The Supreme Court’s recent ruling striking down billions of dollars in emergency tariffs imposed during the Trump administration has triggered a scramble among American businesses to reclaim the funds they paid. While the total is estimated at roughly $180 billion – according to an analysis by Goldman Sachs – the question of whether individual consumers will see a refund remains largely unanswered, and increasingly complex.
The tariffs, initially levied on goods imported from China and elsewhere, were intended to protect American industries and address trade imbalances. However, the Court found the legal basis for their implementation to be flawed, opening the door for businesses to seek reimbursement. The bulk of the tariff payments were made directly by companies to U.S. Customs and Border Protection, meaning initial refunds will likely flow to them, according to Robert Shapiro, an international trade lawyer at Thompson Coburn.
“And if you do [receive a refund as a consumer], it’ll be pennies on the dollar,” Shapiro said. He explained that even if companies do receive full reimbursement from the federal government, there’s no guarantee those savings will be passed on to shoppers. “They’ll just take it as a gain,” he stated.
The prospect of a direct payout to consumers has gained traction among some Democratic leaders. Illinois Governor JB Pritzker sent a letter and invoice to former President Trump demanding a $1,700 refund for every Illinois family, while California Governor Gavin Newsom issued a similar call for checks to be sent to residents. However, the path to such a resolution is fraught with logistical challenges.
A significant hurdle is that the tariff revenue was deposited into the U.S. Treasury’s general fund, not a dedicated account. While the Treasury could theoretically issue checks to taxpayers, doing so would create a potential double-counting issue. Companies would still have a legitimate claim to the refunds, potentially inflating the overall cost to the government. Former President Trump acknowledged the potential for prolonged legal battles over the issue.
“I guess it has to get litigated over for the next two years,” Trump said during a press conference following the Supreme Court’s decision.
Beyond the accounting complexities, the structure of global supply chains presents a significant obstacle to individual consumer refunds. Many products are assembled from components sourced from multiple countries, each potentially subject to different tariffs. Determining the precise portion of a product’s price attributable to a specific tariff, and then tracing that cost back to the individual consumer, is a daunting task.
“Tracing that through — it may be literally impossible,” said Michael Ettlinger, a senior fellow at the Institute on Taxation and Economic Policy. He noted that for many goods, tariff costs were distributed across numerous companies within the supply chain – from raw material suppliers to importers, wholesalers, and retailers.
However, some companies were more transparent about passing tariff costs on to consumers. Athletic wear company Fabletics, for example, implemented a clearly labeled tariff surcharge at checkout. Erin Vandenberg, a Fabletics member, noticed a $3.95 tariff surcharge on a $69.95 sports bra last year. “They’re making it very obvious what’s happening,” Vandenberg said, adding that the surcharge did give her pause about the purchase.
In a statement, Fabletics explained that the surcharge was implemented “to be transparent with consumers and ensure we can continue providing the highest-quality products at the most competitive prices.” The company acknowledged the Supreme Court ruling but noted that tariffs remain in place on some goods and that the implications of the decision are still being assessed.
Vandenberg, who has no record of tariff surcharges from other businesses, expressed a willingness to join a class action lawsuit to recover those funds. “At this point, I experience like those are sometimes the only way you can hold businesses, or companies, or the government accountable,” she said.
As of today, the U.S. Treasury has not announced a plan for distributing tariff refunds, and the Biden administration has remained largely silent on the issue. The Department of Justice has not indicated whether it will defend the original tariffs in further litigation, leaving the future of the funds – and the possibility of consumer refunds – uncertain.
