Trump Collected $133 Billion From Tariffs. Who Gets That Money Now?

The US Supreme Court has dealt a big blow to President Donald Trump's administration by scrapping his sweeping emergency tariffs -- a move that could potentially redirect the course of the administration's economic and foreign policy agenda. But the ruling left a costly question unanswered--  what's going to happen to the $133 billion the government has already collected in import taxes now declared unlawful?

Illinois Governor JB Pritzker, a Democrat, sent Trump an invoice demanding nearly $9 billion in tariff refunds for the families in his state after the top court ruled the president's much-touted levies were illegal. "Your tariff taxes wreaked havoc on farmers, enraged our allies, and sent grocery prices through the roof," Pritzker wrote, warning further legal action could follow if compensation was not forthcoming.

In the letter, shared with US media, the Democrat demanded about $1,700 for every Illinois household--the amount Yale University experts said the average US household would pay on tariffs last year.

Pritzker wasn't alone in seeking payback--both political and literal--for widespread consumer woes. Companies have also lined up for refunds. But the way forward could prove chaotic.

Doubts Over Trump Tariff Refunds

After the Supreme Court ruling, the consumers who are hoping for a refund for the higher prices they paid when companies passed along the cost of the tariffs to them, but that's unlikely to happen. 

Team Trump has promised refunds of duties collected, both formally and informally. But neither the administration nor the Supreme Court has specified how the process would work. 

The scale of potential repayments is vast. The influential Penn-Wharton Budget Model has estimated that refunds could total $175 billion, though it's unclear who would ultimately receive the money.

But the amount is more likely to go to the companies themselves, as the US Treasury Secretary Scott Bessent has expressed skepticism that ordinary Americans will ever see direct compensation. 

Trump himself acknowledged that any refund process could take years. "I guess it has to get litigated for the next two years," Trump told reporters at a press conference on Friday.

"We'll end up being in court for the next five years," he added.

That's a harsh shift for those who may have hoped for a tariff "dividend" check after the 79-year-old Republican repeatedly said last year that millions of Americans would get "a little rebate" because "we have so much money coming in." 

The Looming 'Mess' 

In his dissent, Trump-appointed conservative Justice Brett Kavanaugh noted the Supreme Court ruling "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."

Borrowing a word that Justice Amy Coney Barrett--who sided with the majority--used during the court's November hearing on the case, Kavanaugh warned that "the refund process is likely to be a 'mess.'"

According to the US Customs Agency data, $133 billion has already been collected in tariffs as of mid-December. But the agency does have a process for refunding duties when importers can show there's been some kind of error. 

The Road Ahead

The agency might try to build on the existing system to refund Trump's IEEPA tariffs, trade lawyer Dave Townsend, a partner with the law firm Dorsey and Whitney, said while talking to the Associated Press. 

In the past, there has been a precedent for courts making arrangements to give companies their money back in trade cases. In the 1990s, the courts struck down as unconstitutional a harbor maintenance fee on exports and set up a system for exporters to apply for refunds.

But the courts and US customs have never had to deal with anything like this--thousands of importers and tens of billions of dollars at once.

Traders' Concerns

When the smoke clears, trade lawyers believe, importers are likely to get money back--eventually. 

"It's going to be a bumpy ride for a while," trade lawyer Joyce Adetutu, a partner at the Vinson and Elkins law firm, said while talking to AP.

The refund process is likely to be hashed out by a mix of the US Customs and Border Protection agency, the specialised Court of International Trade in New York, and other lower courts, according to a note to clients by lawyers at the legal firm Clark Hill.

"The amount of money is substantial," Adetutu said. "The courts are going to have a hard time. Importers are going to have a hard time.''

Still, she added, "It's going to be really difficult not to have some sort of refund option'' given how decisively the Supreme Court repudiated Trump's tariffs.

Trade lawyer Alexis Early, partner at the law firm Bryan Cave Leighton Paisner, however, lamented that just because the process is difficult to administer doesn't mean the government has the right to hold on to fees that were collected unlawfully.

Ryan Majerus, a partner at King and Spalding and a former US trade official, said it's hard to know how the government will deal with the massive demand for refunds. It might try to streamline the process, perhaps setting up a special website where importers can claim their refunds.

Many companies, including Costco, Revlon, and canned seafood and chicken producer Bumble Bee Foods, have already filed lawsuits claiming refunds--even before the Supreme Court ruled--essentially seeking to be at the head of the line if the tariffs were struck down.

There are likely to be more legal battles ahead. Manufacturers might, for example, sue for a share of any refunds given to suppliers that jacked up the price of raw materials to cover the tariffs.