<\/p>\n
America\u2019s top retailers and manufacturers are getting long-awaited relief from President Donald Trump\u2019s sweeping global tariffs. But for some of the hardest-hit companies, the share price benefits pale in comparison with the massive losses they suffered on Liberation Day.<\/p>\n
When Trump\u2019s tariffs were announced in April 2025, they dealt the S&P 500 its worst day in five years. Investors had expected refunds, which started trickling in this summer after the Supreme Court struck the levies down, to provide a meaningful tailwind, yet stock reactions to the refunds have largely been muted.<\/p>\n
And any boost that equities got from these cash infusions is likely to quickly fade, just as a trade spat between the US and Canada reignited in recent weeks.<\/p>\n
In the latest tit-for-tat, Canada imposed tariffs of up to 50% on hundreds of US products in response to a similar move by the US last month.<\/p>\n
With trade tensions flaring up again, Wall Street strategists are in no rush to price out the costs baked in under the Trump administration\u2019s policies.<\/p>\n
Read:
Trump\u2019s \u2018erratic\u2019 tariffs hurt economy, house Democrat says
Trump delays Canada tariffs at last minute after tentative deal
Trump rebuilds tariffs with new levies on 60 economies<\/p>\n
\u201cThese are non-recurring, they\u2019re not operating revenue and investors will discount that when making judgements on a company\u2019s earnings,\u201d said Marshall Front, chief investment officer at Front Barnett.<\/p>\n
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\u201cSure, it\u2019s free money but it\u2019s not likely to happen again.\u201d<\/p>\n
The companies receiving the checks include a mix of small, mid and large-cap stocks concentrated in import-heavy industries like retail, industrials and electronic hardware.<\/p>\n
Target Corp, Walmart Inc, Nike Inc and Starbucks Corporation are among those seeing a boost from the cash infusion. Industrial companies like Caterpillar Inc and electronic component manufactures like Applied Optoelectronics Inc are also among beneficiaries.<\/p>\n
Nike\u2019s stock sank 14% on April 3, 2025, the day after Liberation Day, to its lowest level since November 2017. Fast-forward over a year later, the stock only briefly bounced before retreating after the athletic footwear giant said during a June 30 earnings call it expected to collect nearly $1 billion in tariff refunds.<\/p>\n
The cash infusion, which wasn\u2019t taken into account in earlier guidance, will help offset the company\u2019s cost of sales, according to the earnings call.<\/p>\n
Similarly, Starbucks declined 11% after the tariff announcement, the most since May 2024. The company\u2019s shares were muted after its third-quarter earnings print this year, rising just 1.6% as it disclosed refunds that offset other tariffs it had incurred throughout the fiscal year, according to a company statement.<\/p>\n
Read: Nike, Adidas call tariffs \u2018catastrophic\u2019 in letter to Trump<\/p>\n
\u201cThe question about what future tariffs will look like is dramatically more important to the health or pain of the business than the difference between adding cash to your balance sheet from tariff refunds versus adding it from generated income,\u201d Guggenheim Securities analyst Simeon Siegel, who covers Nike, said.<\/p>\n
Since the Supreme Court ruled in February that levies under the International Emergency Economic Powers Act were illegal, roughly $100 billion had been sent to the US Treasury for disbursement as of the end of July, based on data collected from the US Customs and Border Protection.<\/p>\n
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Some 88 companies discussed tariff refunds in the most recent quarter, with receipts estimated to be at least $15 billion, based on calculations by Bloomberg Intelligence. More are likely on the way.<\/p>\n
\u201cThere\u2019s little reaction now because the markets and analysts priced this in when the ruling came out,\u201d said Eric Sterner, chief investment officer at Apollon Wealth.<\/p>\n
\u2018A lottery ticket\u2019<\/p>\n
For some of the smaller companies, the refunds have provided a substantial boost to earnings, greatly improving margins and overwhelming other metrics. But for market strategists, this masks a company\u2019s real performance. Once the checks are in, companies are left with the same underlying businesses.<\/p>\n
\u201cAnalysts and investors are smart and will look through those earnings and take them out when they calculate the profitability,\u201d Front said.<\/p>\n
That was the case with Best Buy, which saw its shares tumbling even after it reported an improved full-year outlook in its recent results. With much of the improvement driven by a $34 million tariff refund, investors were sceptical about how long it would last.<\/p>\n
\u201cThe refund in and of itself, without contemplating the future tariff cost, is no different than the company winning a lottery ticket,\u201d Siegel said. \u201cIt doesn\u2019t make the business a better business, it just gives it more cash.\u201d<\/p>\n
Still, some long-term benefits are possible depending on how the cash is used.<\/p>\n
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\u201cSome of these tariff refunds will be used for paying dividends to shareholders and doing buybacks,\u201d Apollo Management Partner Torsten Slok said. \u201cBut some of the money will also be invested in capex such as AI.\u201d<\/p>\n
Although more checks may arrive in future quarters, the looming threat of additional duties is obscuring any lasting stock gains. The market has adjusted to a higher cost environment, adding to a belief that tariffs are here to stay.\u00a0<\/p>\n
Read:
US escalates Canada trade war with product bans, new tariffs
Canada to unveil Trump tariff response including loans, benefits
US set to cut tariffs on Canada metals, autos in trade deal<\/p>\n
New and threatened tariffs include a 50% tax on roughly $20 billion worth of Canadian goods, an order for 15% tariffs on imported polysilicon used in semiconductors, and a 10% to 12.5% levy on most major trading partners under a forced labour investigation.<\/p>\n
Trump has also pledged to double automobile duties on Canadian vehicles and parts after trade talks between the two countries broke down.<\/p>\n
\u201cThe Street is not giving very much credit to companies for large Ebitda beats on tariff refunds because this refund will then have to be lapsed next year,\u201d said Piper Sandler & Co analyst Peter Keith. \u201cIt helps 2026, but there\u2019s no impact in 2027.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Nike #Starbucks #tariff #relief #stocks #fleeting<\/p>\n","protected":false},"excerpt":{"rendered":"
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