FedEx and UPS have announced plans to return tariff refunds to their customers following a Supreme Court decision that could result in billions of dollars in reimbursements related to Trump-era import taxes. The Supreme Court's February ruling determined that the 1977 International Emergency Economic Powers Act (IEEPA) did not authorize presidents to impose tariffs, thereby invalidating a wide range of import duties previously applied to goods from major trading partners [1].
UPS CEO Carol Tomé stated during the company's first-quarter earnings call that UPS processed 16 million IEEPA-related entries and remitted over $5 billion in tariffs to the U.S. Treasury, emphasizing that UPS acts as a 'pass-through' and will return the money to customers once refunds are issued [1]. FedEx echoed this commitment, confirming it will return funds to customers as soon as it receives refunds from U.S. Customs and Border Protection (CBP), reinforcing the role of logistics firms as intermediaries in tariff collection [1].
The CBP began rolling out a phased refund system on April 20, allowing importers and brokers to submit claims through its online portal. Most valid refunds are expected to be issued within 60 to 90 days after approval, though more complex cases may take longer [1]. According to government data cited in court filings, approximately $166 billion in tariff collections could be subject to refunds, and thousands of companies have already filed claims since the new system launched earlier this month [1].
Despite the large scale of potential refunds, UPS and FedEx indicated that these repayments are not expected to materially impact their financial results, as the companies primarily serve as intermediaries for tariff collection and remittance [1]. The Supreme Court ruling only affects tariffs imposed under IEEPA, while other trade measures remain in effect, and officials have suggested that additional duties could be pursued under alternative legal authorities [1].
Market reaction was mixed: UPS shares rose 2.57% to $106.61, while FedEx shares fell 0.42% to $388.59 following the news [1].
CONCLUSION
The Supreme Court's decision has set the stage for significant tariff refunds, with FedEx and UPS pledging to pass recovered funds directly to customers. While the refunds are unlikely to materially affect the logistics firms' financials, the ruling signals a major shift in U.S. trade policy enforcement and could have broad economic implications for importers and global trade flows.