US Supreme Court Rules IEEPA Tariffs Illegal, Impacting Billions in Refunds
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 20 2026
0mins
Should l Buy UPS?
Source: CNBC
- Refund Challenges: The US Supreme Court's ruling that Trump's IEEPA tariffs are illegal could lead to billions in refund requests, but trade attorneys warn that the refund process may be delayed due to court rulings and customs payment methods, creating double hurdles for importers.
- Surge in Tariff Revenue: The US government recorded $30 billion in tariff revenue in January 2026, bringing the year-to-date total to $124 billion, a staggering 304% increase year-over-year, indicating significant short-term fiscal impacts from high tariff policies, while potential refunds could exert long-term pressure on the Treasury.
- Customs Bond Issues: The rise in tariffs has escalated importers' customs bond requirements from a minimum of $50,000 to as high as $450 million, resulting in over 24,000 cases of bond insufficiencies valued at nearly $3.6 billion, highlighting the substantial cash flow impact of tariff policies on businesses.
- Complexity of Refund Process: Although tariffs are itemized, theoretically allowing for quick refunds, insurance companies require document verification, leading to expected delays of 30 to 60 days for refunds, particularly as small businesses have begun reaching out to insurers ahead of the Supreme Court decision to expedite the review process.
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Analyst Views on UPS
Wall Street analysts forecast UPS stock price to rise
19 Analyst Rating
9 Buy
9 Hold
1 Sell
Moderate Buy
Current: 97.210
Low
80.00
Averages
107.06
High
126.00
Current: 97.210
Low
80.00
Averages
107.06
High
126.00
About UPS
United Parcel Service, Inc. provides a range of integrated logistics solutions for customers in more than 200 countries and territories. Its U.S. Domestic Package segment offers a range of United States domestic air and ground package transportation services. Its air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives as well as air cargo services. Its ground network enables customers to ship using its day-definite ground service. UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments. Its International Package segment consists of small package operations in Europe, Indian sub-continent, Middle East and Africa, Canada and Latin America and Asia. It offers a selection of guaranteed day- and time-definite international shipping services. Its supply chain solutions consist of forwarding, logistics, customized third-party logistics and specialized cold chain transportation solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Impact of Middle East Conflict on UPS in 2026
- Fuel Cost Impact: While UPS's fuel costs reached $4.3 billion in 2025, accounting for only 5.3% of total operating expenses, the adjustments in fuel surcharges could allow UPS to benefit from rising oil prices, showcasing its flexibility in cost management.
- Rising Transportation Costs: In 2025, transportation purchased from third-party carriers accounted for 13.1% of UPS's costs, and with sustained increases in fuel prices, these carriers are likely to raise surcharges, leading to increased transportation costs that could impact overall profitability.
- Rerouting Cost Increases: Disruptions in key transport corridors like the Strait of Hormuz will likely elevate UPS's costs primarily through higher purchased transportation expenses, adding to the company's cost pressures in the current environment.
- Demand Destruction Risk: Global trade conflicts and resulting inflation negatively affect UPS's small and medium-sized business customers, who are already facing tariff pressures while adjusting product sourcing, potentially leading to a decline in delivery volumes and impacting future business growth.
See More
Impact of Strait of Hormuz Closure on Drug Supply Chains
- Supply Chain Risks: The closure of the Strait of Hormuz poses a significant risk of drug shortages in the U.S., particularly for generics, as nearly 47% of U.S. generic prescriptions come from India, which relies on the strait for 40% of its crude oil imports.
- Cost Pressure: Rising oil prices will directly impact drug production costs, especially for generics that operate on thin profit margins, potentially leading to higher prices and reduced accessibility for patients.
- Transport Delays: Air cargo rates from India have surged by 200% to 350%, which will extend drug transport times, with consumers likely facing shortages of high-demand medications within 4 to 6 weeks.
- Inventory Management Challenges: While manufacturers and distributors currently hold 30 to 60 days of buffer stock, once this inventory is depleted, common medications like antibiotics and diabetes drugs will face supply tightness, affecting patient treatment.
See More
Top Dividend Stocks to Hold for the Next Decade
- Stable Energy Demand: Enterprise Products Partners LP operates over 50,000 miles of pipelines, with 55% of its gross operating margin derived from NGLs, positioning it to benefit from stable energy demand over the next decade, ensuring investors receive consistent cash flow and a nearly 6% dividend yield.
- Pharmaceutical Outlook: Pfizer markets 13 blockbuster drugs, with 7 generating over $2 billion in sales last year; despite facing patent expirations, the company expects new drugs to offset revenue declines, offering an attractive dividend yield exceeding 6.4% that appeals to income investors.
- Logistics Industry Importance: United Parcel Service delivers around 20.8 million packages daily; while reducing shipments from Amazon, the company anticipates achieving higher profit margins and a more agile structure by focusing on higher-margin opportunities like healthcare logistics, with a forward dividend yield of 6.7%.
- Market Adaptability: In a rapidly changing market environment, all three companies demonstrate strong adaptability, with Enterprise and Pfizer providing stable cash flows and UPS's transformation strategy instilling long-term investment confidence for investors.
See More
JD.com Launches European Online Shopping Platform
- Market Expansion: JD.com's international online shopping brand Joybuy officially launched in six new markets, including the U.K. and Germany, on Monday, aiming to challenge Amazon and other competitors through fast delivery and high-quality products, demonstrating its commitment to global expansion.
- Logistics Advantage: Unlike competitors relying on an asset-light model, JD.com has its own local warehouses and logistics networks, enabling same-day delivery in the European market, which enhances customer experience and strengthens its competitive position.
- Membership Service: Joybuy has introduced a monthly membership service called JoyPlus, costing £3.99 for unlimited free delivery, showcasing a pricing advantage compared to Amazon's £8.99 membership fee, which could attract more customers.
- Brand Partnerships: The Joybuy platform will feature official products from brands like L'Oréal Paris and De'Longhi, reinforcing its position as a first-party retailer and aiming to enhance brand influence and customer loyalty through direct sales.
See More
UPS Faces Fuel Cost Challenges Amid Middle East Conflict
- Fuel Cost Impact: In 2025, UPS's fuel costs reached $4.3 billion, constituting 5.3% of total operating expenses, and while rising fuel prices are a concern, the company's weekly fuel surcharge adjustments could potentially enhance profit margins in a high oil price environment.
- Transportation Cost Risks: Third-party carriers accounted for 13.1% of UPS's costs in 2025, and with ongoing fuel price increases, these carriers are likely to raise surcharges, leading to higher purchased transportation costs for UPS.
- Trade Conflict Effects: Disruptions in Middle Eastern transport corridors could elevate UPS's costs, particularly as small and medium-sized business customers face dual pressures from tariffs and reduced inventory, which may negatively impact delivery volumes.
- Uncertain Future Outlook: Although UPS may navigate high oil prices, prolonged trade lane closures and persistent inflation could severely affect the company's delivery volumes and profitability, putting its stock under pressure in 2026.
See More
Analysis of Middle East Conflict's Impact on UPS
- Fuel Cost Impact: In 2025, UPS's fuel costs reached $4.3 billion, representing 5.3% of total operating expenses, yet due to adjustments in fuel surcharges, the company may benefit from rising oil prices, demonstrating flexibility in cost management.
- Rising Transportation Costs: Transportation purchased from third-party carriers accounted for 13.1% of UPS's costs in 2025, and with sustained increases in fuel prices, these carriers are likely to raise surcharges, leading to higher transportation costs that could impact overall profitability.
- Rerouting Costs: Disruptions in key transport corridors like the Strait of Hormuz will likely increase UPS's transportation expenses primarily through higher purchased transportation costs, further compressing profit margins.
- Demand Destruction Risk: Global trade conflicts and inflation negatively affect UPS's small and medium-sized business customers, who are expected to reduce inventory through 2025, potentially leading to a decline in delivery volumes and impacting market performance.
See More
Impact of Middle East Conflict on UPS in 2026
- Fuel Cost Impact: While UPS's fuel costs reached $4.3 billion in 2025, accounting for only 5.3% of total operating expenses, the adjustments in fuel surcharges could allow UPS to benefit from rising oil prices, showcasing its flexibility in cost management.
- Rising Transportation Costs: In 2025, transportation purchased from third-party carriers accounted for 13.1% of UPS's costs, and with sustained increases in fuel prices, these carriers are likely to raise surcharges, leading to increased transportation costs that could impact overall profitability.
- Rerouting Cost Increases: Disruptions in key transport corridors like the Strait of Hormuz will likely elevate UPS's costs primarily through higher purchased transportation expenses, adding to the company's cost pressures in the current environment.
- Demand Destruction Risk: Global trade conflicts and resulting inflation negatively affect UPS's small and medium-sized business customers, who are already facing tariff pressures while adjusting product sourcing, potentially leading to a decline in delivery volumes and impacting future business growth.
See More
Impact of Strait of Hormuz Closure on Drug Supply Chains
- Supply Chain Risks: The closure of the Strait of Hormuz poses a significant risk of drug shortages in the U.S., particularly for generics, as nearly 47% of U.S. generic prescriptions come from India, which relies on the strait for 40% of its crude oil imports.
- Cost Pressure: Rising oil prices will directly impact drug production costs, especially for generics that operate on thin profit margins, potentially leading to higher prices and reduced accessibility for patients.
- Transport Delays: Air cargo rates from India have surged by 200% to 350%, which will extend drug transport times, with consumers likely facing shortages of high-demand medications within 4 to 6 weeks.
- Inventory Management Challenges: While manufacturers and distributors currently hold 30 to 60 days of buffer stock, once this inventory is depleted, common medications like antibiotics and diabetes drugs will face supply tightness, affecting patient treatment.
See More
Top Dividend Stocks to Hold for the Next Decade
- Stable Energy Demand: Enterprise Products Partners LP operates over 50,000 miles of pipelines, with 55% of its gross operating margin derived from NGLs, positioning it to benefit from stable energy demand over the next decade, ensuring investors receive consistent cash flow and a nearly 6% dividend yield.
- Pharmaceutical Outlook: Pfizer markets 13 blockbuster drugs, with 7 generating over $2 billion in sales last year; despite facing patent expirations, the company expects new drugs to offset revenue declines, offering an attractive dividend yield exceeding 6.4% that appeals to income investors.
- Logistics Industry Importance: United Parcel Service delivers around 20.8 million packages daily; while reducing shipments from Amazon, the company anticipates achieving higher profit margins and a more agile structure by focusing on higher-margin opportunities like healthcare logistics, with a forward dividend yield of 6.7%.
- Market Adaptability: In a rapidly changing market environment, all three companies demonstrate strong adaptability, with Enterprise and Pfizer providing stable cash flows and UPS's transformation strategy instilling long-term investment confidence for investors.
See More
JD.com Launches European Online Shopping Platform
- Market Expansion: JD.com's international online shopping brand Joybuy officially launched in six new markets, including the U.K. and Germany, on Monday, aiming to challenge Amazon and other competitors through fast delivery and high-quality products, demonstrating its commitment to global expansion.
- Logistics Advantage: Unlike competitors relying on an asset-light model, JD.com has its own local warehouses and logistics networks, enabling same-day delivery in the European market, which enhances customer experience and strengthens its competitive position.
- Membership Service: Joybuy has introduced a monthly membership service called JoyPlus, costing £3.99 for unlimited free delivery, showcasing a pricing advantage compared to Amazon's £8.99 membership fee, which could attract more customers.
- Brand Partnerships: The Joybuy platform will feature official products from brands like L'Oréal Paris and De'Longhi, reinforcing its position as a first-party retailer and aiming to enhance brand influence and customer loyalty through direct sales.
See More
UPS Faces Fuel Cost Challenges Amid Middle East Conflict
- Fuel Cost Impact: In 2025, UPS's fuel costs reached $4.3 billion, constituting 5.3% of total operating expenses, and while rising fuel prices are a concern, the company's weekly fuel surcharge adjustments could potentially enhance profit margins in a high oil price environment.
- Transportation Cost Risks: Third-party carriers accounted for 13.1% of UPS's costs in 2025, and with ongoing fuel price increases, these carriers are likely to raise surcharges, leading to higher purchased transportation costs for UPS.
- Trade Conflict Effects: Disruptions in Middle Eastern transport corridors could elevate UPS's costs, particularly as small and medium-sized business customers face dual pressures from tariffs and reduced inventory, which may negatively impact delivery volumes.
- Uncertain Future Outlook: Although UPS may navigate high oil prices, prolonged trade lane closures and persistent inflation could severely affect the company's delivery volumes and profitability, putting its stock under pressure in 2026.
See More
Analysis of Middle East Conflict's Impact on UPS
- Fuel Cost Impact: In 2025, UPS's fuel costs reached $4.3 billion, representing 5.3% of total operating expenses, yet due to adjustments in fuel surcharges, the company may benefit from rising oil prices, demonstrating flexibility in cost management.
- Rising Transportation Costs: Transportation purchased from third-party carriers accounted for 13.1% of UPS's costs in 2025, and with sustained increases in fuel prices, these carriers are likely to raise surcharges, leading to higher transportation costs that could impact overall profitability.
- Rerouting Costs: Disruptions in key transport corridors like the Strait of Hormuz will likely increase UPS's transportation expenses primarily through higher purchased transportation costs, further compressing profit margins.
- Demand Destruction Risk: Global trade conflicts and inflation negatively affect UPS's small and medium-sized business customers, who are expected to reduce inventory through 2025, potentially leading to a decline in delivery volumes and impacting market performance.
See More
