization whatsoever. They can do that for 150 days. After that, then it does need additional authorization. I presume that based off of the Supreme Court ruling, is that the CIT is going to indicate in some fashion that the reciprocal duties themselves can no longer be charged because they were being charged under ipa. It's illegal. I mean, even if we're not going to agree to refunds, you can't keep on doing something that is deemed illegal by the Supreme Court, the highest court in the nation. I would hope for my sake that all of that gets resolved within the first couple days of next week, but I have no idea. Sometimes these things take longer than expected. If they're not taken care of in the next few days, it's just going to exacerbate the number of problems that we have because we're going to have to then refile all of these new entries as well. Regarding refunds, we're going to continue, of course, receiving questions about refunds. Now, the government can automate this process if they wanted to, but the general consensus is that there's no way, no how. You know, President Trump made it pretty clear I'm not giving back money. Oh, because they didn't say it in the Supreme Court opinion, we're going to, it's going to go through the courts for the next several years. That might be the case. And so it means that importers may need to file lawsuits against the US Government just to request refunds. So that operation that I mentioned earlier, the post summary correction, we as customs brokers might not legally be allowed to file those unless, let's say, they, each individual importer has gotten a ruling from a court. That's conceivably a possibility, which just postpones all of this process. Everyone who is waiting on this, there's different estimates between, let's say 130 to 250 billion dollars or so. They might not get their refunds now or for another four or five years.

B (16:30)

And you'll be right there. Jonathan, thank you so much for talking with us. Jonathan Lieberman is the president of New York Customs Brokers. Jonathan, thank you.

C (16:39)

Thank you so much. Stacey, thank you again.

B (16:46)

This show is produced by Stacey Wong and Jasmine J.T. green. Magnus Hendrickson is our supervising producer. Sam Rogich handles engineering and Dave Purcell fact checks. Special thanks to Jeff Muskus, Julia Rubin, Maria Ling and Angel Recchio. If you have a minute, please rate and review the show. It means a lot to us. And if you have a story that should be our business, send us an email. Everybody's loomberg.net that's everybody's with an sloomberg.net thank you for listening and see you next week.

A (17:18)

I'm Barry Ritholtz inviting you to join me for the Masters in Business podcast. Every week we bring you fascinating conversations with the people who shape markets, investing and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market. Whether you own stocks, bonds, real estate, commodities, crypto. You really need to hear these conversations. Sometimes it's behaviorists like Dick Thaler or Bob Shiller. Sometimes it's fund managers like Peter Lynch, Bill Miller, Ray Dalio. Sometimes it's authors. Michael Lewis, author of the Big Short and Moneyball. Regardless of the conversation, these are the folks that move markets each week. That's the Masters in Business podcast with me, Barry Ritholtz. Listen on Apple, Spotify or wherever you get your podcasts.