Automakers are counting on $2.3 billion in US tariff refunds

Major automakers are factoring in expected refunds of U.S. tariffs, boosting their first-quarter earnings, Reuters reports.

Companies affected by U.S. import tariffs began filing claims for refunds last week—a move made possible by a U.S. Supreme Court ruling in February that struck down some of the Trump administration’s tariffs.

Importers who paid the tariffs are entitled to refunds totaling up to $166 billion. The auto industry is one of the sectors hardest hit by Trump’s tariff regime.

Several automakers have already begun reflecting expected revenue from tariff refunds totaling approximately $2.3 billion in their financial reports.

Specifically, Ford Motor informed investors that it is entitled to a $1.3 billion refund for duties the company paid under the 1977 IEEPA. General Motors expects a refund of $500 million. Mercedes-Benz also reported that it has recorded the expected refund in its first-quarter financial statements.

Despite this, automakers acknowledge that they do not know when they will receive the payments, given the uncertainty surrounding the distribution process.

GM and Ford stated that since the funds have not yet been received, they have not recognized the payments as free cash flow and will do so only after they are received.

Jeep manufacturer Stellantis announced a positive impact on the first quarter of approximately $467 million due to expected reimbursements. Meanwhile, Volkswagen CFO Arno Antlitz explained to analysts that it is too early to discuss the reimbursement.

In March, Ernst & Young noted in an advisory document that recognizing projected refunds in accounting is acceptable if companies can confirm their intention to return the funds and reasonably estimate the amount.

Companies applying for refunds risk facing a negative reaction from the Trump administration. However, these are not the only challenges facing the auto industry.

The conflict in the Middle East has driven up energy and raw material costs across all industrial sectors. Furthermore, the tariffs imposed under the IEEPA were only part of the broader U.S. tariff regime. Automakers are still facing tariffs on steel, aluminum, and other materials.

It is worth noting that the British automotive industry group SMMT is seeking clarification on whether the UK will be subject to the “Made in the EU” rule under the EU’s Industrial Accelerator Act (IAA) policy.