Amazon says that some customers will get back a sliver of cash from its pool of refunded money after the Trump administration’s tariffs experiment fell apart in court.
The U.S. government began refunding billions of dollars in import taxes earlier this year after the Supreme Court ruled that a huge swath of the tariffs it imposed on companies bringing in goods from abroad were illegal. While most of the refunds were issued in May and June, huge chunks of refunded cash are beginning to show up on corporate earnings reports.
“We are participating in the tariff refund process, as I mentioned earlier, [and] we received approximately $600 million in Q2,” Amazon chief financial officer Brian Olsavsky said in the company’s earnings call on Thursday. Olsavsky said the company has “identified a limited set of circumstances” in which Amazon customers shouldered the cost of U.S. tariffs and plans to issue refunds accordingly.
“When we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them,” he added. “Otherwise, like other large retailers, we’ll utilize refunds to continue to invest in low prices for customers.”
Amazon, which reported $27.5 billion in income across Q2, says that tariff refunds meaningfully reduced its expenses during the quarter but the impact could have been even bigger. On the call, Olsavsky explained that Amazon scrambled to pre-buy and pre-position inventory to reduce the impact of tariffs in advance.
Because Amazon is an online marketplace that mostly hosts other retailers, it is also “not the importer of record” for most of what it sells, meaning that other companies mostly deal with import issues and tariffs to sell on its platform. “In cases where we did see an increase in cost due to tariffs, we largely absorbed these costs rather than pass them on to customers,” Olsavsky said.
In a 6-3 decision issued in February, the Supreme Court determined that Trump lacked the legal justification to impose tariffs using a law created for national security emergencies. “They gave Congress alone . . . access to the pockets of the people,” the Supreme Court’s opinion read, reinforcing the traditional view that only Congress can authorize tariffs. “The Framers did not vest any part of the taxing power in the executive branch.”
Before the refunds, Amazon and the Trump administration butted heads around tariffs. Early on, the company reportedly considered displaying how much more expensive tariffs made products next to their online prices—a proposal that the White House called “a hostile and political act.” Amazon later said it considered adding the price transparency on Amazon Haul, its Temu competitor, but not on its main marketplace.
In May, a group of consumers filed a class action lawsuit accusing Amazon of declining to apply for tariff refunds from the U.S. government in order to “curry favor” with Trump. “The problem is that the funds Amazon is using to stay in the President’s good graces do not belong to Amazon,” the lawsuit stated. “These funds were wrongfully taken from consumers to cover IEEPA [International Emergency Economic Powers Act] tariffs that have since been invalidated.”
Companies are still figuring out what to do with their tariff refunds and how—and if—they should pass savings along to their customers. How much consumers will actually get back remains to be seen.
