IEEPA Tariff Refunds Used Mostly for Company Profits

The Federal Reserve Bank of Atlanta has released findings from its survey on how companies are using International Emergency Economic Powers Act (IEEPA) tariff refunds. The survey, conducted in August with over 1,100 c-suite executives at U.S. firms, found that most businesses are keeping the returned cash for themselves.

Roughly 75% of respondents reported keeping some or all of their IEEPA tariff refunds as cash, while 52.5% used the funds to invest in research, development, and capital projects. Some companies are also using the refunds to give customers rebates, lower prices, or pay out shareholders.

According to the Atlanta Fed's survey, a nontrivial portion of companies is benefiting their customers and employees with tariff refund disbursements. Retailers such as Walmart and BJ's Wholesale Club have explicitly stated that they are using tariff refunds to lower prices.

The survey also found that nearly 70% of firms rely on internal staff to manage the IEEPA tariff refund process, while about 22% have hired a third party. American Eagle Outfitters and The Children's Place are among the companies that offloaded a portion of their return to shore up cash reserves.