FedEx just filed a lawsuit demanding refunds on tariffs paid during the first Trump administration, and if they win, it could open the floodgates for billions in claims from other companies.
The timing isn't coincidental. Days earlier, the Supreme Court issued a ruling that gives companies new grounds to challenge tariff payments. FedEx is testing that ruling immediately, and they won't be the last.
Here's the backstory:
During Trump's first term, the administration imposed tariffs on hundreds of billions of dollars worth of goods from China and other countries. Companies paid those tariffs under protest, with many filing legal challenges arguing the tariffs exceeded presidential authority or violated trade agreements.
Those cases have been slowly working through the courts for years. Now the Supreme Court has clarified that companies have stronger legal grounds to seek refunds if tariffs were improperly imposed.
FedEx's lawsuit argues they were forced to pay tariffs on goods that shouldn't have been subject to those levies in the first place. The company hasn't disclosed the exact refund amount they're seeking, but given FedEx's scale and the volume of international shipments they handle, it's likely substantial.
Why this matters beyond FedEx:
Tariffs during the first Trump administration collected an estimated $80-100 billion from U.S. companies and importers. Not all of that is legally contestable, but a meaningful chunk could be.
Retailers, manufacturers, and logistics companies all paid tariffs under similar circumstances. If FedEx succeeds, expect a wave of similar lawsuits from:
Retailers: Walmart, Target, Home Depot, and other big-box stores paid tariffs on consumer goods imported from China. Even a partial refund would be a material windfall.
Tech companies: Apple, Dell, HP, and others paid tariffs on components and finished electronics. They've been lobbying for tariff relief for years. This lawsuit could be a faster path than legislation.
Automakers: Ford, GM, and Tesla paid tariffs on imported parts and materials. Given thin margins in auto manufacturing, tariff refunds could meaningfully boost earnings.
Logistics and freight companies: UPS, DHL, and freight forwarders all paid tariffs on behalf of clients. They could reclaim those payments and potentially pass savings back to customers or keep them as profit.
The political angle:
This is awkward timing for the current administration. Trump's second-term trade policies have already caused volatility, and now companies are suing to claw back tariffs from his first term.
If these lawsuits succeed, it undermines the argument that tariffs are an effective revenue-raising tool. It also creates a precedent that makes future tariff policies easier to challenge in court.
What should investors watch?
Companies with high import volumes from China are the most exposed to potential refunds. Check earnings call transcripts and annual reports for disclosures about tariff payments and legal reserves.
Logistics companies like FedEx and UPS could see one-time earnings boosts if refunds come through. Don't confuse that with operational improvement, it's a legal windfall, not a business turnaround.
Retailers with tight margins (Walmart, Target, Costco) could see meaningful bottom-line impacts. Even a few hundred million in refunds would move the needle.
The risk:
This case could take years to resolve. The Supreme Court ruling opened the door, but it didn't guarantee victory. The government will fight these claims aggressively because billions in potential refunds are at stake.
Don't bet your portfolio on a tariff refund windfall. But if you own companies that paid significant tariffs from 2018-2020, it's worth tracking these cases. Sometimes legal wins matter more than quarterly earnings beats.
