The Supreme Court’s Tariffs Decision Puts the U.S. in Unchartered Economic Territory

The U.S. is facing a refund mess after the Supreme Court ruled that President Donald Trump’s tariffs were illegal.

The government is likely on the hook to refund an estimated $175 billion for the tariffs. The Supreme Court didn’t offer guidance on if or how the refunds should be administered. It’s unclear how or when the refunds would happen — including where the funds would come from, since the government operates on a deficit.

Thousands of companies are already suing the government for a refund, including big names — like Dole, Costco, Prada, and Toyota — as well as smaller businesses.

“Think if the government took your house. They’ve admitted that taking your house is wrong, but say ‘I think we’re going to keep it.’ You know, there’s a moral line here, that even if you disagree, it’s the final ruling of the court, and now it’s time to make amends as quickly as possible,” Dan Anthony, executive director of the business owner coalition We Pay the Tariffs, said at a press conference following the ruling.

In 2025, tariffs brought in $194.8 billion in inflation-adjusted customs revenue according to the Yale Budget Lab. The total amount is higher than that, as tariff collection has continued into the new year.

Most of the cost from tariffs was paid by American families, according to a recent report from the Federal Reserve Bank of New York. But while companies are likely to get their money back the American people — who may have paid extra for goods when companies hiked prices as a result of these tariffs — will not.

“The companies who remitted the tax, they’re going to get the money back,” Kyle Pomerleau, a senior fellow at the American Enterprise Institute, told NOTUS. “Many consumers who have had to bear the burden of the tariff through higher prices for goods are not going to receive anything back. So the companies might actually end up with a windfall to the extent that they shifted their tax to their consumers.”

He said there isn’t a pile of cash from which the U.S. will be able to draw from and refund these tariffs, so the U.S. will likely have to raise revenue from other sources or issue debt securities.

“We are in a dismal fiscal situation, and it just got worse,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Economists anticipate that the refund process will be facilitated by the U.S. Court of International Trade, where lawsuits are already ongoing. Even without litigation, the U.S. government has a process in place to refund tariff money through Customs and Border Protection and regularly does.

Scott Lincicome, director of general economics and the Cato Institute’s Trade Policy Studies Center said it “could be as easy as pressing a button in the vast majority of cases.”

“The Court of International Trade has already issued a couple of very narrow rulings that indicate they will be holding the administration to its word about refunds,” Lincicome said at a press conference.

In early court filings, the Trump administration indicated that if the tariffs were ruled unlawful it would likely have to pay them back.

“The hope is that the court doesn’t mess around, and really consolidates all of this and moves it very quickly … forcing the administration’s hand to act and to issue these refunds,” Lincicome said.

Supreme Court Justice Brett Kavanaugh wrote in his dissent that the court’s decision is likely to generate “serious practical consequences in the near term.”

“Refunds of billions of dollars would have significant consequences for the U. S. Treasury,” he wrote. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”

Trump has made clear he has no intention of making the process easy.

“Wouldn’t you think they would have put one sentence in there saying keep the money, or don’'t keep the money? I guess it has to get litigated for the next two years,” Trump said at a press conference Friday. “We’ll end up being in court for the next five years.”

Democratic officials including California Gov. Gavin Newsom are already calling for the money to be refunded.

“Every dollar unlawfully taken must be refunded immediately — with interest,” he said Friday. “Cough up!”