The Supreme Court ruled 6-3 on February 20, 2026, that the International Emergency Economic Powers Act does not authorize the tariffs imposed by the Trump administration, striking down most of those levies in a single decision. The ruling immediately raised a question worth tens of billions of dollars, who gets the money back? The answer, based on how federal refund law actually works, is that corporations and importers stand to reclaim massive sums while ordinary consumers who paid higher prices at the register are unlikely to see a cent.
$81.5 Billion in Tariff Revenue Now in Dispute
The scale of the money at stake is staggering. By the end of June 2025, the Department of Homeland Security announced $106.1 billion in customs revenue collected since January 20, 2025, with $81.5 billion attributed directly to tariffs. Those collections ballooned after a baseline 10% tariff took effect on April 5, 2025, followed by individualized reciprocal tariffs starting April 9, as U.S. Customs and Border Protection detailed in its official timeline of IEEPA tariff actions. Executive Order 14289, signed on April 29, 2025, layered additional tariff authorities on top of one another across IEEPA, Section 232, and other trade statutes, with some changes applied retroactively according to the Federal Register text of the order.
Now that the Supreme Court has declared the legal basis for IEEPA tariffs invalid, the administration faces the prospect of refunding billions of dollars in duties that were collected under authority the court says never existed. CBP’s own trade statistics note that its revenue figures already include adjustments for refunds, but nothing in the agency’s existing framework anticipated a judicial invalidation of this magnitude. The Penn Wharton Budget Model flagged the potential scale of refunds immediately after the ruling, and Justice Brett Kavanaugh, in his dissent, warned that the decision could put the U.S. Treasury in a serious bind by transforming what had been a politically popular revenue stream into a legally compelled outflow to the very firms that had lobbied for tariff relief all along.
Refunds Flow to Importers, Not to Shoppers
The central inequity is structural. Under federal customs law, tariff refunds are built around import entries and importer claims, as a Congressional Research Service analysis of IEEPA refund mechanics explains. That means the entity that paid the duty to CBP, typically a corporation or its customs broker, is the party eligible to file a protest or request reliquidation. Consumers who absorbed the cost through higher retail prices have no direct claim on the Treasury. They were never the taxpayer of record, even though they bore the economic burden in the form of higher prices for everyday goods ranging from smartphones to washing machines.
The existing drawback program, which allows companies to recover duties on imported goods that are later exported, already illustrates this corporate tilt. A Government Accountability Office report found that drawback refunds can reach up to 99% of certain duties and that the program disburses about $1 billion per year under normal conditions, largely to firms with the sophistication to navigate complex paperwork and documentation rules. With tens of billions now potentially eligible for return, the same administrative channels that process routine drawback claims will likely be flooded by corporate refund requests, while households that paid inflated prices for electronics, clothing, and groceries have no equivalent pathway. Economists have cautioned that even if companies temper future price increases after the ruling, any effect on consumer prices would take considerable time to materialize, and there is no legal requirement that firms pass any refunds they receive back to shoppers.
Small Businesses Face a Steeper Climb Than Multinationals
Even among businesses, the refund process is not a level playing field. Large importers with dedicated trade compliance teams and customs attorneys can file protests quickly, track liquidation windows, and pursue court-ordered reliquidation if CBP denies their claims. Small businesses, by contrast, often lack the resources and legal expertise to engage with CBP’s administrative machinery on tight deadlines. The CRS insight on IEEPA refunds makes clear that the process hinges on specific import entries and precise timing, meaning a missed filing window can eliminate a refund claim entirely regardless of its merit, and many smaller firms only learn about their rights after those windows have quietly closed.
U.S. Congressman Greg Stanton, a Democrat representing Arizona’s 4th District, introduced the RELIEF Act on the same day as the Supreme Court ruling. The bill would provide automatic tariff refunds to small businesses, bypassing the protest and reliquidation process that favors well-resourced firms and directing CBP to identify eligible entries proactively. Whether the legislation advances is uncertain, but its introduction signals recognition in Congress that the default refund system will channel the bulk of returned money toward the largest importers. Stanton’s office framed the measure as an attempt to prevent “a second injustice” in which small retailers and manufacturers that survived the tariff shock are shut out of the windfall that follows its demise.
Consumers Are the Political Wild Card
For now, the people most directly affected by the tariffs (millions of American consumers) remain largely outside the legal conversation. A post-ruling Q&A by the University of Virginia’s Darden School of Business emphasized that the court’s decision does not itself create any mechanism for compensating shoppers, and that questions about who ultimately benefits from the refunds are “where the politics get messy.” Lawmakers could, in theory, design a rebate or tax credit aimed at households that bore the brunt of higher prices, but such a program would require new legislation, new administrative systems, and difficult choices about how to estimate who paid what in a sprawling consumer economy.
In the absence of such a program, the politics of the ruling may hinge on perceptions rather than direct checks in the mail. The administration can point to the end of tariffs as a step toward easing inflation, while critics can highlight that the immediate cash benefits are flowing to corporations that already profited from strong pricing power during the tariff years. With CBP continuing to report elevated customs revenues in its ongoing trade data, and with refund claims likely to unfold quietly through technical channels and settlement agreements, the Supreme Court’s decision may deepen public skepticism about who really wins and loses when trade policy is made, and unmade, by executive order.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
