The $166 Billion Question: Americans Paid for Trump's Illegal Tariffs — Will They Ever See a Dime Back?

On February 20, 2026, the United States Supreme Court did something that hadn't happened in modern American history: it declared an entire tariff regime unlawful. In a landmark 6–3 decision in Learning Resources, Inc. v. Trump, the Court held that the International Emergency Economic Powers Act (IEEPA) does not grant the president the power to impose tariffs — a power the Constitution reserves exclusively for Congress [1][2].

The ruling instantly raised an uncomfortable question worth approximately $166 billion: Who gets the money back?

For the more than 330,000 importers who paid duties on over 53 million customs entries since February 2025, the answer is theoretically straightforward — they're in line for refunds. But for the hundreds of millions of American consumers who actually absorbed those costs in the form of higher prices on everything from groceries to electronics, the path to a refund is far murkier [3][4].

How We Got Here: A Year of Unprecedented Tariffs

President Trump's tariff campaign began on what the administration dubbed "Liberation Day" in April 2025, when sweeping "Reciprocal Tariffs" were imposed on imports from nearly every country on earth. Additional "Trafficking and Immigration Tariffs" targeting fentanyl followed shortly after, all authorized under IEEPA — a 1977 law originally designed to give the president emergency powers over financial transactions, not trade policy [1][5].

The scale was staggering. According to the Tax Foundation, the tariffs represented the largest U.S. tax increase as a percentage of GDP since 1993, amounting to an average tax increase of roughly $1,500 per American household in 2026 [6]. Retail prices on imported goods rose approximately 7 percentage points relative to pre-tariff trends. Specific categories were hit even harder: the price of beef increased 16 percent, coffee rose by nearly 20 percent, and fruits and seafood each climbed more than 6 percent between early 2025 and year's end [6][7].

Source: FRED / Bureau of Labor Statistics

Data as of Mar 3, 2026CSV

The administration also ended the so-called de minimis exemption — the provision allowing packages valued under $800 to enter the country duty-free — first for China and Hong Kong in May 2025, then for all countries in August 2025. With nearly four million such packages entering the U.S. daily, accounting for over 1.3 billion shipments annually, the move struck directly at consumers who purchased goods from platforms like Temu and Shein, both of which were forced to raise prices or restructure their business models [8][9].

The Supreme Court Strikes Down IEEPA Tariffs

The legal challenge came from Learning Resources, Inc., a toy company, and was eventually consolidated with suits from hundreds of other importers. After the U.S. Court of Appeals for the Federal Circuit struck down the IEEPA tariffs in August 2025, the case reached the Supreme Court on an expedited timeline [1][2].

Writing for the 6–3 majority, the Court concluded that IEEPA's grant of authority to "regulate … importation" does not include the power to impose tariffs, emphasizing that the tariff power is "very clearly … a branch of the taxing power" reserved for Congress under Article I of the Constitution [1][2].

The ruling invalidated both the Reciprocal Tariffs and the Trafficking and Immigration Tariffs. But notably, the Court did not address whether refunds must be issued, nor did it prescribe any mechanism for reimbursement — leaving that volatile question to the lower courts and Congress [2][5].

$166 Billion in Refunds — But to Whom?

On March 4, 2026, Judge Richard Eaton of the U.S. Court of International Trade (CIT) ordered U.S. Customs and Border Protection to begin processing refunds of all IEEPA tariffs. The order directed CBP to liquidate all unliquidated entries without IEEPA duties and to reliquidate entries where liquidation isn't yet final. Crucially, Judge Eaton ruled that the refund order applies to all importers — not only those that had filed individual lawsuits [10][11].

The scale is enormous. CBP has collected approximately $166 billion in IEEPA duties and estimated duties, according to court filings. The Penn Wharton Budget Model estimates businesses could be owed up to $165 billion in refunds [3].

But there's a critical distinction that most consumers are only now learning: the refunds go to importers, not to the people who actually paid for the tariffs through higher prices at the register.

"Consumers paid for tariffs indirectly," CNN reported. "They're mostly not the ones making the actual payment to the government. When — and perhaps if — any funds are returned, they'll go to what's known as the importer of record, i.e., the party that paid the initial tariff bill" [4].

According to a study by the Federal Reserve Bank of New York, consumers and businesses absorbed nearly 90 percent of U.S. tariffs in the form of higher costs in the year the tariffs were in effect [4].

Source: GDELT Project

Data as of Mar 9, 2026CSV

CBP Says It Can't Process Refunds Yet

Even for importers with a clear legal claim, the road to reimbursement is fraught with logistical challenges. On March 6, 2026, CBP told the court that its computer systems are not equipped to immediately process refunds at the required scale — 53 million entries across 330,000 importers [12][13].

The agency said it is developing new functionality within its Automated Commercial Environment (ACE) system to streamline and consolidate refunds on an importer-by-importer basis, rather than issuing tens of millions of individual refunds. CBP estimated it would need 45 days to build the new system, with refunds potentially beginning by late April 2026 [12][13].

President Trump, for his part, told reporters the process could take up to five years [3]. And the administration has signaled it may appeal the CIT's refund order, adding further uncertainty to the timeline [11].

The Consumer Refund Gap

The central tension in the refund debate is what legal experts are calling the "consumer refund gap" — the structural disconnect between who receives the government refund and who actually bore the economic burden.

Some companies have proactively stepped forward. FedEx, which billed customers itemized tariff-related fees, pledged that "if refunds are issued to FedEx, we will issue refunds to the shippers and consumers who originally bore those charges" [14]. Cards Against Humanity, the irreverent card game maker, announced it would refund any customer who "overpaid" for one of their games, offering an online form for claims. Dame Products, a direct-to-consumer company, began issuing automatic refunds immediately rather than waiting for CBP to act [14][15].

But these are exceptions. Most importers — particularly those that sell components to other businesses, or that absorbed tariffs through general price increases rather than itemized surcharges — have no clear obligation or even mechanism to pass refunds back to end consumers.

Class Action Lawsuits Emerge

Into this gap, plaintiffs' attorneys have stepped aggressively. Within two weeks of the Supreme Court ruling, class action lawsuits were filed against FedEx, UPS, and EssilorLuxottica (the parent company of Ray-Ban and Oakley), among others [16][17].

The FedEx and UPS suits allege the shipping giants collected itemized tariff-related charges and ancillary brokerage fees from consumers that were directly tied to the now-invalidated IEEPA tariffs. The plaintiffs argue that retaining these funds constitutes unjust enrichment [16].

The EssilorLuxottica case takes a different approach, alleging that the company's general retail price increases — publicly attributed to IEEPA tariffs — functioned as de facto "tariff surcharges," even though they weren't itemized separately. This theory, if successful, could open the door to lawsuits against virtually any retailer that raised prices during the tariff period [16][17].

Arnold & Porter, the law firm, described these consumer class actions as "the next wave of tariff litigation," noting that the legal theories are largely untested and outcomes highly uncertain [17].

Congress Enters the Fray

Senate Democrats have introduced the Tariff Refund Act of 2026, led by Senators Ron Wyden, Ed Markey, and Jeanne Shaheen, along with 23 co-sponsors. The bill would require CBP to process all refunds with interest within 180 days of enactment and would prioritize payments to small businesses [18][19].

A key provision expresses the "Sense of Congress" that importers, wholesalers, and large corporations should pass refunds on to their customers. However, the bill notably stops short of mandating consumer pass-through — a critical limitation that consumer advocates have criticized [18][19].

Some Democrats have gone further. Senator Markey and others have urged businesses directly to pass along refunds, with Axios reporting that Democrats are demanding roughly $1,700 in tariff refunds per American household [20]. New York Governor Kathy Hochul has also called for direct consumer reimbursement [20].

But with Republicans controlling Congress and the White House, the Tariff Refund Act faces steep odds. And even if passed, its consumer provisions would remain aspirational rather than binding.

Prices May Not Come Down Either Way

Perhaps the most sobering reality for consumers is what economists call "sticky prices" — the tendency for prices to rise quickly in response to cost increases but to decline slowly, if at all, when those costs are removed.

NPR and OPB reported that economists broadly agree prices are unlikely to drop significantly in the wake of the Supreme Court ruling, even as tariffs are unwound. "The longer tariffs last, in whatever form, the more their costs are passed through to consumers," the Peterson Institute for International Economics noted [7][21].

Moreover, on the same day as the Supreme Court ruling, President Trump issued a new proclamation under Section 122 of the Trade Act of 1974, imposing a 10 percent "temporary import surcharge" on products from all countries for 150 days. This separate legal authority was not challenged by the Supreme Court decision, meaning new tariffs immediately replaced many of the old ones [1][5].

Analysis from the Yale Budget Lab found that the new tariff regime is "set to be similar overall to their level prior to the court ruling, so consumers will continue to feel this tax increase" [5].

Source: Goldman Sachs / JPMorgan Research

Data as of Mar 9, 2026CSV

The Five-Year Question

For consumers, the tariff refund saga has exposed a structural flaw in how trade policy costs are distributed and remedied in America. Tariffs function as a consumption tax — they raise prices for everyone — but the legal and administrative mechanisms for refunding them were designed exclusively for the businesses that write checks to customs, not the families that pay more at checkout.

The coming months will be shaped by several parallel tracks: CBP's 45-day timeline to build a refund system; the Trump administration's likely appeal of the CIT order; the fate of the Tariff Refund Act in Congress; and the progression of class action lawsuits that could take years to resolve.

Goldman Sachs estimated that U.S. consumers absorbed 55 percent of tariff costs by late 2025, a share that JPMorgan projected could shrink to just 20 percent as businesses increasingly passed costs along [7]. In other words, by the time tariffs were struck down, consumers had already borne the brunt of the damage.

"Trump's tariffs likely cost you hundreds of dollars," NPR reported in late February. "Will you get a refund?" The honest answer, for most Americans, appears to be: probably not — at least not directly, and certainly not soon [3].

The $166 billion may eventually find its way back to importers. Whether any meaningful share reaches the wallets of ordinary Americans depends on corporate goodwill, untested legal theories, and legislation that may never pass. For a program that was, at its core, a tax on American consumers, the refund process was designed for everyone except them.