NextFin News - American corporations are unlikely to pass on billions of dollars in potential tariff refunds to consumers, according to the latest CNBC CFO Council survey released on Monday. The findings suggest that while the U.S. government faces a potential $165 billion liability following legal challenges to U.S. President Trump’s use of the International Emergency Economic Powers Act (IEEPA), the windfall will largely be absorbed by corporate balance sheets rather than reflected in lower retail prices.
The survey, which polls chief financial officers from some of the largest public and private companies in the United States, reveals a stark disconnect between the administration's rhetoric and corporate reality. U.S. Trade Representative Jamieson Greer recently urged companies to "give refunds to workers and customers" during a March appearance on CNBC’s Squawk Box. However, the CFO Council data indicates that only a small fraction of executives intend to lower prices, with the majority citing the need to recoup previous losses and offset ongoing supply chain restructuring costs.
The legal battle over these refunds stems from a Supreme Court ruling earlier this year that questioned the legality of certain "stacked" tariffs imposed during the second Trump administration. While the ruling opened the door for companies to reclaim duties paid on imported parts and consumer goods, U.S. President Trump has signaled that the administration will contest these claims vigorously. In February, the U.S. President noted that a court fight over the specific disbursement of these billions could take years to resolve, creating a period of prolonged fiscal uncertainty for both the Treasury and the private sector.
Brian Gardner, chief Washington policy strategist at Stifel, has maintained a cautious stance on the actual impact of these refunds. Gardner, known for his pragmatic analysis of the intersection between D.C. policy and Wall Street, recently noted that whatever refunds companies eventually receive "at the end of the day could be minimal" once legal fees and administrative hurdles are factored in. His view suggests that the market may be overestimating the liquidity boost these refunds will provide, a sentiment that aligns with the CFO survey’s findings that companies are not yet budgeting for a significant cash influx.
The reluctance to lower prices also reflects the permanent nature of the "trade war" costs that have already been baked into the economy. For instance, Procter & Gamble reported last year that it had to raise prices on 25% of its products to offset a $1 billion annual tariff impact. CFOs argue that even if a portion of those taxes is refunded, the structural costs of moving manufacturing out of certain regions and the inflationary pressure of the last two years make a return to pre-tariff pricing nearly impossible.
A minority of analysts, however, suggest that competitive pressures might eventually force some price concessions. If a major retailer or automaker receives a substantial refund and uses it to gain market share through aggressive discounting, others may be forced to follow. Yet, this remains a minority view. Most sell-side analysts currently expect any recovered funds to be directed toward share buybacks or debt reduction, particularly as interest rates remain elevated compared to the previous decade.
The survey also highlights that 15% of businesses are still actively passing on new tariff costs to customers, even as they litigate for refunds on old ones. This "de-stacking" of tariffs—a policy the administration introduced to prevent overlapping duties on the automotive industry—has provided some relief to companies like General Motors, which saw its 2025 tariff costs hit $3.1 billion, lower than the initial $4.5 billion estimate. However, these savings have largely served to protect corporate margins rather than trigger price cuts for the end consumer.
Explore more exclusive insights at nextfin.ai.
