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Victor Schwartz owns a small, family-run wine importer in New York, and last year he put the company’s name at the top of a lawsuit against the president. The suit went after the tariffs the president had put on under an emergency law. Schwartz saw them as a threat to the business. A family member put him in touch with a nonprofit law firm that was looking for a small company to lead the case, and he told CNN he hesitated before saying yes.
His company buys wine and spirits from 16 countries. It couldn’t just raise its prices when a tariff landed, he said, and it couldn’t just pay it either, the way a big company can write a check. By his own estimate he’d paid at least six figures in tariffs since the spring of 2025.
On February 20, 2026, he won. The Supreme Court ruled that the International Emergency Economic Powers Act, the law those tariffs were built on, doesn’t give the president the power to impose tariffs. Schwartz said he’d celebrate with an old bottle of Châteauneuf-du-Pape. He also said he didn’t mind that big companies would get their money back thanks to the risk he took, and that he was proud of it.
The money took longer. A judge ordered the customs agency to get a refund system up and running, and it built a new online portal for the claims. The refunds started going out in May. His company was one of about 330,000 businesses owed a refund. Nike was another, just a lot bigger. Nearly all of its shoes and clothes are made outside the US, so it had paid those tariffs too, on a far bigger pile of goods.
Nike’s accounting year ends on May 31. Its annual report says that in the last quarter, March through May, Nike decided it would probably get those tariffs back, so it booked the refund. That was $986 million before tax, taken off its cost of sales, which is what it pays for the products it sells. Costs went down and profit went up, and it had nothing to do with selling more shoes. The refund mostly undid the tariffs that had gone into Nike’s costs that same year.
Schwartz’s money came on May 13, CNN reported. He’d used the new portal without outside help, and the government deposited $110,000 in his account, about 95 percent of what he believes he’s owed. It was going straight to suppliers whose bills he’d put off to stay afloat. “This is our win in real terms,” he said. The receipt wasn’t itemized, so he couldn’t tell whether the interest the government owed him was in there.
Eighteen days later Nike closed its year with $302 million of its refund in the bank. The other $684 million sat in accounts receivable, the line for money other people owe a company. Usually that line is stores. This time it was the US government. Receivables jumped in a year when sales barely moved, and the filing says the jump came mainly from the tariff money still owed.
For the full year, Nike reported a profit of $3,108 million. Cash from operations, the money that came in from running the business, was $2,868 million. When profit and cash don’t match, the reason is usually on the balance sheet, the page that lists what a company owns and what it owes. If that $684 million had landed before May 31, Nike’s cash from operations would have finished the year ahead of its profit.
Money you’re owed counts in the profit when you book it, and in the cash when it lands. That’s normal accounting. It’s the same way Nike counts a sale to a store before the store pays. A ruling in February turned into $986 million of Nike’s profit before tax by the end of May, and the cash came in only as fast as the customs agency could pay it out. When profit and cash split, find what split them, and then find out when that money comes back.
Where this breaks
The filing also ties part of the jump in receivables to higher wholesale sales and the normal timing of payments, and like Schwartz’s receipt, it doesn’t say how much of the rest is which. My screener reads the profit and the cash as Nike reports them, refund and all, and it can’t pull the refund back out. Receivables are one piece of working capital, and the lesson on why profit and cash disagree goes through the other lines that pull them apart.
Some people who bought Nike shoes and clothes went to court for part of the refund. In early May they filed a proposed class action in federal court in Portland, Oregon, Reuters reported, saying Nike raised some prices last year to cover the tariffs and shouldn’t get paid back twice. CNN’s story about Schwartz’s deposit brought it up too. Nike didn’t comment, and its annual report, filed two months later, doesn’t mention the case.
The win in real terms
Schwartz paid his tariffs over most of a year and got nearly all of the money back in one deposit. He counted his win the day it hit his account. Counted the same way, most of Nike’s refund came in after May 31, so it lands in next year’s cash from operations, where it can pass for money the shoes brought in.