Tariff Rebates: ~$12Bn Back to Our Group - A Nice “one off” Offset to Energy Cos

Research evidence excerpt

Tariff Rebates: ~$12Bn Back to Our Group - A Nice “one off” Offset to Energy Cos

ve; however, that tariffs will be re-enacted in the

Jun/Jul timeframe to take the tariff rates back up to late ’25 levels via a

combination of Section 301 (China/excess capacity) and 232 (Sectoral

Tariffs i.e. Autos). Across the 25+ retailers we analyzed, we estimate a

potential tariff refund pool of approx.. ~$11-13B, or roughly 60bps of

LTM revenue group-wide, with concentrated impact in discretionary

hardlines, off-price, and home. Our Fab Five is unchanged, with

AMZN's 1P US retail alone capturing an estimated ~$2.3bn after-tax

refund, with W/SHW/ORLY/GPC each clearing $80M-$150M of after-

tax cash all else equal. Given the unique timing of the rebates, we

believe most will go into offsetting rising input costs through 2026. That

said, any ongoing reductions in effective tariff rates could be reinvested

back into sharper pricing, stronger customer value prop, enhanced

service levels, or capex to help with automation and productivity.

Dollars are fungible, and the balance between the two depends on

competition within each retail subcategory.

IEEPA: What happened & what’s coming. President Trump invoked

IEEPA on February 4, 2025 to layer "fentanyl/border" tariffs on Canada,

Mexico, and China, followed by the broader "reciprocal" tariff regime in

April 2025: a blended ~16-19% effective rate on imports from IEEPA-

affected countries that ran for roughly 11-13 months. On February 20,

2026, the Supreme Court ruled that IEEPA does not give the President

authority to impose tariffs, affirming the Federal Circuit and invalidating

both the fentanyl and reciprocal tariff orders. The industry-wide refund

pool is approximately $166B per the Court of International Trade.