Philips Secures €186M Refund of US Customs Duties

Dutch healthcare technology giant Royal Philips has secured approximately 186 million euros in refunds of US customs duties, marking one of the first major payouts following the Supreme Court’s landmark February ruling that struck down President Trump’s tariff regime. The refund, announced alongside Philips’ second-quarter results on July 27, helped drive net profit to 386 million euros, up from 240 million in the same period last year, and the company has raised its full-year outlook to reflect the windfall.

Context: The Supreme Court Strikes Down IEEPA Tariffs

The refund stems from the US Supreme Court’s 6-3 decision on February 20, 2026, in Learning Resources, Inc. v. Trump, which held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs of indefinite scope and duration. As legal analysts at Ropes & Gray explained, the ruling invalidated the tariff regime Trump had erected after returning to office in January 2025, which had targeted numerous countries and product categories. Following the decision, Trump terminated the IEEPA tariff measures and imposed replacement tariffs under Section 122 of the Trade Act of 1974.

By April 2026, approximately 56,500 companies had filed claims with US Customs and Border Protection, collectively seeking $127 billion in refunds, according to reports from Flows.be. Philips was among the first to navigate the process successfully.

A Proactive Approach Pays Off

Philips’ success in securing a swift refund was no accident. Speaking to journalists, CEO Roy Jakobs explained the company’s strategy: “When the possibility of requesting a refund of customs duties arose… we were among the first to very proactively provide all the required documents to make the request. That’s why we are also among the first to have recovered it almost in its entirety.”

As RTÉ News reported, Philips makes over 40% of its sales in North America, making it one of the European companies hardest hit by US import tariffs. The company’s transformation over the past decade from a consumer electronics maker into a healthcare technology leader—specializing in medical imaging, patient monitoring, and personal health products—left it particularly exposed to tariffs on medical equipment imports.

Q2 2026 Financial Performance

In the second quarter, Philips reported group sales of 4.4 billion euros, reflecting 4% comparable sales growth. Income from operations reached 609 million euros, including the 186 million euro tariff refund. The adjusted EBITA margin increased to 16.4%, with the tariff refund contributing approximately 4.2 percentage points. Excluding this one-time benefit, the underlying margin would have been approximately 12.2%, as the company continues to navigate cost inflation and higher replacement tariffs.

According to the official Philips press release, the company’s productivity program delivered 132 million euros in savings during the quarter, on track to achieve 1.5 billion euros under its 2026-2028 plan. Comparable order intake declined 1% year-on-year, as some large North American orders were delayed to the third quarter.

Upgraded Outlook and Market Reaction

Philips has raised its full-year guidance, reflecting the tariff refund benefit. The adjusted EBITA margin outlook was upgraded to 13.5%-14.0%, up from 12.5%-13.0%, while free cash flow guidance was increased to 1.5-1.7 billion euros from 1.3-1.5 billion. Comparable sales growth of 3%-4.5% was reiterated.

As Reuters noted, the results beat analyst expectations. However, the one-time nature of the refund and the order intake decline tempered enthusiasm. The company’s outlook explicitly excludes ongoing Philips Respironics-related proceedings, including an investigation by the US Department of Justice and state attorneys general.

Broader Implications for EU-US Trade

Philips’ success in securing a swift refund positions it as a bellwether for other European companies seeking repayment of unlawfully collected tariffs. The “proactive approach” outlined by Jakobs may encourage other firms to expedite their own refund claims.

However, the refund represents only a partial unwinding of Trump’s aggressive tariff policies. Replacement tariffs under Section 122 and ongoing tariff actions on specific sectors—including 25% tariffs on EU vehicles—mean that trade tensions remain elevated. The European Parliament approved a trade agreement with the US in June 2026 with additional guarantees, suggesting a mixed landscape of cooperation and conflict.

What’s Next

Looking ahead, the key question is how quickly other companies can replicate Philips’ success in obtaining refunds. Meanwhile, the company must navigate the ongoing impact of replacement tariffs and its unresolved legal proceedings in the US. Jakobs expressed confidence in the company’s trajectory, stating: “We largely completed the US tariff refund process during the quarter and continue to actively manage the broader macro environment, including inflation.”

With its upgraded outlook and solid operational performance, Philips appears well-positioned for the remainder of 2026—even as it navigates an uncertain trade landscape between the European Union and the United States.