FedEx and UPS Pledge to Return $5 Billion in Tariff Refunds

FedEx and UPS said on Tuesday they will return roughly $5 billion in tariff refunds to the customers who originally paid the import levies, marking one of the first large-scale corporate commitments to pass through rebates following the Supreme Court's decision striking down President Donald Trump's tariffs under the International Emergency Economic Powers Act.

UPS CEO Carol Tome announced the plan during the company's first-quarter 2026 earnings presentation. "We are working with the Customs Border Protection to apply for those refunds. Our approach is to work with the U.S. government and not to sue the U.S. government," Tome said. "We think it's going to take some time before the Treasury remits money to us, but as soon as we get that money, we're going to remit it right back to our customers."

Tome said about $5 billion will become available from the tariff refunds. Both FedEx and UPS told Fortune they have begun the refund application process.

The pledge stands in contrast to the outlook offered by Treasury Secretary Scott Bessent the day after the Supreme Court ruling, when he gave bleak odds of consumers recovering any of the $166 billion in tariff revenue the government collected. "I got a feeling the American people won't see it," Bessent said.

The U.S. Customs and Border Protection launched an online refund platform for importers, the Consolidated Administration and Processing of Entries (CAPE), in April. CBP said that after it processes the first wave of applications, it will distribute payouts in about 60 to 90 days.

FedEx first said in February that it intended to issue refunds to customers who paid the tariff charges, and the company reiterated the pledge this week. "Our intent is straightforward," a FedEx spokesperson told Fortune in a statement. "If refunds are issued to FedEx, we will issue refunds to the shippers and consumers who originally bore those charges."

The two carriers took different legal routes to the same destination. FedEx was among thousands of companies that sued the Trump administration over tariff refunds, asking the government for a "full refund" on the cost of the levies, plus interest on the taxes, attorney fees, and other costs of bringing the action. UPS and DHL did not sue.

The stakes for FedEx were substantial. The company estimated last year that the levies would cost it $1 billion over the course of its fiscal year, which ends May 31.

American households bore most of the tariff burden, according to Federal Reserve data, paying for about 90% of the levies through costs passed down from importers. For e-commerce shoppers, the sting intensified after the Trump administration suspended the de minimis rule, which had exempted imports valued at $800 or less from import taxes.

The pass-through costs were often small in dollar terms but sharp enough to sting. One customer of a Canada-based fragrance oil company paid $35.75 for his order and was hit with an additional $10.80 tariff bill from FedEx when the package arrived, he told the Associated Press. "It wasn't worth the $10 tariff for a $27 purchase," the customer said.

Some consumers went to court rather than wait. FedEx customer Matthew Resier of Miami filed a proposed class action lawsuit against the shipping giant, alleging it acted as a "customs broker" and charged duties on duty-free products, including $36 in taxes and fees on a pair of German shoes. Customers of Costco and Ray-Ban-maker EssilorLuxottica filed similar actions demanding refunds.

The carriers' commitment now shifts attention to the Treasury's timeline. CBP's 60-to-90-day payout window means the first wave of customer refunds could land in the summer, but only if the Treasury remits funds to the carriers as expected — a step Bessent's own skepticism suggests is far from guaranteed.