Will There Be a Trump Tariff Refund?

Newsweek

4 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
The federal court ruling aimed at striking down the majority of President Donald Trump's tariffs could force the government to pay back billions of dollars in import duties that have already been collected.
Newsweek has reached out to U.S. Customs and Border Protection (CBP), the agency responsible for administering tariffs and collecting duties, for comment.
What To Know
On Wednesday, a three-judge panel at the U.S. Court of International Trade (CIT) ruled that the International Emergency Economic Powers Act (IEEPA) did not grant the president authority to impose his sweeping tariffs or bypass Congress' typical control over economic policy and commerce. The 1977 law was cited by Trump as justification for the majority of his tariffs, most notably those unveiled on "Liberation Day" in early April.
"The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder," the ruling read.
The decision, which followed several lawsuits alleging executive overreach by the president on trade, covers the currently paused "reciprocal" tariffs and the 10 percent baseline rate applied globally. The ruling also halts the "trafficking" tariffs imposed on China, Canada and Mexico in response to the public health crisis caused by fentanyl and other illicit drugs brought into the U.S.
President Donald Trump speaks to reporters in the Oval Office of the White House on May 23, 2025, in Washington.
President Donald Trump speaks to reporters in the Oval Office of the White House on May 23, 2025, in Washington.
Evan Vucci/AP Photo
However, the ruling does not concern the tariffs on autos, auto parts, steel or aluminum, which were brought under Section 232 of the Trade Expansion Act, allowing the president to limit imports of specific goods if these are considered a threat to national security.
"This will do tremendous damage to Trump's agenda. His whole second term seemed to be DOGE, deport, and (trade) deals," Todd Tucker, trade expert with the New York-based Roosevelt Institute think tank, posted to BlueSky on Thursday.
"On trade, in particular, why would any country waste time negotiating to lower his tariffs if he can't impose them in the first place?"
Will There Be A Tariff Refund?
The administration has already filed an appeal with the Court of Appeals of the Federal Circuit while calling the CIT's ruling a "judicial coup." Economists have also pointed to other avenues for the president to carry out his trade agenda following the decision.
If upheld, the court's decision could require the administration to refund the billions already paid in import duties. The Kobeissi Letter estimated that $10 billion worth of tariff revenue had been collected since April 2, though Newsweek analysis of official Treasury Department data suggests the figure could be much higher.
"I think that the court's order should lead CBP to suspend liquidation of entries going forward, which would mean that if the court's decision is ultimately upheld, importers can get their money back," said William Reinsch, formerly under secretary of commerce for export administration during the Clinton administration and president of the National Foreign Trade Council from 2001 to 2016.
Reinsch told Newsweek that, for goods already processed by customs authorities, importers may also be able to sue the administration.
"The CIT decision ruling the tariffs illegal and vacating them gives importers good grounds to do that," he said, "but the administration will probably resist."
The Trump administration has acknowledged its duty to refund certain tariff charges if duties are later revoked or lowered. After deciding in late April that certain tariffs should not be cumulative or "stacked," Trump in an executive order said that the decision would apply "retroactively" to some tariffs and that refunds for those who had paid a heightened import tax would be processed "pursuant to applicable laws and U.S. Customs and Border Protection's standard procedures for such refunds."
Similar information was included when exceptions on Trump's reciprocal tariffs were announced, and the CBP has given guidance on how importers can request refunds for duties paid on products where tariffs were subsequently reversed or reduced.
While importers—typically U.S. businesses but also foreign exporters contractually obligated to pay import taxes—may be entitled to refunds, Reinsch told Newsweek that consumers would "probably not" see any as a result of the CIT's decision, even if the tariffs resulted in higher prices for foreign-sourced goods purchased over the past few months.
"The people who paid the tariffs—the importers—might get their money back, but they would not be obligated to pass that on to consumers, although some might choose to do so as a matter of goodwill," he said, adding that he was "skeptical" any attempt by consumers to sue the government for damages would get very far.
What Happens Next
The CIT has ordered the government to halt the tariffs imposed under the IEEPA within 10 calendar days of the decision. Financial analyst and trader Craig Shapiro predicted that the conclusion of the appeals process could come by the end of June, when the administration may be able to continue collecting tariff revenue.
Steve Wyett, chief investment strategist at BOK Financial, told Newsweek that despite the CIT's ruling, "there are other avenues which can be used to replace most announced tariffs." Similarly, Goldman Sachs researchers, in a Thursday note cited by CNBC, said that while the ruling represented "a setback for the administration's tariff plans," they expect that Trump "will find other ways to impose tariffs." They cited Section 122 of the 1974 Trade Act as allowing the president to "quickly replace the 10% across-the-board tariff with a similar tariff of up to 15%."