The high court’s rejection is “one thing,” U.S. tax refunds are “another.”
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After the Supreme Court ruled that Trump’s tariffs were illegal, how the US government will refund the tariffs already collected has become an unresolved issue.
According to CCTV News, on the 20th local time, the US Supreme Court ruled that the large-scale tariff measures implemented by the Trump administration based on the International Emergency Economic Powers Act (IEEPA) lacked clear legal authorization.
The majority opinion written by US Chief Justice John Roberts did not address the issue of refunds, and analysts speculate that it is likely left for the lower courts to handle. However, Justice Brett Kavanaugh raised the issue in his dissent, saying the process could be “a mess” and would “have a significant impact on the US Treasury.”
At a press conference on Friday, Trump criticized the justices for failing to resolve the issue of how to handle the tariff funds, and said, "We’ll end up tangled in the courts for five years.” For American businesses and the economy, this means even more trade uncertainty.
According to estimates by Goldman Sachs, as of the time of the ruling, the government had collected $115–$145 billion in tariffs based on IEEPA. How this money will get back to companies and how Trump’s newly announced tariffs will be implemented have become a dual challenge facing the market.
As previously mentioned by Wallstreetcn, Goldman Sachs believes that if the court overturns the tariffs, refunds will not happen automatically, possibly taking months—or even longer—and will rely on importers taking further legal action.
The National Retail Federation has called for a streamlined refund process, saying that tariff relief would provide businesses with a financial boost for investment and operations. But practically, it’s far from simple—who is eligible to apply, how to prove the cost was not passed on to consumers, and which documents are needed are all critical questions that remain unresolved.
The Refund Application Battle Has Already Begun
The foremost issue facing American companies is how to reclaim already paid tariffs.
According to reports, while awaiting judicial rulings, more than 1,500 firms have already filed lawsuits in the trade courts seeking tariff refunds.
Retailers such as Costco and industrial giants like Alcoa, along with many other well-known brands, have all initiated lawsuits. Most of these companies are headquartered in the US, but also include the US subsidiaries of foreign companies.
Importers may need to apply for refunds from US Customs and Border Protection and may need to pursue further legal action. Marc L. Busch, Georgetown University international trade professor, believes the fastest way for companies to get their money back is for Congress to step in and declare automatic refunds; otherwise, “this will take years.”
Beth Benike, owner of Minnesota baby product retailer Busy Baby, said she has paid nearly $50,000 in tariffs. She said:
I will join the class-action lawsuit with other small business owners, but I’m not sure about the refund process—no one knows what it will be.
Julie Robbins, founder of Ohio guitar pedal maker EarthQuaker Devices, estimates she’s paid over $65,000 in tariffs. Her procurement contract does not specify whether tariff costs are refundable; her supplier has told her they’re willing to refund, but they’re still waiting to see if authorities will return the funds.
Rick Woldenberg, CEO of an educational toy company who has sued over tariffs, said:
Confident in getting a refund plus interest, because they (the government) had no right to take the money.
The Retail Industry Faces New Uncertainties
The ruling comes as the retail earnings season starts, including Home Depot, which reports its results on Tuesday.
Although most companies are reporting results for quarters ending before the ruling took effect, GlobalData managing director Neil Saunders said this move may impact profit and earnings outlook. He said:
If they have already factored high tariff costs into their results, there could actually be some positive factors.
Emarketer chief analyst Zak Stambor expects the ruling to modestly boost retail sales starting this year, but says such benefits will gradually diminish by 2028. He stated:
While this decision provides some short-term relief, it does not eliminate the broader trade policy uncertainties faced by retailers and brands.
Telsey Advisory Group analyst Joe Feldman said that businesses trying to recoup funds will take time, and except for staple goods like milk and eggs, most product prices typically don’t go down once raised. Operators may see better short-term margins, but are unlikely to gain windfall profits or change price structures.
Morgan Stanley estimates that if 80% of IEEPA tariffs are refunded, GDP will grow by just 17 basis points this year; if only 40% are refunded, 2027 GDP will rise just 8 basis points.
Scott Lincicome, VP of economics and trade at the Cato Institute, pointed out:
Even if we see full immediate refunds, we’re just injecting $150 billion into a $30 trillion economy—it’s not catastrophic.
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