Key Takeaways
- The Supreme Court’s ruling that IEEPA tariffs were unlawful has delivered large refunds to enterprise brands like Apple, Nike and FedEx, strengthening their earnings and pricing flexibility.
- Smaller and mid-size e-commerce sellers still carry the financing burden of tariffs long before any refund arrives, widening the competitive gap with global brands.
Tariff refunds are becoming a balance-sheet advantage for large brands, but for many online brands, the story is less about refunds and more about cash flow.
Enterprise brands can recover millions and strengthen earnings, while smaller and mid-size e-commerce businesses often bear the financing burden of tariffs long before any reimbursement arrives. The result could be an even wider competitive gap between global brands and marketplace-native brands.
A recent Wall Street Journal story outlined that companies from Nike to Apple to FedEx have recorded hundreds of millions in refunds for tariffs struck down by the Supreme Court. Apple’s $2.2 billion in refunds, for instance, contributed 11 cents per share to recent earnings. Nike has recorded nearly $1 billion, FedEx roughly $800 billion, and GM $500 billion.
Why The Supreme Court Ruled the IEEPA Tariffs Were Unlawful
The refunds stem the Supreme Court ruling in February that the Trump Administration’s use of the International Emergency Economic Powers Act (IEEPA) does not give the president authority to impose tariffs to impose new tariffs. The tariffs—first placed on imports from Canada, Mexico, and China eventually expanded to most trading partners under a separate emergency declaration tied to large U.S. trade deficits— was notable because no prior president had used IEEPA to impose tariffs.
Importers challenged the tariffs in court, arguing that IEEPA lets a president regulate or block imports during a national emergency, but does not explicitly authorize tariffs. In 2025, lower courts agreed and held that the law did not permit these tariff actions, though those rulings were stayed while appeals continued, so the tariffs remained in effect temporarily. The Supreme Court affirmed those rulings, reasoning that the statutory power to “regulate” imports is not the same as the power to tax or levy tariffs, and that when Congress delegates tariff authority, it normally does so clearly and explicitly.
Why Mid-Size and Smaller Brands May Still Struggle
That decision invalidated the IEEPA-based tariffs. As a result, importers who paid them became potential candidates for refunds of tariff money already collected, although the Court did not itself set out a refund process. After the ruling, the administration ended various IEEPA tariff actions and looked to other trade authorities for replacement measures.
The immediate beneficiaries are large importers that survived long enough to collect refunds. For marketplace brands, this means competing against larger companies that may now have better pricing flexibility and greater inventory depth
Many e-commerce sellers and digitally native brands have been impacted more broadly as these small businesses operate with thin margins, limited working capital, a heavy dependence on China or Asia-based sourcing and short inventory cycles. For a $20 million SMB brand, the tariff increase has tied up hundreds of thousands of dollars in inventory costs long before any potential refund materializes.
Why Tariffs Create A Bigger Cash-Flow Problem for E-Commerce Brands
Trade and economic policy expert Deborah Elms noted “Many smaller firms went under while they struggled to cope with unexpected changes in their business models and cash flows driven by rapid, large, and constantly changing tariff policies. Other firms are still waiting for their refunds.”
Additionally, tariff changes are set to continue with uncertain rates, coverage, and timelines for implementation.
“Companies are still paying tariffs under differing legal authorities,” said Elms. “In addition to 10-12.5% global rates for imports from 60 countries, many products like those containing metal are subject to even higher tariff costs.”
What the Prosper Audience Should Know
The outlook for smaller online brands isn’t defined by tariffs alone. The e-commerce sector was built by entrepreneurs who found ways to sell, source and scale outside traditional channels, and that same resourcefulness holds today.
Growing brands have access to a wide community of sellers, marketplaces and industry resources that share what works and what doesn’t. Through education, shared experience and a willingness to adjust sourcing, pricing and inventory strategy, smaller brands can respond to shifting trade policy rather than wait on it. The challenges are real, but so is the network built to help brands work through them.
Stay tuned for further coverage of this and other timely topics.