Businesses can apply for customs duty refunds. Will consumers see it?
Companies are not required to share tariff refunds with customers, but some have said they plan to pass on some relief.
American companies stand to receive billions of dollars in tariff refunds from the U.S. government, but a USA TODAY analysis of regulatory filings finds that only a minority of the nation’s largest companies have pledged to pass that money directly to consumers.
These refunds were made available after the U.S. Supreme Court struck down tariffs imposed by President Donald Trump’s administration under the International Emergency Economic Powers Act (IEEPA). Other tariffs still apply.
U.S. Customs and Border Protection has begun processing $166 billion in potentially pending refund claims.
A USA TODAY analysis reviewed more than 630 Securities and Exchange Commission filings referencing the Supreme Court ruling and found that at least 90 publicly traded companies have disclosed plans to seek refunds, providing the most detailed account yet of companies’ efforts to recover billions of dollars.
The largest company, Ford, is expected to pay $1.3 billion in refunds. General Motors, $500 million. UPS is worth $500 million, according to the filing.
Of the three companies, only UPS announced plans to refund customers. “UPS will issue refunds 60 to 90 days after receiving funds from CBP,” the company said on its website.
Most companies say they are keeping the money to pay down debt, reduce supply costs and invest in their businesses.
Only a handful of companies claim to donate a portion of their funds to customers. Even for these companies, it’s unclear whether any of them will ultimately reach consumers, leaving them with limited options for what to do.
“Companies will only pass on tariff refunds to consumers if they decide to do so or if forced to do so by a court,” said Alfredo Carrillo Obregon, a policy analyst at the Cato Institute.
Do some companies pass on customs duty refunds to their customers?
Take Cardinal Health, for example. The medical supplies distribution giant paid about $200 million in tariffs and passed some of the costs on to customers.
The company now says in an SEC filing that it will refund customers a portion of the price increases incurred during the tariff period.
But Cardinal Health’s customers are businesses, hospitals and pharmacies, and it’s unclear whether the savings will ultimately reach consumers. Cardinal Health did not respond to a request for comment.
FedEx also expects to recover the amount, but did not disclose the amount in its filing. Like UPS, the company plans to pass the money on to customers.
FedEx communications advisor Amelia Ables told USA TODAY in an email that supporting consumers remains a priority. “As the U.S. government reimburses FedEx for IEEPA duties, we remain committed to reimbursing applicable duties, including interest, received from Customs and Border Protection.”
Still, it’s unlikely that much of the $166 billion being negotiated will end up in U.S. consumers’ pockets. Previously, President Trump even floated the idea that the proceeds from these tariffs could be used to send $2,000 checks to Americans, but that plan never materialized.
“The only remedy really is if you have contractual rights,” said Stephen Reisinger, a partner at law firm Norton Rose Fulbright. “Generally, everyday consumers like Joe and Sally don’t have contractual rights against the companies they buy from.”
These duty refunds are focused on companies that imported goods into the United States, meaning they paid duties to the government.
“Importers vary greatly in what they do with the tariff costs,” said Ted Murphy, a partner at law firm Sidley Austin. “Some importers may have simply eaten up the tariff costs, while others may have passed them on to their customers.”
There is no general right to refunds to consumers, so some may file claims against importers who have increased costs. For example, both Costco and Nike have been sued.
But some say that even if companies don’t explicitly give refunds back, they use them to indirectly benefit consumers.
John David Rainey, Walmart’s executive vice president and chief financial officer, said on an earnings call in May that the company would invest the refunds into lowering prices.
“We’re using the process to get refunds, and given what we’ve seen so far, both in terms of the pressure on consumers from fuel prices, we’re definitely going to be biased to prioritize price investments for that,” Rainey said.
Rainey said on the call that the refund amounts to less than half of 1% of the company’s annual U.S. sales. CNBC estimated the amount at about $2.42 billion.
Similarly, Home Depot said in its filing that it has begun receiving refunds, but the company did not disclose the total amount of duties it paid or how much it expects to recover.
Sarah McDonald, a company spokeswoman, told USA TODAY in a statement that the company’s goal is to maintain the best value for customers.
“In May, we began receiving non-material refunds and may receive more refunds this quarter. These refunds will be used to offset costs from additional tariffs and other cost pressures,” McDonald said.
Still, the impact on consumers is clear. The Fed’s April study of the impact of tariffs on consumer prices showed that steep tariffs have kept prices of core goods, including cars, furniture and other products, high, but exclude volatile prices for food and energy.
Despite President Trump’s warnings, major companies continue to push for refunds of tariff payments. When Trump appeared on CNBC’s “Squawk Box” in April, he was told that Apple had initially refrained from requesting a refund. President Trump responded that it’s “great” for companies to choose not to apply.
“In fact, if they didn’t do that, they would know me very well. I’m very honored to say what I’m saying now,” Trump told CNBC. “If they don’t, I’ll remember them.”
But that hasn’t stopped America’s biggest companies from pursuing what they’re owed. Customs and Border Protection launched a tariff refund portal on April 20 and is rolling out refunds in phases. An agency spokesperson told USA TODAY in a statement that as of May 22, the agency had processed more than 15 million entries and accepted $85 billion worth of claims.
Apple said in its May filing that it was seeking a refund, but did not specify how much it expected to collect. The company previously said it paid $3.3 billion in tariffs during the second Trump administration.
Sell refund rights at a discount
USA TODAY’s analysis also uncovered several examples of companies selling refunds to investors. These companies reported selling their refund rights outright to financial companies and receiving less than the full amount in exchange for immediate cash.
Children’s clothing retailer Children’s Place sold its $38.2 million claim to an investment firm for $25.7 million ($1.67) and used the proceeds to pay down debt. Medical device company Accuray sold a $9 million claim to a third party for $6.6 million. Camera maker GoPro sold about $19.4 million in refund rights to lenders.
But it’s not just multibillion-dollar companies that are hurting, but small businesses as well.
The Justice Department is appealing a court order forcing the U.S. government to compensate companies. The appeal does not affect cases currently being processed by Customs and Border Protection, but if successful it could force some companies to sue individually, a process that could be costly.
IEEPA tariffs are also just one set of tariffs that they deal with. Following the Supreme Court’s ruling invalidating these, President Donald Trump announced other significant tariffs (some of which were recently deemed invalid).
“Ultimately, the government received money from U.S. importers pursuant to a series of tariffs that the Supreme Court declared illegal,” Carrillo Obregon said. “It shouldn’t be too difficult for the government to return the funds that these companies are rightfully entitled to, so it is extremely disappointing to see the return process not proceeding as smoothly as it should, and will likely raise further hurdles along the way.”
