FedEx and UPS have announced they will issue refunds to customers following a Supreme Court ruling that potentially opens the door for billions in refunds tied to import taxes established during the Trump administration.
The companies stated they will return funds once the federal government begins processing claims linked to the International Emergency Economic Powers Act (IEEPA), affecting many importers.
During UPS’s first quarter earnings call, CEO Carol Tomé noted that the company had handled 16 million IEEPA-related filings and returned over $5 billion in customs duties to the U.S. Treasury. “We’re just a pass-through,” she mentioned, indicating that any refunds would be promptly returned to customers.
Similarly, FedEx has committed to refunding customers after receiving money back from U.S. Customs and Border Protection (CBP), highlighting that they primarily serve as an intermediary in these customs collections.
This ruling stems from a Supreme Court decision earlier in February, which determined that a law from 1977 enacted by the Trump administration does not grant the president authority to impose tariffs, effectively nullifying many broad import tariffs previously applied to goods from major trading partners.
The implications could be substantial, with approximately $166 billion in tariff collections now potentially eligible for refunds, as suggested by data in court documents.
Since the federal government introduced a new system for processing refunds earlier this month, thousands of companies have already submitted applications, indicating a strong demand.
CBP revealed that it will start a phased refund system on April 20, allowing importers and intermediaries to file claims via an online portal, with most valid refunds expected to be processed within 60 to 90 days. However, more complicated cases could take longer.
For logistics firms like UPS and FedEx, these refunds aren’t anticipated to significantly affect their financial performance, as they mainly serve to collect and transfer customs duties to the government.
Nonetheless, the potential refunds highlight the broader economic ramifications of tariffs, which have disrupted global trade and pressured profits across various sectors.
Even with this court ruling reversing the IEEPA tariffs, other trade regulations are still in place, and officials have hinted that further tariffs might be introduced under different legal frameworks.
