Amazon.com defeats appeal claiming it aided tariff evasion

By Jonathan Stempel

NEW YORK, May 20 (Reuters) - A U.S. appeals court on Wednesday rejected a whistleblower's claim that Amazon.com helped foreign fur manufacturers evade ‌tariffs on products sold on its platform, hurting domestic rivals.

The 2nd U.S. ‌Circuit Court of Appeals found no proof that Amazon knew or deliberately ignored that foreign manufacturers paid ​artificially low tariffs by understating the value of their shipments, and that the manufacturers evaded U.S. Fish and Wildlife Service inspection fees by omitting required forms and shipping through ports not overseen by that agency.

Mike Henig, the owner of Montgomery, Alabama-based Henig Furs, said ‌Amazon should have realized the ⁠foreign manufacturers were able to charge below-market prices by fraudulently avoiding import tariffs and fees between 2007 and 2024, and violated the ⁠False Claims Act by shortchanging the federal government.

But the New York-based appeals court said there could have been an "innocent explanation" for the lower prices, such as economies of scale or ​lower ​labor costs.

"Below-market prices alone are therefore insufficient in ​this case to show that ‌Amazon was aware of a substantial risk that the foreign manufacturers were submitting false claims," Circuit Judge Jose Cabranes wrote for a unanimous three-judge panel. The decision upheld a lower court judge's January 2025 dismissal.

Amazon is regularly sued by customers and businesses that seek to hold it responsible for the conduct of sellers on its platform.

The Seattle-based ‌retailer's revenue in 2025 surpassed that of Walmart, ​long the world's largest retailer by revenue.

Lawyers for ​Henig did not immediately respond to ​requests for comment. Amazon and its lawyers did not immediately ‌respond to similar requests.

Amazon has also faced ​other litigation over tariffs.

On ​Friday, consumers filed a proposed class action accusing Amazon of failing to refund costs passed on to them in the form of higher prices, and ​which resulted from tariffs that ‌the U.S. Supreme Court found were imposed unlawfully by President Donald Trump. Many ​other companies including Costco, FedEx and Nike face similar lawsuits.

(Reporting by Jonathan Stempel ​in New York; Editing by Kirsten Donovan)