Good morning. For corporate America, tariffs have shifted from policy experiment to structural reality. The Supreme Court’s ruling on the International Emergency Economic Powers Act (IEEPA) may open the door to refunds, but it also resets the rules yet again.
Companies like FedEx sued for a full refund following the court’s decision, and Costco sued before the ruling. But beyond those headline cases, what are companies thinking about potential refunds?
KPMG shared with CFO Daily the early findings from its upcoming tariffs study, based on a survey of 300 U.S.-based C-suite and business leaders at organizations across sectors with annual revenues above $1 billion. Executives are divided on how to handle possible refunds and are reluctant to roll back prices even if costs ease.
For importers, the core issue is what to do if refunds materialize, Lou Abad, a principal in KPMG’s Washington National Tax, Trade and Customs Services group, told me. The importer of record pays duties and would receive any refund, raising questions about whether and how to share that value with customers or suppliers.
“It’s pretty murky how the importers will get the refunds,” Abad said. He continued, “So it’s really important for companies to take the necessary steps to preserve their right to refunds.” He stressed using administrative tools, such as protests and post-summary corrections, to keep claims alive. Those steps, he explains, may be required to secure “a day in court” if companies ultimately litigate in the Court of International Trade and other courts, especially given the volume of entries and the government’s potential reluctance to pay.
That complexity helps explain why about half of the respondents plan to work with third parties, such as law firms, to facilitate reimbursements and coordinate protests and potential litigation.
If refunds arrive, companies say they would most likely reinvest in supply chain diversification, resilience, working capital, or inventory. Some may share funds with trading partners where tariff-sharing agreements exist, Abad said. But many contracts never contemplated refunds. In those cases, whether to pass money downstream or treat it as a windfall will likely be decided case by case, particularly as the administration signals new tariffs under other legal authorities, he said.
Another key survey finding is how few companies plan to reverse earlier price hikes. Thirty-four percent would implement a partial rollback, 30% would use temporary promotional pricing, and just 18% would fully remove prior surcharges. Abad attributes this to the familiar “stickiness” of prices: once a company raises prices to accommodate inflation or a cost shock like tariffs, it can be difficult to roll them back, and those higher levels often become the new floor.
That stickiness is reinforced by policy signals. With the administration considering additional tariff actions, companies see little reason to reset prices downward only to face another round of cost increases, he said.
For CFOs and senior leaders, tariffs are less a discrete risk event than a structural feature of the landscape. As Abad sees it, what’s changed is not their presence but the volatility around rates, exemptions, and overlapping measures. This creates what Abad describes as a “revolving goal” for companies: tracking shifting rates, managing stacked tariffs under different authorities, and determining which rules apply to each shipment.
“I think most companies are just waiting for guidance from the Court of International Trade and other authorities to see how this refund process will play out,” Abad said.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Neha Krishnamohan was appointed CFO and chief business officer at Latigo Biotherapeutics, Inc. (Latigo), a clinical-stage biopharmaceutical company. Krishnamohan brings more than 15 years of experience. Until recently, she was the audit committee chair on Latigo’s board of directors. Before her appointment at Latigo, Krishnamohan most recently served as CFO and EVP of corporate development at Artiva Biotherapeutics, Inc. She also previously served as CFO and EVP of corporate development at Kinnate Biopharma Inc.
Amit Sripathi was promoted to CFO of Wyndham Hotels & Resorts, Inc. (NYSE: WH), effective immediately. Sripathi succeeds Kurt Albert, who has served as interim CFO since November. Sripathi joined Wyndham in 2021 and has served in a variety of leadership roles at the company, most recently as chief development officer of North America. Before Wyndham, Sripathi was with RLJ Lodging Trust, responsible for capital markets and corporate finance.
Big Deal
Resume Now’s AI Pay Preference Report finds that AI is beginning to shape job choices. Sixty-seven percent of U.S. employees surveyed said they are more likely to accept a job at a company that uses AI in pay decisions.
However, most are comfortable with AI having some influence, not full control, and they still expect managers to make the final call when disputes arise. Forty-two percent of respondents would allow AI to determine up to 25% of their total compensation, while 39% would allow it to decide up to half.
Another key finding is that a majority (90%) said they are at least somewhat comfortable with AI influencing pay. And 96% would support AI in compensation decisions if it guaranteed competitive, market-based pay.
However, there’s more trust in managers regarding compensation decisions (59%), while 34% trust AI systems more and 7% are unsure.
The findings are based on a survey of 884 U.S. workers.
Going deeper
"Goldman Sachs vice chair on the hidden trap of senior management: ‘Pretty soon the bosses are no longer watching you’" is a Fortune article by Nick Lichtenberg.
"For many ambitious professionals, climbing the corporate ladder is the ultimate goal," he writes. "But according to Rob Kaplan, vice chairman of Goldman Sachs, reaching the upper echelons of management comes with a dangerous, often unseen pitfall: a sudden lack of supervision." You can read more here.
Overheard
“The need to work will go away.”
—Billionaire investor Vinod Khosla said in an interview with Fortune Editor in Chief Alyson Shontell on the Titans and Disruptors of Industry podcast. He predicts a future where labor is free and jobs are optional, as AI will be capable of performing 80% of all jobs. “People will still work on the things they want to work on, not because they need to work," Khosla said. His venture capital firm, Khosla Ventures, was one of OpenAI’s first institutional investors.
