U.S. tariff revenue at risk in Supreme Court ruling tops US$175 billion, Penn-Wharton estimates
In a landmark 6-3 decision on February 20, 2026, the U.S. Supreme Court ruled that the president does not have the authority under the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs.
While the ruling invalidates these tariffs, it did not explicitly order the government to issue immediate refunds or provide a specific mechanism for doing so. Here is the current status of potential tariff refunds:
- Refund Eligibility: Only tariffs imposed under IEEPA (estimated at ~60% of recent tariff revenue) are affected. Tariffs under other authorities, such as Section 232 (national security) and Section 301 (unfair trade practices), remain in effect and are not subject to refund.
- Total Revenue at Risk: Economists at the Penn Wharton Budget Model estimate that the U.S. government could be liable for up to $175 billion in refunds to importers.
- Likely Refund Process: Refunds are not automatic. Importers must generally take the following steps:
- Protest with CBP: File a protest with U.S. Customs and Border Protection (CBP) within 180 days after goods have been “liquidated”.
- Litigation: Many companies have already filed lawsuits in the U.S. Court of International Trade (CIT) to preserve their rights to refunds. These cases, which were stayed pending the SCOTUS decision, are now expected to move forward.
- Timeline: Both President Trump and Treasury Secretary Scott Bessent have suggested that any refund process will be lengthy, potentially dragging out for months or even years due to the volume of claims and administrative complexity.
- Recipients: Refunds would go to the importers of record who paid the duties, not directly to consumers, even if those costs were previously passed down in the form of higher prices.