US corporations have collected more than US$100bn in tariff refunds over the past few months, presenting corporate executives with the happy problem of how to book and deploy the boomeranging funds.
The repayments are arriving because the Supreme Court invalidated levies collected under President Donald Trump’s orders under the International Emergency Economic Powers Act. US Customs and Border Protection confirms that it returned US$107bn to importers of record as of late August.
For many treasurers and chief financial officers, the 2025 tariffs originally caused a supply chain scramble, pricing hikes, austerity and other headaches. Now the unusual refunds are presenting issues with accounting for and managing the arriving cash, deciding what to do with it, and framing the windfall when communicating with customers and Wall Street analysts.
Leading the way in Q2 tariff refund totals were the nation’s largest retailers and consumer-products providers. Most trumpeted the refunds as a catalyst to lower prices for consumers, but some companies acknowledge that the receivables directly boosted net income and widened profit margin. Some applied the non-recurring funds to cost of sales or earmarked it for investments in machinery or new inventory. A few will need to consider the inflows’ impact while calculating annual executive bonuses.
Walmart reported US$2.9bn in tariff refunds in the second quarter, while Apple received about US$2.2bn. Target said its refunds boosted net earnings by US$752m in the quarter. Home Depot booked US$730m in refunds in Q2, Amazon’s haul was US$600m and TJX Cos. said US$331m was returned to company coffers.
Lowe’s Cos. executives said its US$80m in tariff refunds in Q2 have already been eaten up by higher costs.
“That was largely offset by fuel and transportation pressure,” Lowe’s CFO Brandon Sink explained. “We’re pursuing … all that we’re eligible to collect. Any further benefits are going to be reinvested in customer-facing actions that are going to continue to reinforce our value prop.”
Quantifying the value of refunds
Some companies say it is unclear how much they ultimately will receive in tariff refunds, especially if they do not directly import their raw materials or stock. The official importer of record may have been a trading house, wholesaler, distributor, freight provider or even a US affiliate of the overseas supplier. After Trump began his series of tariff orders, firms up and down the supply chain began amending sales agreements to ensure protection or cost-sharing under various potentialities.
Insteel Industries, a producer of steel wire structures, explained that it cannot yet quantify its tariff refunds.
“We’re going to record them when we receive them,” Scot Jafroodi, Insteel’s CFO and Treasurer, said during the second-quarter conference call. For the “vast majority of the tariffs that we paid, someone else was importer of record. So, we’re waiting for them to file all the paperwork,” he added.
During Masco Corp.’s Q2 earnings call, executives fielded multiple analyst questions about booking tariff refunds and how those funds should be considered when gauging the performance of the plumbing manufacturer’s operations. The company recorded US$95m in net tariff refund benefits in the quarter but said the full-year impact will be only US$85m.That’s because annual employee incentive-based compensation eventually will be deducted and amortised through the full year. Meanwhile, the company is already investing much of the proceeds in growth initiatives.
“One thing we looked to do in Q2 was to capture and accrue for those investments in the quarter to line up with the timing of when the tariff refunds were recognised, to really make it as one-time in nature as possible from a P&L standpoint to isolate it in Q2,” Masco CFO and Treasurer Richard Westenberg explained. “The expenditures will be over time, kind of later this year and potentially into next year. … The full impact in terms of our investments and employee-related costs are captured here in Q2 with a bit of a spillover.”
