The U.S. government has paid out $81 billion in tariff refunds so far this fiscal year following a Supreme Court ruling that invalidated a significant portion of President Donald Trump’s blanket tariffs, according to budget figures released Monday.
Supreme Court Ruling and Legal Basis
On February 20, 2026, the U.S. Supreme Court ruled that global tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) were unlawful. The court observed that the constitutional power to regulate international trade and levy taxes rests with Congress, rather than giving the president unilateral authority to impose such tariffs.
Following the decision, the government was ordered to return duties collected under the invalidated regime. To facilitate this, a government-run tariff refund portal opened in late April. A total of $166 billion in tariffs, plus interest, is potentially eligible for refunds.
Fiscal Impact and Budget Deficits
The scale of the refunds has created a significant gap in government revenue. In June alone, the U.S. sent out $49.1 billion in refunds, which far exceeded the $23.6 billion in tariff revenue collected during the same period. This follows May, where refunds and revenue were more closely aligned at approximately $21.9 billion each.
Budget data shows that the $81 billion paid out since the start of the fiscal year in October 2025 is a sharp increase from the $5 billion paid during the same period last year. A Treasury Department official attributed this spike almost entirely to the Supreme Court decision.
These payouts have coincided with a growing federal budget deficit. The deficit reached $1.367 trillion in the first nine months of the fiscal year, a 2% increase. The Committee for a Responsible Federal Budget noted that this figure is already larger than the total deficit for all of fiscal year 2025, with projections suggesting the deficit could top $2 trillion for the full year. Other contributing factors include a 14% increase in debt interest payments—totaling over $1 trillion—and a 5% rise in military spending due to conflict in the Middle East.
Impact on Global and Domestic Businesses
The refund process is managed by U.S. Customs and Border Protection (CBP), which had processed $71 billion in global refunds as of June 29. However, the structure of the reimbursement creates hurdles for some businesses:
- Importers of Record: Refunds are paid only to the registered U.S. importer who originally paid the duties.
- Foreign Exporters: Exporters, such as those in India, have no legal right to claim refunds directly from the U.S. government. They must rely on their U.S. buyers to pass the money back to them. Despite this, over $1 billion has already reached Indian exporters in sectors like seafood, gems, jewelry, and textiles.
- Small Retailers: Small business owners who buy from third-party distributors rather than importing directly are ineligible to apply for refunds.
Current Trade Status and Future Outlook
While the Supreme Court struck down the IEEPA tariffs, the administration has continued to adjust trade policy. President Trump has created specific exemptions for farm equipment and Moroccan fertilizer in response to price pressures. Monthly tariff revenue, which peaked at $31.35 billion last October, has generally declined since then.
The current temporary 10% global tariff is scheduled to expire on July 24. However, the White House is preparing new duties based on excess industrial capacity and what it describes as lax enforcement of anti-forced labor laws.
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