Don't hold your breath for a tariff refund after Supreme Court ruling

After a months-long wait, the U.S. Supreme Court struck down President Donald Trump's far-reaching emergency power tariffs on the grounds that the International Emergency Economic Power Acts (IEEPA) "does not authorize the President to impose tariffs."

The 6-3 decision was written by Chief Justice John Roberts, with a concurrent opinion filed by Trump appointee Neil Gorsuch. But it was Justice Brett Kavanaugh who probably laid out the mess ahead when he wrote:

"The court is likely to generate other serious practical consequences in the near term. One issue will be refunds."

Don't hold your breath for those.

With over $200 billion in tariffs collected under the policy, it could be months before anybody gets a refund, if they get one at all. Although the SCOTUS argument acknowledged that the refund process is likely to be "a mess," the court did not touch on whether the federal government has to issue refunds. Enter: more legal chaos.

What does that mean for businesses and individuals who incurred costs? More waiting, at least for now.

How will refunds be handled?

The IEEPA case centered on the legality of Trump's tariffs imposed back in April but did not answer any questions of how the problem might be remedied. There are acknowledgments of refunds, but no explicit demand from the court to issue refunds. That will likely hinge on another decision by the court.

But assuming refunds are cleared, it will be up to the Trump Administration to figure out how to refund the tariffs collected when the goods passed through U.S. Customs and Border Protection. They will also likely be the agency tasked with returning funds to businesses, through administrative means which are not yet available.

What's next for tariffs?

To that end, Trump has more answers about what is next for tariffs, as opposed to what is next for businesses that paid the illegally imposed ones.

The result will mean that many of Trump's so-called reciprocal tariffs, which came down on a poster board in the Rose Garden last April, will be getting the axe, leaving just industry-specific tariffs which were imposed under a section act (Section 232 of the Trade Expansion Act of 1962).

However, after a sort of "Reverse Liberation Day", President Donald Trump announced a new wave of tariffs. A new 10% global tariff rate will take effect for five months, or 150 days from the signing of the new document. More details are pending.

Why the persistence?

Since returning to office, President Donald Trump has championed a policy of economic isolationism, with the emergency power tariffs intending to make U.S. manufacturing more competitive with cheaper, overseas products.

He also champions the tariffs as a matter of fairness, with his original reciprocal tariff talking points squaring up how the U.S. subsidizes other global economies.

The President previously warned that their repeal would, "be 1929 all over again, a GREAT DEPRESSION!"

However, the refund problem could represent some sort of fiscal meltdown for the federal government if not quickly mended. The Republican tax bill, the One Big Beautiful Bill Act (OBBBA), passed on the pretense that tariff revenue would help fund tax cuts and other spending. Republican estimates of the tariff income was over $2 trillion over the decade spanning 2025 to 2034. Those tariffs are now gone, presenting an unprecedented fiscal problem.

Have tariffs worked so far?

Aside from shocking foreign relations, data is mixed on the effectiveness of tariffs. With the IEEPA tariffs on the rocks and billions of refunds due to businesses, the program is now squarely in the red. The effect on domestic businesses is hard to paint as positive.

Data shows U.S. manufacturing spent most of 2025 in retreat, particularly after the IEEPA tariffs were imposed; this can probably be attributed to the fact that even domestic firms rely on importing some products to use in final assembly. assembly.

Separately, U.S. payrolls have faced significant declines, including massive downward revisions since 2025. Many of these payroll declines appeared to coincide with the shift in tariff policy in April, introducing questions about the extent to which these tariffs have set the U.S. economy ablaze.

The IEEPA tariffs, as well as the hasty decision-making at the White House, has been a shadow over the market and American businesses. Their repeal, and the pivot towards a 10% tariff on all global assets, is a step towards clarity for businesses at a minimum.

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This story was originally published February 20, 2026 at 11:42 AM.