Convincing six Supreme Court justices that President Donald Trump overstepped his authority in imposing sweeping tariffs relying on emergency economic powers was, in fact, the straightforward aspect of the matter. The challenging aspect: Obtaining a definitive response regarding the fate of the tens of billions of dollars that US companies paid after Trump increased tariffs on all global partners last year. The Trump administration — both formally and informally — has pledged to refund duties collected should the Supreme Court rule against them. However, neither the administration nor any of the justices have clarified precisely how it would function. Justice Brett Kavanaugh articulated in his dissenting opinion, “Refunds of billions of dollars would have significant consequences for the US Treasury.” He continued “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. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”
On Friday, President Donald Trump raised a question regarding why the justices did not clarify whether the tariff revenue must be returned. “I suppose it will need to be litigated over the next two years,” he remarked to reporters. He then stated it could be “the next five years.” That likely indicates that businesses will need to struggle fiercely for any opportunity at a refund — despite the government maintaining detailed records of all tariff payments. “The case was never about refunds, and it was inconceivable that the Supreme Court would get into the weeds of how you apply refunds,” stated Ted Posner. “We’re now engaging with companies regarding the next steps, which entails further waiting, this time for the Court of International Trade. Any refund process is going to require meticulous submissions, and for now, companies and even countries are left in limbo.” Essentially, this indicates that individual importers will need to initiate their own legal actions in order to pursue a potential refund.
Treasury Secretary Scott Bessent stated in a Reuters interview last month that the agency possesses sufficient cash on hand to refund importers; however, he noted that the process may extend over the course of a year. “It won’t be a problem if we have to do it, but I can tell you that if it happens — which I don’t think it’s going to — it’s just a corporate boondoggle,” Bessent said. Then Bessent inquired if companies such as Costco, which took the initiative to sue the US government to protect its interests in a refund, would return any of the funds they obtain to customers. “I’ve got a feeling the American people won’t see it,” Bessent said Friday at an event hosted by the Economic Club of Dallas. This marks yet another instance in which the government has been compelled to provide tariff refunds following a ruling from the Supreme Court. A decision made in 1998 led to $730 million in tariff refunds for American companies, although the process took two years to complete.
“It is an open question whether Customs and Border Protection will follow historical precedent or existing processes, or whether a new process will be needed to address the sheer scope and volume of the IEEPA tariffs,” said Alexis Early, referring to the set of tariffs that the Supreme Court struck down. For the consumers who absorbed the costs of the tariffs through increased prices, it appears that refunds will not be forthcoming to their bank accounts. “Companies are highly unlikely to start trimming their prices as a result,” stated Stephanie Roth. “Walmart is not going to provide you with a reimbursement for the 15% tariff on sneakers you purchased from them four months ago.”