Inside the Race for Tariff Refunds

Photo via Justin Lane, Shutterstock

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Since their implementation, United States President Donald Trump’s tariffs have had wide-reaching effects on the economy, including increasing inflation and contributing to economic displacement, including a decline in manufacturing jobs. However, on February 20th, 2026, his tariff policy faced the largest setback to their continued implementation yet when the U.S. Supreme Court ruled in Learning Resources v. Trump (2026) in a 6-3 decision that Trump lacked the authority to implement tariffs under the International Emergency Economic Powers Act (I.E.E.P.A.), the law he initially used to implement tariffs last year.  

The I.E.E.P.A. delegates a larger amount of power to the President to regulate economic activities after a national emergency has been declared. However, the Court reasoned that this authority did not extend to times of peace, and that the authority for the President to unilaterally implement tariffs must be explicitly specified by Congress. Additionally, they stated these economic powers do not include the power to collect taxes.

Beginning in early 2025, the tariffs that were implemented under the I.E.E.P.A. have resulted in approximately $180 billion being collected by the U.S. government, and this Court ruling has set off a frenzy among companies to attempt to obtain refunds for the money the Court ruled was collected unconstitutionally. Additionally, this week, a U.S. Court of International Trade judge ruled that the Trump administration was required to repay companies for tariffs improperly collected under the I.E.E.P.A.

The rulings by the Supreme Court and the trade court have been met with resistance from the Trump administration. In the hours following the February ruling by the Supreme Court, Trump announced a 10 percent global tariff, which was subsequently raised to 15 percent a day later. This, more limited, authority comes from Section 122 of the Trade Act of 1974.  The Act was initially passed to address uncertainty in economic trade, and Section 122, which provides the President with authority to implement tariffs, however these tariffs must be applied to all countries and they will expire after 150 days, assuming Congress does not vote to maintain them.

Since this new authority was invoked, around 24 states have already sued the Trump administration, questioning the legality of his executive order. Trump has used tariffs throughout his term for multiple priorities, including as an attempt to onshore manufacturing, provide tax revenue to the government, and compel foreign countries to comply with various political demands. These goals have been met with varying amounts of success, and have placed a further economic burden on taxpayers, contributing to Trump’s approval rating on the economy falling to around 40 percent. 

One could view the Supreme Court’s ruling as an opportunity for the Trump administration to abandon the experiment of applying sweeping tariffs to focus on more popular economic messaging heading into the competitive 2026 midterm elections. The willingness to sacrifice public approval for a predetermined economic agenda shows how Trump views tariffs as an indefensible aspect of his attempts to reshape U.S. economic policy and international relations.

Even disregarding the specifics of refunding over 53 million tariff entries paid by over 330,000 importers over a year has proven challenging, so much so that U.S. Customs and Border Protection (C.B.P.) informed the trade court that they were unable to fulfill their ruling that required the tariffs to be reimbursed due to shortcomings in existing technology. However, according to their filing, they may have the ability to issue refunds in April by improving their technology.

While thousands of companies have already sued the government to be reimbursed, and some have claimed C.B.P. has rejected requests to reclaim tariff revenue that has been recently paid, C.B.P. has stated they are planning on creating a system that will reimburse companies without needing to sue. While it is possible that consumers could see benefits from this development, the longer the government waits, the more tariff payments that “liquidate,” or are entered into the C.B.P. system, which makes them harder to recover. This is because when tariffs are paid, the revenue goes to the general affairs budget of the U.S. Department of the Treasury, where there is not much oversight as to what it can be used for afterwards. 

The chaotic race to claim tariff refunds stems from the issue with implementing the tariffs in the first place, that they were implemented unilaterally by the President, with a power the Supreme Court has now clarified he did not have. The decision to implement tariffs through executive order and not through Congress has resulted in negative unintended consequences for the U.S. economy, and has created an unprecedented situation where the government must attempt to repay billions of dollars in collected revenue.

While Trump has other authorities with their own limitations that could be used to implement tariffs following the expiration of the Section 122 tariffs, assuming they withstand legal challenges, Learning Resources and the subsequent vast demand for tariff refunds without an immediately clear plan to fulfil those requests shows why the ability to implement a permanent regressive tax on Americans cannot be given to the President.

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This article was edited by Ella Cohen.