How Are Firms Using Their Tariff Refunds?
September 21, 2026
After the Supreme Court invalidated many US import tariffs in February and a federal court ordered refunds of the tariff duties at issue, we've been wondering how many businesses seek refunds, how they manage the refund process, and how they plan to use their refunds. (The funds involved are sizable: nearly $170 billion, including roughly $100 billion in refunds by late July.) So we posed these questions to more than 1,100 C-suite execs in our Survey of Business Uncertainty.
When firms get one-off windfalls, they usually keep it as cash, distribute the funds to shareholders, or—if they're liquidity-constrained—perhaps use the funds to support the firm's investments. However, recent news stories suggest that some large retailers are using refunds to temporarily lower prices or give rebates to customers. In principle, firms could also share refunds with workers or managers, although that's not what the theory predicts (see Modigliani and Miller 1958 and Lintner 1956).
From August 10–21, we fielded a set of special questions on these issues. Our results suggest that roughly a quarter of execs believe their firms are eligible for refunds. These refund payouts average a modest 1.7 percent of annual firm revenues.
We find that firms are deploying these funds in a variety of ways: keeping them as cash, investing them in R&D or new capital projects, and using them to lower prices for a while. We also find that some firms use the refunds to give bonuses to workers or managers.
Exploring eligibility
Out of 1,156 responses, nearly a quarter of our surveyed execs believes they are eligible for a refund (see figure 1). About 40 percent of those eligible (or about 9 percent of our sample, weighted by employment) have already received refunds.
Larger firms are slightly more likely to receive or seek a refund. Publicly listed firms are more than twice as likely to have received a refund. Although it makes sense that larger firms with greater resources can more readily navigate the refund process, our Atlanta Fed colleagues note that one-third of tariff refunds go to the most financially constrained firms. About two-thirds of firms have opted to use internal staff to manage the process or sell their refund rights to third parties (see figure 2).
Our most noteworthy findings pertain to how firms use tariff refunds. In our survey question on this topic, we instruct respondents to “select all that apply.” In line with the standard textbook analysis, 70 percent of firms anticipate retaining at least some of their refunds as cash or cash equivalents (see figure 3). More than half plan to devote a portion of their refunds to R&D or capital investment projects.
Many firms expect to use refunds to give customer rebates (17.2 percent), lower prices (14.8 percent), or pay bonuses to staff (12.7 percent) or managers (10.1 percent). Although these are surprising uses of cash windfalls relative to the predictions of standard models, these results also suggest that a nontrivial portion of tariff refunds directly benefit customers and employees.
References
Lintner, J. 1956. Distribution of Incomes of Corporations Among Dividends, Retained Earnings, and Taxes. The American Economic Review 46(2), 97–113.
Modigliani, F., and M.H. Miller. 1958. The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review 48(3), 261–97.