In March, shortly after the Supreme Court struck down President Donald Trump’s International Emergency Economic Powers Act (IEEPA) tariffs and paved the way for $100 billion in import taxes being redistributed back to American importers, U.S. Trade Representative Jamieson Greer shared his idea of what these companies should do with this influx of cash.
“If I were these companies, and somehow they get this windfall, the most important thing and the smartest thing they should do is give it as bonuses to their workers,” Greer told CNBC.
It appears some companies have heeded Greer’s suggestion. As businesses receive more than $100 billion the U.S. Treasury has doled out in refunds since May, many are vowing to lower prices or pay down debts. A handful, however, are giving the cash back to their employees.
In its second quarter earnings report last month, houseware brand Williams Sonoma said it would allocate $10 million for one-time payments to 401(k) accounts to eligible employees “in recognition of their efforts navigating the IEEPA tariffs.”
“We’re so appreciative to have the money back and to be able to reward our employees with part of it,” President and CEO Laura Alber said on an earnings call. “They have done such an amazing job.”
TJX, which received $331 million total in tariff refunds, will similarly put a portion of its aggregated refunds into paying employees extra.
“Due to these tariff refunds, the company accrued incremental expenses of $112 million for year-end incentive compensation and discretionary bonuses for eligible associates globally,” a spokesperson told Fortune in a statement.
American companies and consumers alike have kept a close eye on the tariff refund process, particularly after Federal Reserve research showed they were the ones shouldering the brunt of the tariff costs. While companies like Walmart and FedEx have promised to compensate consumers for tariff-related inflation through lower prices or direct rebates, the unconventional decision to hand employees cash from tariff refunds indicates just what a pervasive impact the import taxes had on U.S. companies.
“Companies have a lot of different margins for how they adjust to tariffs,” Alex Durante, senior economist at the Tax Foundation, told Fortune. “They could pass all of it along to consumers, they could also reduce investment, they could reduce hiring, they could cut back on certain employer perks and forms of compensation, if they wish. And I think that this is just perhaps another way of thinking about that.”
