Graco and Newell Brands profited twice on tariff costs, new class action lawsuit claims

Ohio resident Kelsey Perica filed a class action lawsuit against Graco Children's Products Inc. and its parent, Newell Brands Inc., on July 6, 2026. The suit alleges the companies raised baby product prices to cover federal tariffs and now stand to collect government refunds for those same tariffs after the Supreme Court ruled them unlawful without returning the money to shoppers.

The price increases behind the lawsuit

Perica says she bought a Graco TrioGrow SnugLock 3-in-1 car seat at Walmart on Feb. 2, 2026, paying $169. The company reportedly manufactures most of its products overseas, largely in Asia.

After President Trump invoked the International Emergency Economic Powers Act in February 2025 to impose tariffs, the government levied roughly 25% duties on many imports from Canada and Mexico and added tariffs on Chinese goods. Graco and Newell paid at least $174 million in tariff costs in 2025, the complaint claims, citing the companies' own earnings-call statements.

The companies reportedly offset these by raising prices on their baby products by about 20% across three rounds of increases tied to the tariffs.

The lawsuit cites Federal Reserve research, including a Dallas Fed study describing the 2025 tariffs' pass-through to consumers as "effectively complete," meaning shoppers bore nearly the full weight of the duties.

The Supreme Court ruling on the tariffs

On Feb. 20, 2026, less than three weeks after Perica's purchase, the Supreme Court ruled in Learning Resources, Inc. v. Trump that IEEPA does not authorize the president to impose tariffs, invalidating the orders. Importers that paid the duties, including Graco and Newell, became eligible for refunds from U.S. Customs and Border Protection.

A related order from the U.S. Court of International Trade in Atmus Filtration, Inc. v. United States directed CBP to stop collecting the duties and refund what importers already paid. CBP estimated an unprecedented volume of refunds, potentially 53,173,939 across 330,566 importers nationwide.

Graco allegedly set to recover costs twice

The proposed class action claims the companies will recover the same tariff costs twice: once from shoppers through higher prices and again from the government through refunds. Graco and Newell have made no binding commitment to return any of those refunds to the consumers who paid the elevated prices, the complaint says, describing the arrangement as a "windfall."

In their 2025 earnings calls, the companies characterized the price increases as a necessary response to tariff-driven cost increases, according to the lawsuit. Neither Graco nor Newell has publicly responded to the lawsuit.

The legal claims

The lawsuit brings three claims on behalf of the proposed class:

  • Unjust enrichment, the principle that a party should not benefit unfairly at someone else's expense
  • Money had and received, a common-law claim used to recover money that rightfully belongs to the person who paid it
  • Declaratory relief, asking the court to declare that keeping tariff refunds tied to costs consumers already paid is unlawful

The class action lawsuit seeks restitution, disgorgement of profits and a court order barring the companies from keeping the funds, as well as damages and attorneys' fees.

What the case means for Graco and Newell shoppers

The proposed class covers people across the United States who bought Graco or Newell goods during the period the companies raised prices over tariffs. The complaint estimates the class could include millions and estimates the amount in controversy at more than $5 million, though it does not set a total damages figure, which is typical this early. Before the case can move forward, the court must certify it as a class action.

For now there is no settlement, no claims process and no payout available, and nothing has been proven in court.