US refunds $100 billion in tariffs as new duties face legal fight

US Customs has returned about $100 billion of the $165 billion in tariffs collected since April, roughly 60 percent, after the Supreme Court struck down the emergency powers behind them.

US Customs has refunded about $100 billion of the $165 billion in tariffs collected since April, roughly 60 percent, after the Supreme Court ruled President Donald Trump lacked authority to impose duties under emergency economic powers.

"The government is pushing refunds forward," Ted Murphy, a trade lawyer at Sidley Austin, said.

More than $128 billion has been "accepted for processing," according to court filings submitted Tuesday by US Customs and Border Protection to the US Court of International Trade. Treasury Secretary Scott Bessent said in February that refunds could take years of litigation, calling them "ultimately corporate welfare."

The pace has surprised trade lawyers and analysts, yet the money is flowing mostly to large importers. The administration has meanwhile moved to rebuild tariff barriers, invoking Section 301 of the Trade Act of 1974 to impose 10 percent to 12.5 percent duties on 60 trading partners — a move already facing at least three lawsuits.

Refunds Reach Importers, Not Consumers

CBP's refund system allows only the "importer of record" — the entity that directly files customs declarations — to apply online. That excludes many small businesses that absorbed tariff costs through higher purchase prices or itemized surcharges without importing directly. Some small firms said they did not know how to apply or lacked the capacity to complete the process.

The result is that refunds are concentrated among large companies. Representative Greg Casar, a Texas Democrat, criticized the distribution: "Trump gave 'refunds' to corporations, not working people. Every cent of these refunds should go back to American consumers."

Walker Livingston, an analyst at Capstone, said the government's speed "personally pleasantly surprised" him. Trump himself attacked the ruling on Truth Social last month, saying the justices' decision cost the US "trillions and trillions" of dollars.

New Tariffs Face Legal Challenges

Despite returning billions, the administration has not abandoned tariff policy. In July, the US Trade Representative invoked Section 301, citing forced labor concerns, to impose 10 percent to 12.5 percent duties on dozens of countries and customs regions, replacing an expiring 10 percent global tariff.

The new round has drawn at least three independent lawsuits, including one from the legal team that successfully challenged the "Liberation Day" tariffs before the Supreme Court. A coalition of 25 Democratic-led states filed a separate challenge Monday in the US Court of International Trade, arguing the administration is using forced labor as a pretext to revive tariffs courts already ruled unlawful under other authorities.

The states contend that tariffs covering more than 99 percent of US imports are unlikely to address forced labor and instead raise costs for American businesses and consumers while deepening legal uncertainty over US trade policy.

The refunds could total as much as $175 billion, a potential tailwind for import-heavy retailers and consumer goods companies that paid duties and now stand to recover cash. But the new Section 301 duties, if upheld, would offset much of that benefit, leaving trade-sensitive sectors facing a mixed outlook as the legal battles play out.

This article is for informational purposes only and does not constitute investment advice.