Democrats want the government to refund billions in illegal tariffs

New bill targets struck-down tariffs

Senate Democrats introduced a bill on Feb. 23 that would force the federal government to pay back tariffs the Supreme Court just ruled illegal.

Three days earlier, the court voted 6-3 that President Trump could not use the International Emergency Economic Powers Act (IEEPA) to impose tariffs.

Chief Justice John Roberts wrote the majority opinion in the case, Learning Resources, Inc. v. Trump.

Now Democrats want every dollar collected under those tariffs returned.

Three senators lead the push

Sens. Ron Wyden of Oregon, Ed Markey of Massachusetts, and Jeanne Shaheen of New Hampshire led the bill, called the Tariff Refund Act of 2026.

Nineteen other senators signed on, including Senate Democratic Leader Chuck Schumer and Sens. Dick Durbin, Maria Cantwell, Patty Murray, Tim Kaine, Jacky Rosen, Adam Schiff, and Angus King, an independent from Maine.

No Republican senators have backed the bill, and Republicans control the Senate.

The bill lays out a refund timeline

The bill would give U.S. Customs and Border Protection (CBP) 180 days to process all refunds once it becomes law. CBP would also owe interest on every dollar it returns.

Importers would not have to jump through extra paperwork hoops to get their money back, and even shipments CBP already closed out would qualify.

The agency would also work with the Small Business Administration to help smaller companies through the process.

Small businesses move to the front

CBP would have to put small businesses first in line for refunds under the bill. Many small importers do not have lawyers or trade teams to fight for their money.

Sen. Markey said the bill would level the playing field so smaller companies are not left behind. CBP would also have to send Congress a progress report every 30 days, so lawmakers can track how fast refunds go out.

Estimates put the total near $175 billion

The Penn Wharton Budget Model, a nonpartisan research group at the University of Pennsylvania, puts the potential refund total at roughly $175 billion. That is an estimate, not a confirmed government figure.

CBP’s last official count was about $133.5 billion collected under IEEPA through mid-December 2025. The Tax Foundation separately figured more than $160 billion came in through the ruling date.

IEEPA tariffs made up about half of all customs duties collected since January 2025.

Importers get the refunds, not shoppers

The money would go to the businesses that paid the tariffs at the border, not to everyday shoppers.

The bill includes a “sense of Congress” urging large companies to pass savings along to customers, but it does not make them do it.

Rough math puts the $175 billion total at about $1,300 per U.S. household, but that does not mean anyone would get a check. Whether prices drop depends on what businesses choose to do.

The Supreme Court left refunds unsettled

The court struck down the IEEPA tariffs but did not order the government to hand out refunds. Instead, the justices sent the case back to the U.S. Court of International Trade to figure out the next steps.

Justice Brett Kavanaugh warned in his dissent that the refund process would likely be a “mess.”

The ruling opened the door for importers to claim their money back, but nobody knows exactly how that process will work yet.

The White House pushed back quickly

A White House spokesperson called the Democratic bill “pathetic but unsurprising.”

Treasury Secretary Scott Bessent said the Supreme Court did not address refunds and that the issue could take weeks, months, or years to sort out in court.

President Trump suggested refund fights could drag on for two to five years. U.S. Trade Representative Jamieson Greer said the matter belongs to the courts to decide.

Trump imposed new tariffs within hours

Hours after the Supreme Court ruling, President Trump announced new tariffs under Section 122 of the Trade Act of 1974.

He started with a 10% global tariff, then bumped it to 15% the next day, the maximum allowed under that law. These replacement tariffs can stay in place for up to 150 days without Congress signing off.

Americans are still paying tariffs on imports under these new rules and other existing tariffs on steel, aluminum, and cars.

Other Democrats filed their own bills

Democrats in the House brought their own versions. Reps.

Steven Horsford of Nevada and Janelle Bynum of Oregon introduced the RELIEF Act, which would require automatic refunds of IEEPA tariffs collected since January 2025.

Rep. Jasmine Crockett of Texas introduced the Payback Act, directing the Treasury Secretary to refund consumers for higher costs resulting from illegal tariffs.

Schumer also announced a push to block Trump’s new Section 122 tariffs when they expire this summer. All face the same problem: Republicans control Congress.

Companies already started filing lawsuits

Hundreds of companies, including Costco and Revlon, filed lawsuits seeking tariff refunds even before the Supreme Court ruled. FedEx filed suit after the decision.

Some small business owners tried to request refunds through CBP’s online portal but ran into errors and long waits. Trade lawyers say many importers may need to go to court to get their money back.

TD Securities estimates refunds could take 12 to 18 months to arrive, even under the best conditions.

Americans still face tariffs on many goods

Even with the IEEPA tariffs gone, new tariffs under Section 122 and existing tariffs on steel, aluminum, and cars remain in place.

The Tax Foundation estimated remaining tariffs will cost U.S. households about $400 on average in 2026. Whether the Tariff Refund Act passes or not, the refund process will likely take months or years.

Consumers probably will not see direct payments. Any relief would come only if importers decide to lower their prices.

This article was created with AI assistance and human editing.

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