US government refunds $81b in illegal tariffs

The US government has so far paid back $81 billion in tariffs to companies since the Supreme Court ruled in February that those tariffs were illegal, according to federal budget data disclosed on Monday.

In a 6-3 ruling in February, the Supreme Court decided that the International Emergency Economic Powers Act (IEEPA) does not grant President Donald Trump the power to unilaterally impose tariffs of indefinite scope. The decision opened the door for companies to file refund claims.

According to the Penn Wharton Budget Model, the IEEPA tariff revenue was estimated to be roughly $175 billion since Trump imposed the tariffs last year. An unnamed treasury official was reported to say on Monday that the number was in the range of $144 billion to $166 billion.

According to an April analysis by Citi, big retailers are entitled to big paybacks — Walmart was due $10.2 billion, Target was due 2.2 billion.

A Treasury Department official said most of the refunds happened in May and June, according to a report by The Guardian.

In June, the US government collected $23.6 billion in gross customs duties but paid out $49.2 billion in refunds alone — a negative customs flow of $25.6 billion for the month.

Mark Zandi, chief economist at Moody's Analytics, wrote in a note that the numbers and their effects on the economy are troubling.

"We have a year's worth of economic data since Liberation Day," Zandi wrote on Monday. "The data are definitive; the tariffs have done significant damage to the economy."

Zandi wrote that job growth has come to a standstill, with only the 693,000 added healthcare jobs keeping the hiring rate from being negative.

Last year, employers added an average 9,700 jobs per month, the lowest since 2002, outside of recession years.

While businesses are seeing some tariffs refunded, consumers are not expected to receive much payback.

"Paying those tariffs blew a giant hole in (companies') profit-loss statements, and so recapturing those duty payments is really going to be about making their businesses whole," said Jackson Wood, director of industry strategy for Descartes' Global Trade Intelligence business unit. "It's unlikely to bring much relief to the US consumer any time soon."

Though Costco and FedEx have suggested they would pass on the refunds to customers, Rohit Tripathi, a vice-president at retail planning company Relex Solutions, said that "prices are unlikely to drop in the near term".

According to a Tax Foundation analysis, since the beginning of Trump's second term, US tariff policy has changed more than 50 times. The applied tariff rate peaked in April 2025, shortly after "Liberation Day", and has fluctuated significantly since then.

The Tax Foundation estimated that the actual average effective tariff increase was 7.7 percent in 2025, up from 2.4 percent in 2024, the highest level since 1947. That's an average tax increase of $1,000 for each US household, making it the largest tax hike since 1993.

Trump had touted the tariffs as a tool to achieve multiple goals: bring back manufacturing jobs and supply chains, reduce the US trade deficit, increase government revenue and leverage tariffs as a negotiating tool in foreign relations.

The government budget data showed that the US deficit shrank a little last year, but rose again this year partially due to the tariff refund. In the first nine months of the current fiscal year starting in October, the US deficit reached $1.367 trillion, up two percent. Over $1 trillion was paid for debt interest, up 14 percent over the previous period.

The Trump administration implemented Section 122 global tariffs of 10 percent after the Supreme Court struck down the IEEPA tariffs in February. Those are set to expire on July 24, and the United States Trade Representative has indicated that it intends to use Section 301 as a principal replacement pathway to place tariffs of various rates on different countries and goods.

Section 301 authorizes the United States Trade Representative to investigate a foreign government practice that is "unjustifiable and burdens or restricts United States commerce" and to take appropriate action to remedy such a practice.