Apple store. AP-Yonhap News
Major U.S. companies are recovering tariffs they paid during the Trump administration faster than expected, sending billions of dollars in refunds into corporate earnings. Some firms have posted higher quarterly profits thanks to the refunds and are weighing whether to return the money to customers or lower product prices.
More than 40 companies in the S&P 500 have recently reported a combined $9.6 billion in tariff refunds, according to a recent report by The Wall Street Journal. Of that amount, at least $2.1 billion has already been paid in cash.
Refund claims filed with U.S. Customs and Border Protection (CBP) exceeded 252,000 as of the 31st of last month. In a filing submitted to a federal court, CBP said claims currently being processed total $128.7 billion.
By sector, technology hardware companies stood out. Six such firms reported a combined $2.5 billion in refunds, with Apple accounting for about 90% of that total.
Among individual companies, Apple’s refund was the largest at about $2.2 billion. Nike followed with $986 million, ahead of FedEx at about $800 million, Amazon at $640 million and General Motors (GM) at $500 million.
The refunds also had a meaningful impact on quarterly results. Apple said its most recent quarterly earnings per share (EPS) rose by 11 cents because of the refund, equal to about 5% of the quarter’s total profit.
Of GE HealthCare’s EPS of $1.24 in its latest quarter, 18 cents also came from tariff refunds. The company has recovered $107 million so far and expects to receive an additional $38 million.
Companies are putting the money to different uses. FedEx plans to pass its roughly $800 million refund on to shippers and consumers in stages. Costco has also said it will return the benefit in some form to customers who bore the tariff costs.
Amazon said that when it is difficult to identify the specific customers who paid the tariffs, it plans to use the refunds as a source of investment to keep product prices low.
In some cases, the refunds fall short of offsetting a company’s overall burden. Caterpillar, which makes heavy machinery for construction and mining, recorded a $392 million refund gain on its books, but the tariffs it expects to pay this year alone reach $2.2 billion — far more than the refund.
The refunds stem from a court ruling on tariffs the Trump administration had imposed on major trading partners under the International Emergency Economic Powers Act (IEEPA), enacted in 1977.
In February, the U.S. Supreme Court ruled that the IEEPA does not give the president the authority to impose tariffs. The Court of International Trade then ordered the government to begin refund procedures for importers that had paid the tariffs.