Eighty-one billion dollars.
That is how much the U.S. Treasury has refunded in tariffs since October, according to budget figures released Monday — money the government collected before the Supreme Court ruled in February that President Donald Trump had no legal authority to impose the duties in the first place. Compare that to the $5 billion refunded over the same stretch the year before: this fiscal year’s refund pace is running more than sixteen times faster.
A Treasury Department official told reporters the spike is “almost entirely” the result of the Supreme Court’s tariff ruling, with most of the money going out the door in May and June. Tariffs — taxes on imported goods — had been a centerpiece of Trump’s economic agenda since he returned to office last year, pitched as a tool to bring factories home, extract better trade terms and shrink the federal deficit.
Why the tariffs were struck down
The ruling itself came on Feb. 20, when the justices split 6-3 and found that the International Emergency Economic Powers Act, a 1977 law meant to let presidents respond to foreign threats, never gave Trump the power to set tariffs at all. Chief Justice John Roberts wrote the majority opinion, and his reasoning was almost dismissive of the administration’s case: IEEPA does not authorize the President to impose tariffs.
The two sets of duties at issue were the “trafficking tariffs” on China, Canada and Mexico, justified by fentanyl flows, and the broader “reciprocal” tariffs Trump slapped on nearly every trading partner to address the trade deficit. Roberts leaned on the “major questions” doctrine — the same legal theory the Court used in 2023 to strike down Biden’s student-loan forgiveness plan — to conclude that a decision this consequential needed clearer authorization from Congress than two words buried in an emergency statute.
Justice Brett Kavanaugh, writing for the three dissenters, didn’t dispute that a reckoning was coming. He warned the government:
“…may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.”
Justice Brett Kavanaugh, dissenting opinion
That warning is essentially what’s now playing out in the Treasury’s books.
What the refunds mean for the deficit
Here’s the twist the tariff program’s backers didn’t advertise: the deficit had actually narrowed slightly last year, helped along by tariff revenue. It’s growing again. The gap hit $1.367 trillion over the first nine months of this fiscal year, up 2% from the same period a year ago — and that’s before accounting for the refund checks still going out.
Two other numbers explain the rest of the pressure. Interest payments on the federal debt topped $1 trillion for the nine-month stretch, up 14%. And military spending climbed 5%, driven by the ongoing conflict in the Middle East — the same conflict that has separately pushed oil prices to a one-month high this week as the U.S. and Iran trade attacks in the Strait of Hormuz. A revenue line that was supposed to help close the gap is instead adding to it, at the same moment two other costs are rising on their own.
None of this closes the book on tariffs generally. The Court’s ruling was narrow in an important sense: it said Trump couldn’t use IEEPA to do this, not that a president can never impose tariffs. Kavanaugh’s dissent pointed out that numerous other federal statutes authorize the President to impose tariffs
— a menu of alternative legal tools the administration has been working through since February, with results that will take months to show up in the same budget tables now recording the refunds.
Frequently asked questions
Why did the Supreme Court rule the tariffs illegal?
Because the 1977 law Trump cited, the International Emergency Economic Powers Act, never mentions tariffs or duties. The Court’s 6-3 majority found that Congress would have had to authorize a power this significant in explicit terms, not through the general word “regulate.”
Who actually gets the refund money?
The companies and importers who paid the tariffs when goods entered the country — not necessarily consumers, even though many of those costs were passed along the supply chain, a point Kavanaugh raised directly in his dissent.
Does this end Trump’s tariffs for good?
No. The ruling blocked one legal route — IEEPA — not the president’s tariff authority altogether. Other statutes with their own procedural requirements remain available, which is why the refund total is a snapshot of one program’s undoing rather than a close of the tariff era.
How large could the total refund bill get?
Total IEEPA tariff collections were estimated last year at more than $200 billion, though the Court left the mechanics of repayment to the executive branch rather than spelling them out itself. The $81 billion paid out so far this fiscal year is the clearest real-world marker of how much of that is actually flowing back.
For now, the paperwork is doing what the courtroom fight settled in February: sending real money back out the door, one refund check at a time, into a budget that’s short more than a trillion dollars regardless of how the tariff dispute resolves. Related: who actually pays a tariff once it’s collected.
