The Supreme Court struck down Trump’s tariffs. Now comes the hard work of issuing refunds

Supreme Court Tariff Ruling Leaves $133 Billion Refund Question Unanswered

The Supreme Court on Friday struck down President Donald Trump’s widespread tariffs imposed under emergency powers, creating massive uncertainty about the fate of $133 billion already collected from importers.

In a decisive 6-3 ruling, the court determined that Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose double-digit tariffs on imports from most countries exceeded presidential authority. The court affirmed that the power to tax imports belongs to Congress, not the executive branch.

The decision has sent importers scrambling to understand how—and when—they might recover billions in tariff payments now deemed unlawful. Legal experts anticipate a complex and potentially chaotic process ahead.

“It’s going to be a bumpy ride for a while,” said Joyce Adetutu, a partner at the Vinson & Elkins law firm. “The amount of money is substantial. The courts are going to have a hard time. Importers are going to have a hard time.”

Justice Brett Kavanaugh highlighted this uncertainty in his dissenting opinion, noting that “the Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers.” He warned the refund process would likely be a “mess”—echoing a term Justice Amy Coney Barrett used during November’s hearing.

Trump himself predicted prolonged legal battles at a press conference following the ruling: “I guess it has to get litigated for the next two years. We’ll end up being in court for the next five years.”

The U.S. Customs and Border Protection agency does have mechanisms for processing duty refunds when errors occur, but nothing on this scale. Trade lawyer Dave Townsend of Dorsey & Whitney suggests the agency might try to adapt its existing refund system to handle IEEPA tariff reimbursements.

There is some precedent for court-managed refund programs. In the 1990s, after courts struck down a harbor maintenance fee on exports as unconstitutional, a system was established for exporters to apply for refunds. However, the current situation involves thousands of importers and tens of billions of dollars—an unprecedented challenge.

“Just because the process is difficult to administer doesn’t mean the government has the right to hold on to fees that were collected unlawfully,” said Alexis Early, partner at Bryan Cave Leighton Paisner.

Many companies anticipated the Court’s ruling and have already positioned themselves to recover funds. Costco, Revlon, and Bumble Bee Foods filed lawsuits seeking refunds even before the Supreme Court decision, attempting to secure a favorable position if the tariffs were invalidated.

Ryan Majerus, a partner at King & Spalding and former U.S. trade official, suggests the government might create a streamlined process, possibly including a dedicated website for importers to claim refunds. However, Adetutu cautions that “the government is well-positioned to make this as difficult as possible for importers,” potentially forcing many to pursue court action.

The economic impact of the ruling and potential refunds remains uncertain. While eliminating these tariffs could help ease inflationary pressures and refunds might stimulate spending, most experts expect modest overall effects. TD Securities estimates that refunds, when they do come, will take 12 to 18 months to process.

Consumers hoping for their own refunds face disappointment. The higher prices they paid as tariff costs were passed down the supply chain would be difficult to attribute directly to specific tariffs, making consumer-level refunds unlikely. Early advised against consumers wasting money on legal fees pursuing refunds.

Nevertheless, some politicians are attempting to advocate for consumer compensation. Illinois Governor JB Pritzker, a Democrat, demanded refunds on behalf of his state’s households, claiming the tariffs cost each Illinois household $1,700—totaling $8.7 billion statewide. Similarly, Nevada Treasurer Zach Conine submitted a request to the federal government for $2.1 billion to recoup tariff costs for Nevada families.

While the Supreme Court’s ruling represents a significant setback for Trump’s trade policy, the former president has indicated he intends to replace these tariffs using other legal authorities. This suggests that while the specific IEEPA tariffs have been invalidated, the broader trade tension and tariff policies that characterized Trump’s first term may continue in other forms.