The US government could be staring at a tariff bill of its own and it may run into the hundreds of billions.
On Friday, the Supreme Court of the United States ruled 6–3 that tariffs unilaterally imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA) were illegal. The judgment opens the door to what could become one of the largest refund exercises in U.S. trade history.
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An estimate by the non-partisan Penn-Wharton Budget Modelprepared at the request of Reuters, pegs potential refunds at more than $175 billion. The figure covers duties already collected from importers since the tariffs were imposed without congressional authorisation.
Lower courts had earlier found the IEEPA-based tariffs unlawful. Several importers have pending lawsuits seeking refunds.
A $175-billion question
The Supreme Court did not explicitly address whether the federal government can retain the money already collected. That ambiguity is now central.
In December, US Customs and Border Protection said $133.5 billion in collected tariffs could be at risk of refund. That figure has likely risen with continued collections.
Justice Brett Kavanaughone of three dissenting conservatives, flagged the logistical fallout. “The United States may be required to refund billions of dollars to importers,” he wrote, noting that some firms may have already passed on costs to consumers. The refund process, he warned, is likely to be a “mess.”
Trade leverage, tariff math, business reaction and global spillover
Kavanaugh also noted the government’s argument that the IEEPA tariffs helped facilitate trade deals worth trillions of dollars, spanning countries from China to the United Kingdom and Japan. The ruling, he cautioned, could inject uncertainty into those arrangements.
Separately, Brian LeBlanc, senior economist at PNC Financial Services Groupestimated that the struck-down IEEPA tariffs account for roughly 60% of duties issued to date. Until replaced under alternative legal authority, he wrote, the effective tariff rate could fall from about 9.5% to 5%.
The fallout is not limited to US importers. Swiss industry group Swissmem urged the Swiss government to conclude a trade deal agreed in late 2025 with the United States to secure a firmer legal footing. The group said it expects the Trump administration to invoke other statutes to legitimise tariffs going forward.
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Swissmem also highlighted refund complexities: in the US, buyers are responsible for paying customs duties to the authorities. Any refund would therefore have to be obtained through the importer, raising operational and contractual questions across supply chains.
Business groups have welcomed the verdict. Neil Bradley, Executive Vice President and Chief Policy Officer at the US Chamber of Commerce, called the ruling “welcome news for businesses and consumers,” noting that small and midsize firms had faced significant cost increases and supply chain disruptions because of the tariffs.
“Swift refunds of the impermissible tariffs will be meaningful for the more than 200,000 small business importers in this country and will help support stronger economic growth this year,” Bradley said. He urged the administration to use the moment to reset tariff policy in a way that boosts growth, raises wages, and lowers costs for families.
The Chamber had filed an amicus brief in Trump v. V.O.S. Selections, Inc., arguing that the tariffs exceeded statutory authority and were causing irreparable harm to businesses of all sizes.
