UPS, FedEx Pursue Tariff Refunds Post-SC Ruling

Following the Supreme Court’s decision to invalidate duties imposed under the International Emergency Economic Powers Act, UPS Inc. (UPS) and FedEx Corp. (FDX) initiated tariff refund applications on Monday. The reimbursement process has the potential to restore billions of dollars to shipping companies, though customers who initially bore these costs may need to wait as long as three months for their refunds.

Key Takeaways

UPS, FedEx filing refund claims for IEEPA tariffs automatically
Refunds could take three months to reach customers
Only tariffs under emergency powers law are eligible

Market Reaction & Context

Monday trading saw UPS stock fall 1.19% while FedEx experienced a marginal 0.01% decrease as both companies initiated the intricate refund procedure¹. This development coincided with U.S. Customs and Border Protection’s introduction of its Consolidated Administration and Processing of Entries portal, enabling importers to seek reimbursement from the $166 billion amassed through these now-invalidated duties.

The reimbursements exclusively cover duties imposed under the International Emergency Economic Powers Act, which received a constitutional challenge ruling from the Supreme Court in February. Additional tariff frameworks, such as Section 232 and Section 301 assessments, continue to operate without interference from this decision.

Company Response to Refund Process

UPS announced its intention to pursue and obtain tariff reimbursements from CBP for customers whose shipments involved the company as the designated importer of record. The Atlanta-headquartered logistics company emphasized that customers need not initiate direct contact with UPS regarding this procedure.

“We remain focused on keeping shipments moving and helping ensure our customers can fully exercise their rights throughout this complex process,” UPS said in a statement¹. The logistics provider warned that customers should anticipate up to three months before receiving their refund payments.

FedEx Commitment to Customer Returns

FedEx launched parallel efforts to submit claims with CBP for tariff reimbursements, highlighting a streamlined method for transferring cost savings to customers. “Supporting our customers as they navigate regulatory changes remains our top priority,” the Memphis-based carrier said¹.

The shipping company pledged to distribute refunds to shippers and consumers who bore the initial expense once CBP completes claim processing. FedEx will automatically produce required documentation to facilitate refund applications for customers.

Broader Industry Impact

Deutsche Post AG’s DHL division also verified its commencement of tariff refund filings, implementing the process automatically for shipments where it held importer of record status¹. This synchronized industry response demonstrates the shipping sector’s determination to recover expenses from duties now considered unlawful.

During Tuesday’s appearance on CNBC’s “Squawk Box,” President Donald Trump indicated he would “remember” companies choosing not to pursue tariff refunds, introducing political considerations alongside economic factors for importers². The refund framework initially addresses approximately 63% of affected import submissions, with CBP planning expanded coverage in future phases.

Customer Impact and Timeline

Despite major shipping corporations’ commitments to transfer refunds to customers, the schedule remains undefined. CBP anticipates processing approved claims within 60 to 90 days, though companies must first receive their reimbursements before distributing them to final customers.

This refund initiative constitutes the most extensive tariff repayment program in U.S. history, involving more than 330,000 importers who paid duties on over 53 million shipments. Nevertheless, not all consumers who experienced elevated prices due to tariffs will receive direct benefits from this refund mechanism.

Not investment advice. For informational purposes only.