Trump hints illegally imposed tariffs won't be refunded; US Treasury Secretary says this year's tariff revenue will "remain basically unchanged".

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After most of last year's tariff measures were ruled illegal by the U.S. Supreme Court, President Trump indicated he would not refund the related tariffs, and Treasury Secretary Bassenth predicted that government tariff revenues in 2026 would remain almost unchanged. These positions suggest that even facing an estimated risk of over $170 billion in tariff refunds, the Trump administration is determined to maintain tariff barriers and has not backed down despite a major court defeat.

According to CCTV News, at a White House press conference held at short notice on Friday the 20th local time, Trump said he would sign an executive order imposing a 10% import tariff on global goods, to replace the large-scale tariffs previously imposed under the U.S. International Emergency Economic Powers Act (IEEPA), which the Supreme Court found illegal.

CCTV reported that when asked by reporters on site whether the approximately $175 billion in previously collected tariffs would be refunded, Trump replied that the Supreme Court’s ruling was flawed and did not mention whether to "keep the money" or "not keep the money"—he guessed, "for the next two years, or even five years, this will be tied up in litigation."

Also on Friday, Bassenth said in a speech at the Dallas Economic Club that the Trump administration would invoke alternative legal authorities granted by Congress, including Section 122 and Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962, to replace tariffs based on the IEEPA that were struck down by the Supreme Court.

Bassenth emphasized, "No one should expect tariff revenues to decrease." He said Treasury estimates show that combining Section 122 with potentially strengthened Section 232 and Section 301 tariffs would keep 2026 tariff revenues "basically unchanged." He reiterated this view during the Q&A session, showing the administration’s confidence in building a new tariff system.

Later in a media interview, Bassenth again stressed that even after the Supreme Court’s ruling, there is “no change at all” in terms of national security and fiscal revenues. Bassenth criticized the Supreme Court’s decision, saying the American people would suffer economically as a result. He said:

"In terms of direction, national security, how we achieve our goals through these agreements, and revenue, nothing has changed. What has changed is that the Supreme Court has stripped the president of his bargaining chip."

Earlier, CCTV reported that, according to economists from the University of Pennsylvania’s Wharton forecasting model on Friday, tariffs imposed under the IEEPA had already exceeded $175 billion. After the court declared these tariffs illegal, the government might have to refund $175 billion in tariffs.

However, Bassenth said that the U.S. federal government's tariff revenue was closer to $130 billion, not the $175 billion suggested by the research institute’s model. If tariff refunds occur, they might amount to a type of “corporate welfare.” The new tariffs, compared to those based on IEEPA, will be somewhat more complex.

"We will return to previous tariff levels, only the method will be less straightforward and somewhat more complicated."

According to CCTV News, the U.S. Supreme Court ruled this Friday that the Trump administration's large-scale tariffs based on the IEEPA lacked clear legal authorization. A majority of Supreme Court justices held that the IEEPA did not grant the president the power to impose tariffs without Congress's consent.

Separately, CCTV reports that after the decision was announced, Trump said he would sign an order, under Section 122 of the Trade Act of 1974, to apply an additional 10% tariff on global goods, on top of the regular tariffs already imposed. This policy is expected to take effect "within about three days."

This legal defeat will spark an unprecedented battle for tax refunds. According to U.S. Customs and Border Protection data, by the end of last year the Trump administration had imposed about $170 billion in tariffs via the IEEPA, involving more than 300,000 importers. A large number of companies, including Costco, Lululemon, and Alcoa, as well as over 1,500 companies, have filed lawsuits seeking to recover already paid tariffs.

A Trillion-Dollar Battle Over Tax Refunds Begins

The Supreme Court’s decision announced on Friday gave no clear guidance on refund eligibility or the process, instead leaving the issue to the U.S. Court of International Trade.

In his dissenting opinion, Supreme Court Justice Brett Kavanaugh, who voted against the decision, wrote, "The Court today says nothing about whether and how the government should return the tens of billions of dollars it collected from importers," and warned that the refund process "could be a mess."

According to Bloomberg Economics, as of December 14 last year, the textiles, toys, and food & beverage sectors were the largest payers of IEEPA tariffs, and parts importers in the machinery, electronics, and automotive industries were also significantly affected. As refunds will go to whoever held the import records at the time, large companies that import directly are more likely to receive refunds, while small businesses purchasing from wholesalers are at a disadvantage.

The National Retail Federation called for a “seamless” refund process. David French, the organization’s executive vice president for government relations, stated the tariff relief would provide an economic boost allowing companies to invest in operations. But Bassenth questioned this, saying the refunds could become "corporate windfalls," and rhetorically asked if companies suing the government, like Costco, would return the money to their customers.

According to Treasury data, the U.S. Treasury holds about $774 billion in cash, enough to handle refund claims. Bassenth previously stated in interviews that the refund process might take several weeks to several months, "perhaps over a year."

Market Impact Still Unclear

Legal and consulting experts predict the government may increase refund difficulty by requiring proof that costs were not passed on or demanding large amounts of documentation. Customs brokers and lawyers suggest companies at least prepare import records for potential refund applications. U.S. Customs and Border Protection announced that from February 6, Treasury will no longer issue refunds by paper check, but will use electronic payment instead.

For the retail sector, the impact of the ruling is highly uncertain. Zak Stambor, chief analyst at Emarketer, noted in a report, "While the ruling provides some short-term relief, it doesn’t eliminate broader trade-policy uncertainty faced by retailers and brands," and is expected to bring "modest tailwinds" for retail sales this year, but benefits will gradually fade by 2028.

Telsey Advisory Group analyst Joe Feldman stated the ruling raises more questions than certainty. It will take time for businesses to recover funds paid, and product prices usually do not decrease once tariffs are removed, except for bulk goods like milk and eggs. He believes "the practical reality won't change much."

Michael Wieder, co-founder of baby product manufacturer Lalo, said the company would take all necessary steps to recover over $2 million in tariffs. He admitted, "We do not expect refunds overnight, but we hope to be at the front of the line." As for what to do with possible refunds, he said, "We’ll see when the time comes."

Ibis Cycles CEO Hans Heim expects to eventually receive a refund, but the timing is unknown. He said the company spent much of the past year restructuring supply chains, deciphering tariff changes, and cutting costs. "People will be glad to get a refund on the surface, but they’d rather have had it never happen in the first place."

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