U.S. companies have begun deploying billions of dollars recovered from tariffs struck down by the Supreme Court in February, after duties imposed under the International Emergency Economic Powers Act had generated about $166 billion. The companies have directed the cash toward cutting prices, repaying debt, supporting employee savings and compensating suppliers.
Sharp increase in tariff-refund disclosures
Companies in the Russell 3000 mentioned tariff refunds about 1,000 times on earnings calls and in disclosures during July, August and September, nearly four times as often as in the previous earnings season. Essential and discretionary consumer-goods companies alone disclosed receiving about $9.8 billion.
Cutting prices, repaying debt and supporting suppliers
Williams-Sonoma received $200 million, allocating $10 million of it to employee contributions to retirement accounts and paying $47.5 million to suppliers that had absorbed some of the tariff burden. Kohl’s shared part of the roughly $150 million it recovered with its suppliers and directed additional cash toward inventory for its lower-priced brands.
Companies have also moved to sell their rights to tariff refunds to obtain cash immediately. Funko sold claims worth more than $22 million for $19.2 million and used part of the proceeds to repay a loan, while Xerox sold $105 million in claims for $80 million in cash to help reduce its debt.
Academy Sports and Outdoors recorded refunds of $83.7 million, then sold claims worth $72.2 million to a third party for $10.5 million, directing the proceeds primarily toward price cuts.
The refunds also reached consumers. Walmart said some of its funds would go toward discounts and temporary promotions, while e.l.f. Beauty plans to use part of the $50 million it recovered to cut prices on about 10% of its products.
Rising costs reduce the impact of the cash injection
Companies face higher fuel, metals and raw-material costs, along with continuing risks from the U.S.-Canada trade dispute, which could reduce the financial impact of the refunds.
Helen of Troy said additional costs expected during the rest of the year would exceed the more than $9 million it received in the first phase. Stanley Black & Decker warned that inflation and higher metals and oil prices were outweighing the positive impact of the refunds, raising the prospect of price increases in 2027.
Bath & Body Works expects to absorb $30 million in tariffs and additional input costs in the second half, assuming tariffs on Canada remain at 50% through the end of 2026.
