Companies in the US are wary of saying too much about one particular nugget of good news for their bottom line and inflation.
Only about 5% of the 3,000 largest publicly traded US companies mentioned refunds in the context of President Donald Trump’s now-illegal tariffs in recent comments and regulatory filings, according to a Bloomberg analysis of firms in the Russell 3000 Index.
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The Customs and Border Protection agency opened a refund portal on April 20 for more than 330,000 firms that paid import taxes under Trump’s use of the International Emergency Economic Powers Act, or IEEPA. The first batch of payments came unexpectedly quickly, and some companies have already logged those benefits. Others acknowledged they may have to wait at least another quarter or two to offer details.
There’s reason for discretion: The scramble for as much as $166 billion in refunds — plus interest — comes with the risk of political and legal jeopardy. Trump often says it’s foreign firms that pay his import taxes — though studies show otherwise — and he’s now painting refund backers as unpatriotic after the Supreme Court struck down his IEEPA authority.
“You’re talking about the people in many cases that hate our country, giving them back money,” the president told reporters at the White House on Thursday. “It was a terrible decision.”
Recent disclosures from some of America’s most well-known businesses, ranging from Cardinal Health Inc. to Walmart Inc. challenge Trump’s assertion and offer a glimpse into the refund effort.
Among those S&P 500 companies presenting amounts, the documents indicate they either paid IEEPA tariffs, or are expecting to receive IEEPA-related refunds, totaling about $7.3 billion, according to calculations by Bloomberg.
That’s only the beginning. US Customs now has the complicated task of refunding the 330,000 importers that paid the IEEPA levies over the past year, and early filers are already seeing $35.5 billion flowing into their bank accounts.
Still, issues with electronic filings stemming from the chaotic tariff rollout can lead to rejections, and many importers remain skeptical that the system will work for their more complex entries.
According to the first flurry of analyst calls and other earnings announcements, executives are balancing the need to answer Wall Street’s financial questions against their uncertainty about the amount and timing of reimbursements.
Saying too much about refunds invites not just Trump’s scorn but also legal challenges from consumers clamoring for a piece of the payout.
Lawsuit Risk
“I counsel against public statements regarding impacts of the tariffs or tariff refunds due to the risk of class-action suits as well as other customer and supplier considerations,” said Angela Santos, who leads the customs practice at ArentFox Schiff LLP in New York.
Companies including Nike Inc., Lululemon Athletica Inc. and Amazon.com Inc. have been hit recently by lawsuits from customers who allege they’re owed a refund because they paid higher prices as a result of tariffs that were ultimately deemed unlawful.
A lawsuit filed May 15 accused Amazon of profiting off “hundreds of millions of dollars in unlawful tariff costs” and of forgoing refunds in order to “ingratiate itself with Trump.” The class action is a bid to force the e-commerce giant to seek, and pass along, refunds. The company has not publicly stated whether it has or will pursue reimbursements.
Costco Wholesale Corp. is one of thousands of companies that sued the Trump administration over IEEPA refunds, but didn’t indicate whether it had applied for reimbursements via the customs portal in a court filing submitted May 18. The retailer argued that a consumer class-action lawsuit should be dismissed and stated that “Costco has received no tariff refunds yet.”
US households struggling with higher gasoline and food costs may see some indirect benefits even though refunds aren’t flowing straight to consumers, according to Stephen Juneau, an economist at Bank of America Corp.
“Importers that receive refunds will likely use the money to offset rising energy and shipping costs,” Juneau wrote in a May 20 note to clients. “They may also offer some type of consumer relief, which surveys suggest is more likely to come in the form of slower price hikes rather than a direct benefit to consumers. Therefore, the refunds could be a modest disinflationary force in ahead of midterms,” he said, referring to November congressional elections.
Many of America’s largest corporations are pursuing refunds, even if they’re not sharing much.
Refund Seekers
“I haven’t heard anybody say they weren’t going to file,” said Tony Gulotta, leader of Ryan’s national tax practice in New York.
Apple Inc. is one of the largest companies so far to confirm it’s going after refunds. Chief Executive Officer Tim Cook said the iPhone maker is “following the established processes, and we plan to reinvest any amount we receive back into US innovation and advanced manufacturing.”
