House Democrats are intensifying pressure on United Parcel Service Inc. (NYSE: UPS) to disclose how any tariff refunds obtained from the U.S. government will be passed along to customers. In a letter dated April 23, lawmakers addressed UPS CEO Carol Tomé, along with executives at FedEx, DHL, and several major retailers, demanding clarity on the matter ahead of UPS's first-quarter earnings report on April 28.
Supreme Court Ruling Opens Refund Path
The scrutiny follows a Supreme Court decision that invalidated certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA), a statute typically reserved for national-security cases. This ruling has created a fresh refund pathway through U.S. Customs and Border Protection (CBP), allowing businesses to reclaim duties paid on specific imports. UPS has clarified that these refunds apply strictly to IEEPA tariffs from 2025 and exclude all other duties, taxes, or fees.
UPS's Refund Process and Customer Impact
UPS has stated that it will pursue eligible refunds from CBP for customers where the company acted as the importer of record—the entity responsible for customs filings. For these customers, UPS says no action is required on their part, but refunds cannot be processed until the company actually receives the money from the government. The company has not disclosed the total dollar amount it expects to recover. According to CBS News, a UPS spokesperson confirmed this week that the company is submitting claims via CBP's CAPE portal, the federal online system for refunds. Once claims are approved and paid, UPS will reimburse customers who originally covered the levies.
Lawmakers Demand Transparency
In their letter, Democratic lawmakers pressed Tomé and other CEOs for written answers by May 22, demanding details on how tariff costs were booked, whether consumers or suppliers ultimately bore the burden, and whether companies would commit to not using any refunds for executive compensation or share buybacks. The letter warned that without transparency and accountability, refunds could remain on corporate balance sheets rather than reaching consumers hit with higher prices.
FedEx and DHL, also named in the House letter, have both told CBS that they intend to route refunds back to whoever originally paid the tariff. This is critical for shippers, who typically cover duties on cross-border packages upfront before invoicing either recipients or the original senders.
Complexities and Timelines
The refund process is not straightforward. UPS notes that the initial phase is limited to specific pending entries and certain tariff payments made since January 30, 2026. CBP has indicated that refunds will take at least 60 to 90 days after a request is filed. UPS adds that administrative, brokerage, or disbursement fees will not be refunded. Tracking consumer relief is also challenging. Robert Shapiro, a partner at Thompson Coburn specializing in international trade, told Investopedia that consumers will not see this refund directly. Syracuse University law professor Gregory Germain noted that it is difficult for buyers to know exactly what portion of their payment covered a specific tariff.
Earnings and Strategy
The refund dispute comes just ahead of UPS's first-quarter earnings, scheduled for release on April 28. That morning, CEO Tomé and CFO Brian Dykes will host a call with investors, offering an opportunity to address questions about trade turmoil, costs, and demand. Meanwhile, UPS is advancing other initiatives. Earlier this month, the company announced that its Happy Returns service now covers 10,000 U.S. drop-off spots, placing 79% of Americans within a five-mile radius of a Return Bar. UPS has also invested over $100 million in RFID technology, enabling automatic package sensing without manual scanning.
Market Context
U.S. markets were closed on Saturday. As of the most recent Friday close, UPS shares were trading at $107.02, while FedEx closed at $387.98. The broader market context includes ongoing trade policy uncertainty and its impact on logistics and retail sectors.
