Target received nearly $1 billion in tariff rebates from the U.S. government
The American retail chain Target received $994 million in pre-tax tariff refunds from the U.S. government. This helped double the company’s operating profit in the second quarter—from $1.3 billion last year to $2.6 billion, according to BBC News.
The refund was made possible by a U.S. Supreme Court ruling that struck down a series of import tariffs imposed by President Donald Trump. Target has become one of many large and small companies receiving refunds for goods imported into the United States.
In early August, U.S. customs authorities stated in a court filing that the Trump administration had refunded $100 billion to businesses that had been charged under the so-called “Liberation Day” tariffs. This represents about 60% of all tariff revenue collected by the government under this policy. A significant portion of the funds has yet to be refunded.
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At the same time, Trump continues to impose tariffs on goods imported into the U.S. using other legal mechanisms. The president also announced a three-day delay in the imposition of new import duties on a number of Canadian goods amid negotiations on a trade agreement. He had threatened to impose a 50 percent tariff on nearly $20 billion worth of Canadian imports.
Target CFO Jim Lee did not specify how the company would use the refunded funds, but noted that it would continue to invest in pricing. The retailer is seeking to reduce its reliance on purchases from China: 30% of Target’s private-label products come from that country, down from 60% in 2017.
The company is implementing a transformation plan and reported that it lowered prices on more than 10,000 products over the past year. Separately, cosmetics company Estée Lauder reported a $38 million positive impact from tariff refunds in its quarterly results.
