U.S. Companies Stash Trump Tariff Refunds as Cash... Will Liquidity Loosen Amid Rising Interest Rates?

A significant number of U.S. companies that have received or applied for tariff refunds plan to hold these funds in cash.

AP Yonhap News

On September 21 (local time), the Federal Reserve Bank of Atlanta announced that, among 220 respondents who disclosed their plans for using tariff refunds, 75.2% indicated their intention to retain the funds in cash. The Atlanta Fed conducted a "Survey of Business Uncertainty" with more than 1,100 senior business executives from August 10 to 21. Of those surveyed, about one-fourth responded that they have received or are in the process of applying for tariff refunds.

Among the respondents who shared their usage plans, 52.5% stated they would allocate the refunds to research and development or capital investment projects. Additionally, 17.2% said they planned to offer rebates to customers, while 14.8% intended to use the refunds to lower prices. Respondents were allowed to select multiple applicable uses.

The research team analyzed in a blog post that "the results of this survey suggest a significant portion of tariff refunds could provide direct benefits to customers and employees."

Bloomberg News noted that the extent to which tariff refund funds are returned to households in the form of rebates, bonuses, or price cuts could be a variable shaping the future outlook for the U.S. economy. U.S. consumers have sustained economic growth by continuing to spend despite inflationary pressures, such as rising gasoline prices. If companies use tariff refunds to give rebates to consumers or lower product prices, this could further support consumer spending.

The tariff refunds began in May after the U.S. Supreme Court ruled in February that the so-called "emergency tariffs," totaling 166 billion dollars, were illegal. According to data submitted by U.S. Customs and Border Protection (CBP) to the court, as of September 11, approximately 134.7 billion dollars, including interest, have either been paid out or processed for payment. For companies that have received or are applying for tariff refunds, the expected refund amount was found to average 1.7% of their annual revenue.

Meanwhile, as the Trump Administration moves to restore tariff revenues using other authorities with greater legal stability, the pace of tariff refunds has slowed. In August, for the first time since the Treasury Department began issuing refunds, the amount of tariffs paid by importers exceeded the amount refunded.

This content was produced with the assistance of AI translation services.