Nike faces lawsuit for reportedly not refunding tariff expenses to customers

Nike Faces Lawsuit Over Tariff Refunds

Nike is now grappling with a class action lawsuit that claims the company did not refund tariff-related costs that were essentially offloaded onto consumers through price increases.

In this proposed class action, consumers assert that Nike should not be allowed to retain the “significant” refunds it could receive. This follows a U.S. Supreme Court ruling from February, which stated that the president lacks the authority to impose certain tariffs under the International Emergency Economic Powers Act (IEEPA).

Nike disclosed that it has already paid around $1 billion in duties for imported goods due to these tariffs. Plaintiffs contend that, to mitigate these costs, the company raised footwear prices by $5 to $10 and apparel prices by $2 to $10.

The complaint, lodged in a federal court in Portland, Oregon, highlights that “Nike has not made any legally binding commitment to refund any excess fees associated with the tariffs to consumers who actually paid them.”

“Unless bound by this court, Nike stands to collect the same tariff payments twice: once from consumers through higher prices and once from the federal government through tariff refunds,” the complaint indicates.

This lawsuit is just one of several filed against large corporations, including Costco, related to the failure to pass on tariff-related refunds to consumers.

Over 2,000 companies have initiated claims in the United States Court of International Trade in an attempt to recover duties paid on imported goods.

In a conference call back in March, Nike mentioned that the fiscal quarter ending in August 2026 is expected to be the final period where tariffs substantially impact its gross margins.

This legal challenge comes on the heels of Nike’s announcement regarding the layoff of around 1,400 employees across its global operations. The Chief Operating Officer, Venkatesh Alagirisamy, informed staff that the job cuts will mainly affect the technology division, which constitutes just under 2% of the company’s global workforce across North America, Asia, and Europe.