Tariff refunds lift earnings ahead of next U.S. phase
Embraer booked R$358.6 million in tariff refunds in the second quarter
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Tariff refunds boosted second-quarter results at companies with operations in the United States, but the next phase of the reimbursement process has been delayed by the U.S. Customs and Border Protection (CBP) and is now set to begin in early October. Billions of dollars are at stake.
In Brazil, traditional exporters to the U.S. have largely avoided commenting on the issue, but the sums involved are also significant, reaching hundreds of millions of reais.
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Jet maker Embraer booked R$358.6 million in second-quarter results related to the recovery of import duties. Combined with the exemption of aircraft and parts from the latest round of U.S. tariffs, the refunds prompted the company to raise its expected profit margin for the year, XP said in a report to clients. Contacted by Valor, Embraer declined to comment.
Taurus recognized R$91.1 million in refunds during the period, nearly the full amount it had requested.
“From the outset, we believed there could be a Supreme Court victory over the tariff’s unconstitutionality,” said Salesio Nuhs, CEO of the firearms manufacturer. “So we began gathering the documentation so we would have it ready when the time came.”
The process was easier for Taurus because it exports to a U.S. subsidiary, which filed for the refund, Nuhs said. The United States is the company’s main market, accounting for more than 80% of its firearms sales.
Taurus products were not included in the exemptions from the tariff package and were subject to a 50% rate — consisting of the 10% “reciprocal” tariff imposed in April 2025 and an additional 40% surcharge introduced in August — until the U.S. Supreme Court struck down the tariffs in February. The court ruled on Feb. 20 that the International Emergency Economic Powers Act did not authorize the president to impose the tariffs.
J.P. Morgan recently highlighted the potential upside from refunds for another Brazilian company, WEG. The bank estimates the company could receive between R$170 million and R$230 million, equivalent to as much as 9% of its projected third-quarter EBITDA.
The Santa Catarina-based electric motor manufacturer was initially subject to the 10% tariff and later to the additional 40% surcharge. Some products were subsequently exempted, while others remained subject to the maximum rate.
Billion-dollar refunds
In the U.S., tariff reimbursements have generated multibillion-dollar gains for some companies.
Walmart, one of the country’s largest importers, received $2.9 billion in refunds during the quarter, boosting the retailer’s earnings and gross margin. The giant retailer said the amount represented substantially all the refunds it had requested.
Apple did not disclose a figure, but analysts estimated its reimbursement at about $2.2 billion.
Valor obtained a filing submitted in February by pulp and paper producer Suzano and two subsidiaries, just days after the Supreme Court ruling. The companies asked the U.S. Court of International Trade to order CBP to “reliquidate” imports that had been subject to the tariffs and process the corresponding refunds.
Reliquidation process
Reliquidation involves reopening an import entry that has already been finalized, or liquidated, so the duties assessed on it can be recalculated.
The U.S. Court of International Trade ordered CBP to reliquidate imports subject to the tariffs, including entries whose liquidation had already become final. The government appealed that broader order, and the case remains pending before the U.S. Court of Appeals for the Federal Circuit.
The Donald Trump administration argues that CBP lacks the legal authority to reopen a finally liquidated entry on its own and must instead act under a court order, such as the one sought by Suzano.
A CBP representative told the Court of International Trade that the next phase of the refund process will cover imports whose reliquidation has been ordered by a court.
Originally expected to begin in August, the phase was postponed while CBP adapted its refund-processing system. The agency now plans to launch it on Oct. 6 for eligible importers covered by court-ordered reliquidation.
“There are some people in Washington who are apprehensive about the possibility that CBP may be changing its mind about this phase. I don’t think that’s true. I believe CBP is acting in good faith, and I say that because this entire process is being conducted through the courts [the Court of International Trade],” said Matthew McConkey, a partner at U.S. law firm Mayer Brown, which is associated with Brazil’s Tauil & Chequer.
Brazilian claims
Suzano’s filing does not specify an amount. Brazilian pulp exports were subject to the 10% tariff before the product was exempted in September.
Neither Suzano nor WEG has publicly said it filed for reimbursement with U.S. customs authorities. Contacted by Valor, both companies declined to comment.
William Roberto Crestani, a tax partner at law firm Pinheiro Neto Advogados, said that, without naming companies, he has heard of other Brazilian businesses that have already secured refunds and others that are still pursuing reimbursement. He cited the machinery, steel and pulp and paper industries.
In addition to CBP’s postponement of the next phase, Crestani said some refunds have been held up by practical issues such as missing bank information.
Although few companies have publicly discussed the matter, Brazilian machinery industry association Abimaq Chair José Velloso said he believes several of its members are exercising their right to seek reimbursement in the U.S.
Valor contacted companies in those industries, but none commented. The Brazil Steel Institute also declined to comment.
Brazil’s National Confederation of Industry said it did not have enough information to address the issue, while the Brazilian Association of Publicly Held Companies (Abrasca) said it does not compile data on individual overseas transactions by its members. The Ministry of Development, Industry, Trade and Services did not respond.
