Tariff refunds provide companies with a surprise boost

Uncle Sam is handing out tariff refunds—and corporate America is first in line.

As of July 31, US Customs and Border Protection had received more than 252,000 refund applications and accepted $128.7 billion worth of requests for processing. A chunk of that has gone to some of the biggest companies in the US: More than 40 S&P 500 companies have disclosed a combined $9.6 billion in tariff refunds over the past quarter, including at least $2.1 billion in cash.

Some of the biggest beneficiaries include:

• Apple—reported $2.2 billion in refunds
• Nike—recorded $986 million
• FedEx—received $800 million

Technology hardware companies have reported the most refunds of any sector, with Apple alone accounting for nearly 90% of the group’s total.

Those refunds are already showing up in earnings. Apple said they contributed $0.11 to EPS last quarter, or roughly 5% of the total, while GE HealthCare said refunds added $0.18 to its quarterly EPS of $1.24.

One catch: Reported refunds don’t necessarily mean cash in the bank. Some companies are recognizing expected refunds before the money arrives, meaning earnings can get a one-time boost without an equivalent increase in liquidity.

Consumers get a cut

If you feel like you’re missing out on the action, some of those tariff refunds are making their way back to customers, too.

Shippers, which directly collected tariff charges from customers, are now passing those refunds along. FedEx plans to return about $800 million to customers beginning in August. Costco said it will distribute refunds to customers at levels similar to the tariff costs it had passed on, and valve supplier IDEX expects to rebate $14.7 million of the $20 million it received.

For retailers, it’s more complicated. Companies like Amazon (which got $640 million in refunds) generally passed tariff costs along indirectly rather than as a separate fee, making individual refunds hard to trace. Instead, Amazon management said some of that money could make its way back to consumers through lower prices.

Even so, consumers are getting back far less than they paid in tariffs, prompting more than 80 class-action lawsuits against retailers, including Costco, Nike, and Amazon.

Zoom out: For the American economy, tariffs are becoming a huge drag. The US deficit hit $432 billion for the month of July—a record for the month—as refunds cut into customs revenue. The result is a messy redistribution: Companies are getting billions back, consumers are seeing only a fraction, and Washington is dealing with a fiscal headache.—SY