U.S. Companies Receive $71 Billion in Tariff Refunds

U.S. Customs and Border Protection issued $49.2 billion in tariff refunds in June, according to the U.S. Treasury monthly statement. The payments brought the cumulative total to about $71 billion, or more than 60 percent of the $166 billion available after the Supreme Court struck down tariffs under the International Emergency Economic Powers Act in February.

Companies receiving the refunds said the money is being applied to higher costs linked to the Iran conflict. A McCormick & Company CFO stated that the majority of its $31 million refund will offset elevated expenses. The company had raised prices twice in the past year due to tariffs and limited freight capacity.

Financial Officer Steve Schmitt said the company expects continued pressure on commodity costs. The company's CEO noted that the Iran conflict and higher gas prices have reduced consumer discretionary spending and convenience-store visits. Wholesale inflation declined last month as energy prices fell, but renewed tensions at the Strait of Hormuz have raised concerns about future price increases.

Goldman Sachs chief U.S. economist David Mericle warned that oil above $100 per barrel could add 3 to 4 basis points to monthly core inflation.

President and CEO Bob Eddy said tariff refunds would help reduce consumer prices by half a percent. Other firms are increasing supply-chain flexibility or pausing spending to address uncertainty, according to Rebecca Homkes of the London Business School.

Section 122 tariffs are scheduled to expire later this month, and Section 301 tariffs apply only to goods from certain countries. Homkes said these narrower measures are less likely to match the scale of the earlier IEEPA tariffs.