Companies Hoard Tariff Refunds as Cash, Rely on Windfalls for Investment

The Federal Reserve Bank of Atlanta surveyed 1,156 top executives and found that most companies plan to retain tariff refunds as cash. According to the survey, 75% of U.S. companies that received refunds from nearly $170 billion in tariffs deemed illegal by the Supreme Court will keep the windfalls in cash. This decision comes after the Trump administration refunded $100 billion in duties plus interest as required by the February Supreme Court ruling.

The Atlanta Fed found that on average, companies have received a refund equivalent to 1.7% of annual revenues. Large companies are more likely to seek and receive reimbursement than their smaller counterparts, with publicly listed companies being over twice as likely to have gotten the reimbursement.

The survey also revealed that while three out of four companies plan to retain at least some of the refunds as cash, more than half plan to channel some of the windfall to R&D or capital investment. Other uses include providing customer rebates, paying bonuses to employees, and rewarding shareholders.