Customs Will Stop Collecting Trump’s Tariffs…Government May Not Return $175 Billion

The Supreme Court ruling did not end Trump’s tariff agenda. It barely slowed it down. Within hours of the decision, Trump signed a new 10 percent global tariff, this time invoking Section 122 of the Trade Act of 1974 — a completely different legal authority than IEEPA. That rate was subsequently raised to 15 percent. The message was clear: if one legal basis is struck down, the administration will simply find another. However, Section 122 comes with a significant limitation that IEEPA did not: tariffs imposed under this authority must end within 150 days unless Congress votes to extend them.

That is a hard deadline, and given the current political dynamics, congressional extension is far from certain. The administration has also indicated it will use Section 232 (national security tariffs) and Section 301 (unfair trade practices tariffs) to further replace the struck-down IEEPA tariffs, both of which have their own legal frameworks and constraints. The tradeoff for consumers is this: the illegal tariffs have stopped, but new tariffs have immediately taken their place. The prices you are paying on imported goods are not going down just because the Supreme Court ruled. The legal basis has shifted, the rates may be somewhat different, and the durability of these replacement tariffs is uncertain — but the economic impact on households continues. The difference is that these new tariffs, at least for now, rest on legal authority that has not been challenged the same way IEEPA was.

Why Getting Your Tariff Refund Will Be Harder Than You Think

Even if the courts eventually rule that refunds are owed, the practical reality of distributing $175 billion is staggeringly complex. Tariffs are paid by importers, not directly by consumers. The companies that paid these tariffs passed the costs along through their supply chains in the form of higher wholesale and retail prices. Unwinding that chain — figuring out who actually bore the economic burden — is a problem that trade courts have wrestled with for decades without clean answers. For importers, the path to a refund runs through the Court of International Trade, where each claim must be individually adjudicated. Large corporations with dedicated trade compliance teams and outside counsel will file their claims promptly.

Small businesses that imported goods and paid the tariffs may not even realize they are entitled to a refund, may not know how to file a claim, or may have already absorbed the loss and moved on. The administration’s stated intention to fight refund claims means even well-documented cases will face delay. There is also the question of what “full refund” even means in this context. Some of the tariff payments have already been allocated and spent by the federal government. The money is not sitting in an escrow account waiting to be returned. Congress would likely need to appropriate funds to cover refunds on this scale, which circles back to the political problem: a Congress that cannot pass the Tariff Refund Act is unlikely to appropriate $175 billion for tariff restitution.

Some Companies Are Already Passing Tariff Savings to Customers

Not every part of this story is bleak. Some companies have begun pledging to pass tariff refunds along to their customers if and when they receive them from the government. FedEx is among the companies that have publicly committed to doing so.

This is worth watching, because it sets a precedent and creates public pressure on other major importers and retailers to make similar commitments. But this is voluntary, and there is no legal requirement for companies to share refunds with their end customers. A retailer that raised prices by 20 percent to cover tariff costs and then receives a full refund from CBP is under no obligation to lower prices or cut refund checks to the people who paid those inflated prices. Whether market competition and public pressure will be enough to ensure refunds flow downstream to consumers remains to be seen.

What Comes Next for Tariffs, Trade, and Your Wallet

The Supreme Court’s ruling in *Learning Resources, Inc. v. Trump* is one of the most consequential trade decisions in modern American history, but its practical impact is still unfolding. The 150-day clock on Section 122 tariffs will expire in mid-July 2026, forcing either congressional action or a pivot to yet another legal authority. The Court of International Trade will begin processing refund claims, but meaningful rulings are likely months or years away. And the political fight over whether to return the $175 billion will intensify as the 2026 midterm elections approach.

For consumers, the takeaway is sobering: the government collected $175 billion through tariffs that the Supreme Court says were never legal, and returning that money is nobody’s priority. The administration wants to keep it. Congress lacks the votes to force refunds. The courts will take years. Meanwhile, new tariffs under different legal authority are already in effect. The machinery of trade policy grinds on, and the $1,300 per household that was collected illegally may simply become another line item in the federal budget that nobody ever accounts for.

Conclusion

The Supreme Court delivered a clear verdict: Trump’s IEEPA tariffs were illegal, and Customs has stopped collecting them. But clarity on the law has not translated into clarity on the money. The $175 billion already collected remains in government hands, with the administration actively seeking to keep it, a refund bill stuck in a divided Congress, and court proceedings that could stretch for years. For the importers who paid and the consumers who absorbed the costs, the ruling is a vindication in principle but not yet in practice.

What you can do right now depends on who you are. If you are an importer, consult a trade attorney about filing a protest or claim with the Court of International Trade before any applicable deadlines pass. If you are a consumer, pay attention to which companies commit to passing refunds along and support those that do. And if you are a voter, understand that the question of whether $175 billion in illegally collected tariffs gets returned is ultimately a political decision as much as a legal one — and act accordingly.

Frequently Asked Questions

Were Trump’s tariffs ruled unconstitutional?

Not exactly. The Supreme Court ruled 6-3 that the tariffs imposed under the International Emergency Economic Powers Act were illegal because IEEPA does not authorize the president to impose tariffs. The ruling was based on statutory interpretation, not a constitutional challenge. The tariffs exceeded what the law allowed, but the Court did not say tariffs themselves are unconstitutional.

Will I get a refund for the higher prices I paid because of the tariffs?

Almost certainly not directly. Tariffs are paid by importers, not consumers. Even if importers receive refunds from the government — which is far from guaranteed and could take years — there is no legal requirement for companies to pass those savings back to consumers through lower prices or refund checks. Some companies like FedEx have voluntarily pledged to do so.

How much money did the government collect from the illegal tariffs?

The Penn Wharton Budget Model estimates between $175 and $176 billion in total IEEPA tariff revenue, roughly $500 million per day. CBP’s own December 2025 figure was $133.5 billion. Either way, it works out to approximately $1,300 per U.S. household.

Are there still tariffs in effect after the Supreme Court ruling?

Yes. Within hours of the ruling, Trump imposed a new global tariff under Section 122 of the Trade Act of 1974, initially set at 10 percent and later raised to 15 percent. The administration has also signaled it will use Section 232 and Section 301 authorities. However, Section 122 tariffs must expire within 150 days unless Congress extends them.

What is the Tariff Refund Act of 2026?

A bill introduced by Senator Ron Wyden and 25 other Senate Democrats that would require CBP to issue full refunds with interest within 180 days. It covers liquidated entries and prioritizes small businesses. However, the bill has no Republican co-sponsors and is unlikely to pass in the current Congress.

How long could it take to get tariff refunds through the courts?

Potentially years. The Court of International Trade is expected to handle refund proceedings, but no timeline has been established. The Trump administration has indicated it will fight refund claims, and Treasury Secretary Scott Bessent has said lower courts will need to decide the question — a process that could involve multiple rounds of litigation and appeals.

You Might Also Like