Tariff Refunds Contribute To Record-Setting Corporate Profit Boost

U.S. corporations earned record profits in the second quarter.

Tariff refunds may be skewing economic data, making the U.S. corporate sector seem more profitable than it really is.

Companies are also raising prices without raising wages for their workforces, further contributing to the profit boom.

You may not have seen any money back after a large swath of tariffs were overturned, but corporate America got plenty of tariff refunds—and it's using them to haul in record-breaking profits.

That's according to data released Wednesday from the Bureau of Economic Analysis, which showed annualized corporate profits were $400 billion higher in the second quarter than in the first. That's the largest increase in dollar value on record, aside from the bounce-back after the most severe effects of the COVID-19 pandemic. The bottom line was boosted by an estimated $71 billion in tariff refunds companies got in May and June, according to an analysis of government data by The Tax Foundation think tank.

The data highlights how U.S. businesses are reaping the benefits of a windfall from the Supreme Court's February decision to strike down the majority of President Donald Trump's tariffs imposed in 2025. The money is going back to the pockets of companies that paid the import taxes, even though economists say most companies ultimately passed the cost along to consumers .

All those refunds are now showing up in the economic data and may be skewing it.

The refunds, along with the SpaceX IPO in June , " may have boosted profits artificially," Brian Wesbury, chief economist at First Trust, wrote in a commentary Wednesday.

Another force behind the corporate profit boom—companies are charging more for their products and services without passing the windfall along to their workers.

"The source of the profit gains is price increases," John Ryding, chief economic advisor at Brean Capital, wrote in a commentary on the profit data Wednesday. "The price deflator for nonfinancial domestic corporate profits rose 4.3% on a year-over-year basis while unit labor costs advanced by a mere 0.4%. Inflation is a problem, but labor cost pressures are completely absent."

Some of the refund money could eventually reach consumers. Several retailers have announced plans to give customers a portion in cases where customers got an actual bill for the tariffs. Amazon, for instance, said it would repay some tariffs to customers, although only in "a limited set of circumstances" where they could trace specific import charges. "When we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them," Brian Olsavsky, Chief Financial Officer at Amazon, said in a recent earnings call. "Otherwise, like other large retailers, we'll utilize refunds to continue to invest in low prices for customers."