When the Supreme Court ruled that tariffs were illegal, stock markets did not jump back into companies that would benefit. In February, the court invalidated the Trump Administration’s use of the International Emergency Economic Powers Act.
Tariff refund requests might top $166 billion, according to a New York Times report.
Companies like General Motors (GM) already counted on around $500 million in refunds. Levi Strauss (LEVI) estimates around $80 million in refunds.
Before the ruling, Costco (COST) took actions to get the tariff funds back. Amazon (AMZN), however, did not file a tariff refund. As a result, it earned Trump’s response, who said he was “very honored” by that decision.
Apple (AAPL) is the juggernaut that potentially found the balance between a tariff refund and appeasing the U.S. President. The iPhone supplier’s CEO, Tim Cook, will probably get a tariff refund. Cook said on the conference call that it would apply tariff refunds paid to innovation and advanced manufacturing investments in the U.S.
Retail stocks like Walmart (WMT) and Costco (COST) are mildly pricing in the tariff refund tailwind. Shares in those firms are near a yearly high. Consumers will have more cash to spend, provided that companies share some of the refund.
Still, markets are not betting that consumers would benefit. Restaurants like Domino’s Pizza (DPZ) closed near a 52-week low last week. P&G (PG) is underperforming while J&J (JNJ) stock is pulling back.
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