Most Firms Expect to Park Tariff Refunds in Cash, Atlanta Fed Finds

What The Atlanta Fed Asked And Found

If you were handed a surprise check, would you spend it or stash it? The Atlanta Fed put that question to corporate America in its August 10-21 Survey of Business Uncertainty, polling more than 1,100 C‑suite leaders. About one-fourth reported they had received a tariff refund or were applying for one, and for those companies the expected haul comes to about 1.7% of annual sales. Stanford's Nicholas Bloom and Steven J. Davis were part of the research team of economists.

How Executives Say They Will Use The Money

Among 220 executives who outlined their plans, roughly three in four said they expect to hold the funds as cash. Slightly more than half also plan to channel some of it into research and capital projects. Seventeen percent said they anticipate issuing customer rebates, and nearly 15% expect to cut prices. Respondents could choose multiple uses.

The Scale And The Shift In Flows

Refunds started in May after the Supreme Court found $166 billion in so‑called emergency tariffs unlawful. By Sept. 11, roughly $134.7 billion including interest had either been disbursed or was in the queue for processing, a filing by US Customs and Border Protection said. The flow is cooling as the Trump administration moves to restore tariff revenue under other legal authorities viewed as more durable.

Treasury paid out $33 billion in July and $10.5 billion in August, and August was the first month since repayments began when importers' duty payments topped the refunds they received. Duties imposed under the International Emergency Economic Powers Act are estimated at $166 billion, and the ultimate total of repayments, including interest, is still uncertain.

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Policy Context And Why It Matters For Your Money

The researchers said in a Monday blog post, "These results also suggest that a nontrivial portion of tariff refunds directly benefit customers and employees." A broader macro question is the share that ultimately gets to households via rebates, bonuses, or lower prices. Consumers have kept spending despite sticky inflation pressures like higher gasoline costs, so any extra push from refunds or price cuts could help extend that resilience.

This month, after a three-year gap, the Fed raised rates, arguing the step was necessary to cool inflation that has remained above target for over five years. Officials are also gauging the extent to which price pressures stem from supply disruptions, including the war with Iran, versus demand drivers like the artificial intelligence boom that has boosted capital spending and other investment.

Bottom line for your wallet: if more of these refunds become discounts, rebates, or pay, day-to-day budgets get a little breathing room. If companies mainly sit on the cash, the boost may be slower to show up in prices or paychecks.

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