Amazon Faces Lawsuit Over Alleged Tariff Refund Scheme to Please Trump
A class-action lawsuit accuses Amazon of pocketing hundreds of millions in consumer tariff refunds as a political favor to the Trump administration after the Supreme Court struck down the taxes.
A class-action lawsuit accuses Amazon of illegally keeping hundreds of millions in consumer tariff refunds and funneling the windfall as a political payoff to the Trump administration. The filing in Seattle federal court on May 15 charges the retail giant with sacrificing customer refunds to secure government favor while rivals committed to returning the money.
Consumers say Amazon charged them tariff-driven price increases, then refused to claim government refunds after the Supreme Court declared the taxes unconstitutional. The lawsuit asserts Amazon deliberately forfeited the refunds to curry favor with the White House. FedEx, UPS and DHL promised to return refunds directly to customers.
The Supreme Court ruled 6-3 on Feb. 20 that Trump's IEEPA tariffs exceeded presidential authority. The decision triggered $35.46 billion in refunds covering 8.3 million shipments. Customs and Border Protection has processed those refunds, but Amazon allegedly declined to file claims despite qualifying for hundreds of millions as importer of record for its direct sales.
A Wall Street Journal study found Amazon raised prices on 1,200 low-cost goods by 5.2 percent during the tariff period. Walmart lowered prices on those same items by nearly 2 percent. The data contradicts CEO Andy Jassy's early assertion that Amazon absorbed the costs.
"We believe that when the Trump administration voiced its admonishment, Amazon caved into its desire for favorable treatment," said Steve Berman, managing partner at Hagens Berman, the firm that filed the lawsuit. "It appears that consumers were left holding the bag in Amazon's poli-financial calculations."
The alleged political calculations trace back to April 2025, when Amazon considered displaying tariff costs on product listings. White House Press Secretary Karoline Leavitt called the transparency feature "a hostile and political act." President Trump called Jeff Bezos. Amazon dropped the feature that month. The company had donated $1 million to Trump's 2025 inaugural fund in December 2024.
Jassy told CNBC in June 2025 that Amazon had not seen prices "appreciably go up" from tariffs. By January 2026, he changed his answer. "So you start to see some of the tariffs creep into some of the prices, some of the items," Jassy said.
Sen. Elizabeth Warren questioned Amazon's pricing in a Feb. 25 letter. "Despite campaign promises to lower costs for American families 'on day one,' President Trump's sweeping tariffs have resulted in higher prices for consumers," Warren stated.
IEEPA tariffs collected approximately $166 billion from more than 330,000 importers before the Supreme Court ruling. Yale Budget Lab estimates the average household paid $1,700 in 2025. Lower-income families bore the heaviest burden.
The lawsuit follows similar actions against Nike, Costco and IKEA. Nike faces allegations it raised shoe prices $5 to $10 while paying roughly $1 billion in IEEPA tariffs. Costco CEO Ron Vachris pledged any refunds would provide "lower prices and better values" for members.
Fifteen Democratic House members sent an April 23 letter to major retailers demanding transparency on refund pass-through. "The people who actually paid these costs deserve to be front and center," said Rep. Steven Horsford of Nevada.
Amazon's alleged conduct contrasts sharply with shipping carriers FedEx, UPS and DHL, all of which committed to returning tariff refunds to customers. FedEx filed its own lawsuit seeking government refunds while promising to pass them on.
The case underscores the risks of corporate cronyism, where large companies leverage political connections to profit from government overreach. Consumers absorb the costs of unconstitutional taxes while corporations secure favorable treatment through calculated inaction.
The lawsuit seeks class certification for consumers who purchased imported products directly from Amazon between February 2025 and February 2026. Amazon declined to comment on the allegations.