Most Americans won’t see a dime from Trump’s tariff refunds, despite paying higher prices

Court rules Trump tariffs were unlawful

The Supreme Court ruled 6-3 on Feb. 20 that President Trump did not have the power to impose tariffs under the International Emergency Economic Powers Act (IEEPA).

Chief Justice Roberts wrote the majority opinion, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. Justices Thomas, Kavanaugh, and Alito dissented.

The case, Learning Resources, Inc. v. Trump, was brought by small businesses and 12 states. The decision struck down the broad “reciprocal” tariffs and country-specific tariffs on Canada, Mexico, and China.

Importers paid the tariffs, not foreign countries

Tariffs are taxes on imported goods, and the companies bringing those products into the country pay them at the border.

That includes big retailers like Costco, Walmart, and Target, plus thousands of smaller businesses. Those companies then pass the costs along to shoppers through higher prices on everyday items.

A New York Federal Reserve study found that about 90% of tariff costs in 2025 landed on U.S. firms and consumers, not foreign exporters.

The White House disputed those findings.

Households paid about $1,000 more in 2025

The Tax Foundation estimated tariffs cost the average U.S. household about $1,000 last year. That number was on track to hit $1,300 per household in 2026 if the tariffs stayed.

The Yale Budget Lab says the ruling will cut that burden roughly in half, to about $600 to $800 this year. The remaining costs come from tariffs the court did not touch, including those on steel, aluminum, and autos.

Lower-income families feel the hit hardest relative to what they earn.

Government collected billions, but consumers won’t see refunds

The government collected an estimated $134 billion to $175 billion in IEEPA tariff payments through February 2026. But any refunds go to the importers, meaning the companies that paid at the border.

Shoppers who dealt with higher prices at the register will not get money back from the government. There is simply no way to trace a specific price increase at a store back to a specific tariff payment.

The refund process itself could drag on for years.

Refund cases could clog courts for years

The Supreme Court did not address how refunds should work, leaving that to lower courts. Justice Kavanaugh warned in his dissent that the process would likely be a “mess.”

Trump told reporters refunds could take up to five years to sort out. Treasury Secretary Bessent said the government has enough cash to cover them but called the process a potential “corporate boondoggle.”

The Court of International Trade in New York will handle most refund cases going forward.

Companies are already suing for their money

FedEx sued the government on Feb. 24 seeking a full refund of all IEEPA tariffs it paid. Costco, Revlon, and Bumble Bee Foods filed lawsuits even before the Supreme Court ruled.

Nearly 2,000 importers had already brought refund cases to the Court of International Trade before the decision came down.

Trade lawyers expect that number to grow fast in the coming weeks. Some manufacturers may also sue suppliers who raised prices to cover tariff costs, adding even more legal battles.

No law forces companies to lower prices

Even if importers get refunds, nothing requires them to cut prices for shoppers. One economist at Wolfe Research said companies are unlikely to start lowering prices as a result.

Some small business owners say they would pass savings along, but the math gets complicated. Tariff costs included supply chain changes, rushed orders, and sped-up production.

Senate Democrats introduced the Tariff Refund Act of 2026, which encourages large importers to pass refunds to customers, but the bill has no enforcement mechanism on that point.

Trump’s $2,000 dividend checks look dead

Trump first proposed $2,000 “tariff dividend” checks for middle- and lower-income Americans in July 2025.

He wrote on Truth Social in November 2025 that the checks would go to everyone except high earners. But the plan always needed Congress to pass a bill, and that never happened.

A Bankrate financial analyst said the odds of the checks moving forward are “now effectively zero” after the ruling. The White House has not officially dropped the idea but has not taken steps to revive it.

New 10% tariff took effect within hours

Hours after the ruling, Trump signed an executive order putting a new 10% global tariff in place under Section 122 of the Trade Act of 1974.

The new tariff took effect on Feb. 24.

Trump announced plans to raise the rate to 15%, the maximum allowed under Section 122, but has not signed a formal order for that increase.

Section 122 tariffs can only last 150 days without an act of Congress. That means the new tariff would expire around July 24 unless lawmakers vote to extend it.

Legal experts question the replacement tariff

No president has ever used Section 122 before.

The law requires a “fundamental international payments problem,” specifically a large and serious trade deficit. Some legal experts argue those conditions may not actually exist, since the U.S. runs a surplus in services.

The administration also directed the U.S. Trade Representative to launch new investigations against major trading partners, which could lead to longer-lasting tariffs.

Tariffs on steel, aluminum, and autos remain fully in effect and were not part of this ruling.

Democrats push a refund bill with long odds

Senate Democrats introduced the Tariff Refund Act of 2026, led by Sens. Ron Wyden, Ed Markey, and Jeanne Shaheen with 19 co-sponsors.

The bill would require Customs and Border Protection to refund all IEEPA tariffs within 180 days, with interest, and would put small businesses first in line. A companion bill, the RELIEF Act, landed in the House.

Both face long odds in a Republican-controlled Congress. A White House spokesperson called the Senate bill “pathetic but unsurprising.”

Prices are unlikely to drop anytime soon

The ruling removes the largest chunk of Trump’s tariffs, but Americans are not getting direct refunds. The replacement Section 122 tariff keeps import taxes in place, though at lower rates for most countries.

The Yale Budget Lab projects the average household will still pay $600 to $800 more this year because of remaining tariffs.

Prices that went up are unlikely to come back down quickly, even with the ruling. The next key date is July, when the Section 122 tariff is set to expire.

This article was created with AI assistance and human editing.

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