American consumers may continue paying the financial effects of tariffs imposed during the Trump administration—even after the U.S. Supreme Court ruled that most of them were illegal. A new analysis suggests that delays in refunding the tariff revenue could cost taxpayers billions more because the government must pay interest on the money collected.
Supreme Court Ruling Leaves Tariff Refund Questions
The tariffs were imposed under the International Emergency Economic Powers Act during the presidency of Donald Trump.
Although the Supreme Court of the United States ruled that most of those tariffs were illegal, the decision did not address how refunds should be handled.
Because of that, the process for returning tariff payments is expected to be determined by agencies and lower courts, including the United States Court of International Trade.
Tariff Revenue Still Sitting in the Treasury
According to a report from the Cato Institute, about $175 billion in tariff revenue remains in the U.S. Treasury.
Since that money technically represents overpayments, federal rules require the government to refund it with interest.
Interest rates outlined by U.S. Customs and Border Protection include:
- 4.5% annual interest for overpayments above $10,000
- 6% annual interest for overpayments below $10,000
The interest compounds daily, meaning the total amount owed continues growing while the refund process is unresolved.
Interest Could Cost $700 Million per Month
Economists estimate that the growing interest payments could cost around $700 million per month.
That equals roughly:
| Time Period | Estimated Interest |
|---|---|
| Per day | About $23 million |
| Per month | About $700 million |
| Per year | Roughly $8 billion |
Over the course of a year, the interest could reach $8 billion, and projections suggest it could exceed $25 billion by the end of the current presidential term if refunds remain delayed.
Consumers Already Paid Most of the Tariffs
Research suggests American consumers were already paying the majority of the tariffs through higher prices.
A report from the Federal Reserve Bank of New York found that about 90% of tariff costs were passed on to American businesses and consumers.
Another analysis from the Yale Budget Lab estimated that the tariffs increased household costs by $1,300 to $1,700 per year.
Even with new tariff policies in place after the court ruling, economists estimate American households may still face about $800 per year in added costs.
Why Consumers May Not Get Full Refunds
Even if tariff refunds are eventually issued, consumers may not see all of the money returned.
Economists say the refunds will go first to importers, the companies that initially paid the tariffs when bringing goods into the United States.
Those businesses may or may not pass the refunds back to customers through lower prices.
At the same time, taxpayers could still bear the cost of the interest payments required by federal law.
Refund Process Could Take Over a Year
Experts say returning the tariff money could take 12 to 18 months, and possibly longer if legal disputes continue.
That’s because:
- The Supreme Court ruling did not specify a refund process
- Agencies and lower courts must determine procedures
- Importers will need to file claims or receive transfers
President Trump has suggested the issue could take years to fully resolve through litigation.
Previous Tariff Refunds Offer Some Precedent
The United States has previously issued tariff refunds through programs such as the Generalized System of Preferences.
That program has expired several times over the past 50 years, temporarily forcing importers to pay higher tariffs.
Once Congress renewed the program, the government refunded those overpayments.
Between 2021 and 2023, the U.S. refunded roughly $3 billion in tariffs through this system.
Complex Refunds for Businesses
Economists say the refund process itself may not be technically difficult for the government.
However, complications may arise because many businesses have contracts or pricing agreements that determine who ultimately absorbs tariff costs.
This means each company may need to resolve how refunds should be distributed within supply chains.
