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Donald Trump’s had his fun with tariffs and now it’s payback time. As in: it’s literally time to pay it back. The Supreme Court decision against Trump’s bogusly named emergency duties — as issued under the International Emergency Economic Powers Act — has put his trade policy in disarray. The tariff refund industry is out of the blocks trying to get repayment for businesses of something like $175bn levied over the past year.
Let’s be clear: this farrago was entirely unnecessary and involved an extremely expensive exercise in attention-seeking by the court. The justices could have declined to take the case and instead accepted the rulings against the tariffs first by the Court of International Trade and then the federal appeals court last summer. Instead, the CIT injunction was stayed for another seven months until the Supreme Court upheld the decision using similar reasoning.
Refusing to take responsibility, the Trump administration has pointed at the Supreme Court as responsible for sorting out refunds. The court was silent on the matter, so it will instead bounce back to the CIT.
The exact mechanism for reclaiming tariff payments is mired in legal and administrative uncertainty. It’s possible that companies which paid tariffs that have not yet been “liquidated” — definitively finalised — might be able to get them back quickly. But it is too late for many.
It’s pretty clear the administration will struggle to oppose refunds in principle. In a court case brought to the CIT by a group of companies in December, the administration argued against immediately stopping the liquidation of payments but promised to allow refunds later. But Trump can certainly make them difficult and expensive to collect, out of spite if nothing else. Democrats in Congress have already proposed a bill to smooth and expedite the process; no one seems to think it will get enough votes to survive a presidential veto.
In the meantime, trade attorneys and customs agents are gearing up for business. Estimates vary of the probable wait — and smaller companies may not find it worth the cost and hassle — but it seems likely to be measured in months and years rather than weeks and months.
The refunds, on top of remaining and forthcoming tariffs, will thus surely become a political issue between now and the midterm elections in November. If Trump had any sense he would be ostentatiously pushing them through quickly, perhaps even labelling them a tariff dividend and hoping no one notices it’s not exactly the one he promised. But although his administration has been reducing tariffs either through negotiation or unilaterally, Trump himself apparently simply cannot grasp quite how unpopular they have become.
Another potential source of friction is the mismatch between who in effect bore the cost of the tariffs and those who will get the refund. The money is handed back to the “importer of record” which paid them, but if that is a consumer-facing company — or indeed a wholesaler — which passed the cost on to its customers, the latter might feel they are morally if not legally owed money back.
The Main Street Alliance, an association of small businesses which is assisting them in reclaiming tariff payments, acknowledges the risk of a customer backlash and is providing guidance for its members to argue that the refunds benefit consumers. Some companies are already making a marketing point out of compensating customers for the tariffs.
There may be even more righteous anger to come. Ryan Petersen, chief executive of the global logistics technology company Flexport, which is also offering a tariff refund service, says the US is very unusual in allowing foreign companies straightforwardly to act as importers of record. Flexport says their analysis of customs data suggests that the share of trade with China accounted for by Chinese importers of record jumped from 9 per cent before “liberation day” in April 2025 to 20 per cent by the end of the year.
Petersen says this reflects Chinese companies giving themselves the ability to misvalue imports to reduce tariff costs. It also means that the US government, while letting consumers take the hit, will be shelling out billions of dollars to a rising number of Chinese companies who are aggressively targeting the US market.
This will be extraordinarily bad optics. Trump always said that Chinese companies would pay the tariffs. In economic terms, this has largely turned out to be wrong, as the cost of duties has been passed on to domestic producers and consumers. But in an administrative sense it seems to have been increasingly correct.
If you had to precision-design a policy to showcase the Trump administration’s shortcomings, the IEEPA tariff saga would be it. It’s an illegal duty based on wrong-headed economics, it was ineptly designed and incompetently administered, sulkily reversed under belated legal duress and is giving a windfall to exactly the people it was designed to punish. It would take a heart of stone not to laugh, but it’s unlikely American consumers and voters will appreciate the joke.