US Firms Plan to Use Tariff Refunds for Cash and Investments

A recent survey by the Federal Reserve Bank of Atlanta revealed how US firms are using their Trump tariff refunds. The majority of companies that received or sought refund payments plan to keep the funds as cash, invest in research and development (R&D) or new capital projects, or use them to lower prices temporarily.

According to the survey, nearly 70% of firms anticipate retaining at least some of their refunds as cash or cash equivalents. Over 50% 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%), lower prices (14.8%), or pay bonuses to staff (12.7%) or managers (10.1%).

The refund process has been ongoing since May, after the US Supreme Court struck down President Trump's tariffs under the International Emergency Economic Powers Act (IEEPA). As of September 11, around $134.7 billion in refund payments, including interest, had been paid out or accepted for processing.

Interestingly, a non-trivial portion of tariff refunds directly benefit American customers and employees, according to the report. While larger firms are more likely to receive or seek a refund, one-third of tariff refunds go to the most financially constrained firms.