You probably won’t receive a huge fee refund.
The largest companies will stand to gain the most money as the Trump administration begins returning more than $166 billion in duties deemed illegal by the Supreme Court. Although President Trump’s trade policies have led to higher prices for businesses and consumers, many families are not in a position to directly benefit from the upcoming refund checks.
The discrepancy is a reflection of the country’s complicated import laws and the ever-fluid nature of Trump’s trade war.
When the government taxes foreign goods, it charges them to the companies and brokers who bring those items into the country. Those costs proved substantial during the president’s first year in office, after he imposed a set of so-called reciprocal tariffs on nearly all of the United States’ trading partners.
But a majority of judges on the country’s highest court struck down those duties in February, forcing the administration to return much of its coveted tariff revenue. As a result, the government owes refunds to importers on its books (i.e., companies, in many cases), even if those companies ultimately passed on the costs of Trump’s taxes to their customers.
Beneficiaries may include retail giants such as Costco, Gap, Home Depot, Kohl’s, Lowe’s, Target and Walmart. For some, analysts estimate the rebates could run into billions of dollars each, leaving them with the option of keeping the money or sharing it with consumers, even if indirectly in the form of future discounts.
But almost none of those U.S. retailers commented as of Thursday on their exact plans. Only Costco previously promised to pass the savings on to customers, without explaining how, as the bulk-buying company faces a series of class-action lawsuits from angry Americans who believe they are owed refunds.
Heather Boushey, who served on the White House Council of Economic Advisers under President Joseph R. Biden Jr., described the refund process as a “windfall for businesses,” some of which imposed the tariffs on consumers.
“American families,” he added, “are undoubtedly the losers.”
That could make tariff refunds a divisive political issue, at a time when a majority of voters have already expressed discontent with the president’s handling of the economy. Democrats have demanded that the administration return the money to families, but Trump has absolutely opposed returning the money, suggesting this week that it would be “brilliant” if companies decided to waive the payment.
The White House did not respond to a request for comment.
For more than a year, Trump has insisted that foreigners, not Americans, have borne the financial burden of his tough global trade war. But the data has always told a more complicated story, one in which Americans have actually had to pay a substantial price.
A measure by the Federal Reserve Bank of New York, released in February, estimated that nearly 90 percent of the economic burden stemming from Trump’s duties had fallen on American businesses and consumers. Its findings prompted an unusually harsh rebuke from the White House, which attacked the report’s economists for a conclusion contrary to the president’s beliefs.
Trump’s tariffs have also threatened to hit families’ finances. Studying Trump’s latest rates in April, the Yale Budget Lab, a think tank, estimated that his policies could cause prices to rise as much as 1.1 percent in the short term, resulting in an annual income loss of about $1,500 per household. But he cautioned that his analysis was based on a number of assumptions about how Trump’s rates might evolve.
After Trump unveiled his top duties last spring, companies in particular tried a variety of tactics to mitigate the financial impact. They reduced imports, reduced staff, paused development, renegotiated agreements with suppliers or absorbed the impact of tariffs on their results. And in some cases, prices went up.
The costs of Trump’s trade war proved so staggering that some companies filed lawsuits in an attempt to recover their money even before the Supreme Court ruled on whether the president had acted illegally. The official refund process began only on Monday and, according to the government itself, the task ahead is monumental. As of early March, there were more than 330,000 importers who had paid illegal tariffs on more than 53 million entries, customs officials said.
Some of the refunds can be significant. Walmart, for example, could recover more than $10 billion in previously paid tariffs, according to an analysis this month by Citi Research. Target could be owed more than $2 billion, Nike could receive $1 billion and Home Depot could be repaid more than $500 million, according to the report.
Paul Lejuez, managing director at Citi Research who specializes in department stores, said the estimates did not include interest owed by the government on those refunds. He warned that the figures were imprecise calculations derived in part from the companies’ finances.
Still, Lejuez said he hoped retailers would soon face pressure from consumers, who want to see companies “show some signs of giving back.”
At least three — FedEx, UPS and DHL — have said they intend to share fee refunds directly with customers. Shipping giants often pay tariffs as official importers of shipped products, but pass the charges on to consumers who place the orders. Each said they would help customers recover money.
Other companies have been more cautious. At an April forum hosted by JPMorgan, John David Rainey, executive vice president of Walmart, said he expected the big-box retailer to “certainly take advantage” of any refund process. But it offered few clues about Walmart’s plans for the money.
“We’ve absorbed a lot of that,” he told investors at the time, referring to the president’s tariffs. “In some cases, we had to pass that price increase on to customers.”
The lack of clarity has led some dissatisfied consumers to take matters into their own hands. In recent weeks, they have filed class-action lawsuits against FedEx, UPS and other brands, including Costco and Temu, the low-cost online marketplace, according to state and federal court records.
Lawsuits generally seek to recover money directly for buyers, arguing that companies do not deserve to make profits twice: first by raising prices on consumers and then collecting refunds of federal fees plus interest.
“The consumer, for all intents and purposes, pays the fee,” a group of attorneys argued in their lawsuit against Costco, filed in March. They claimed that the company’s pursuit of a refund “constitutes unjust enrichment at the expense” of customers.
David French, executive vice president of government relations at the National Retail Federation, a lobbying group, said it would be difficult for companies to try to return money directly to consumers because executives can’t simply look at a rate and “take a specific price increase out of a retailer’s product range.”
But he said he hoped some companies would try to give back in other ways. “There may not be a specific item on a receipt that says, ‘This is a fee refund,’ but in many cases you will see money returned to customers,” French said.
Echoing this sentiment last month, Ron M. Vachris, Costco’s chief executive, told shareholders that his retailer would try to “find the best way to return this value to our members through lower prices and better values.” It also said Costco did not “pass on the full cost” of the tariffs to its members and that it was difficult to calculate the “exact impact” of the tariffs on prices.
Trump’s tariffs are expected to change again, as the White House seeks to resurrect its previous sky-high rates using another set of trade powers. The president has already imposed a temporary 10 percent blanket tariff on most imports, using a legal provision that has been challenged in court.
The expected losses from the tariffs still represent a marked departure from the gains Trump had once promised Americans. Initially, the president had said he would return some of the money raised in his functions to families in the form of a refund check. The idea never gained much support even among Republicans in Congress, but the president repeatedly promised to deliver “a good dividend to the people” as he sought to shore up support for his economic agenda.
Trump does not appear to have mentioned the idea since he lost at the Supreme Court, but many Democrats have begun demanding that his administration compensate the families.
On Thursday, a group of Democratic lawmakers, including Reps. Steven Horsford of Nevada and Suzan DelBene of Washington, called on top executives at Walmart, Target and other companies to ensure that upcoming tariff refunds “go to those who ultimately bore those costs.”
“American families felt the impact of these tariffs on everyday life,” they wrote in a letter. “The question of how refunds are distributed is a question of corporate responsibility and economic fairness.”
