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By Hugh Cameron
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The Supreme Court's tariff ruling is expected to force the government to return billions of dollars collected through now-annulled levies, a move some experts say could strain federal finances and ultimately hurt American taxpayers.
In a landmark 6-3 decision on Friday, the court ruled that Trump had overstepped his legal authority in using the 1977 International Emergency Economic Powers Act (IEEPA) to impose the majority of his global tariffs.
Thiemo Fetzer, a professor of economics at the University of Warwick in the U.K., told Newsweek that the ruling creates a "fiscal shadow" as the illegally collected tariff revenues may now need to be refunded, "worsening the U.S. fiscal position going forward and indirectly driving up taxes and interest rates for U.S. consumers."
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Given the costs of litigation and interest on duties—for which it could also be held liable—he added that the government might have to "reimburse large chunks" of customs revenue "at a premium" to the original amount paid by importers.
Some companies have commenced this process, with FedEx on Monday filing a lawsuit against Customs and Border Protection (CBP) and seeking a "full refund" of the IEEPA duties it has paid since early 2025.
Why It Matters
The government has already imposed a replacement 10-percent global tariff following the Supreme Court ruling, which has been met with cautious optimism by the U.S.'s business community but heavily criticized by President Donald Trump and his administration. As well as new and existing legal cases over the IEEPA tariffs, experts say this new, temporary duty could itself invite challenges and leave the administration searching for alternative authorities to carry out its trade agenda.
What To Know
Analysis suggests that revenues from tariffs imposed through the IEEPA could amount to upwards of $100 billion. The Wall Street Journal puts the figure at $133.5 billion as of mid-December, while the Penn Wharton Budget Model—an independent research body at the University of Pennsylvania—estimates that the government could be forced to issue up to $175 billion in refunds following the Supreme Court ruling.
While the court did not directly address the issue of tariff repayments on Friday, Justice Brett Kavanaugh wrote in his dissenting opinion that the U.S. "may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others."
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On Tuesday, FedEx told Newsweek that its lawsuit was a "procedural step to protect our customers, shareholders, and the company," and one that hundreds of other businesses had already commenced even prior to Friday's news. FedEx did not specify how much it was seeking from CBP, but the company wrote in Monday's filing that it would be seeking the unspecified amount with interest and alongside attorneys' fees.
By late last year, over 1,800 American companies had already sued to recover the duties they had paid, Reuters reported, and experts say FedEx's move could mark the beginning of a surge in additional filings.
On Friday, the National Retail Federation called for "a seamless process to refund the tariffs to U.S. importers," while the U.S. Chamber of Commerce said, "Swift refunds of the impermissible tariffs will be meaningful for the more than 200,000 small business importers in this country and will help support stronger economic growth this year."
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On Sunday, U.S. Trade Representative Jamieson Greer said the administration would await guidance from lower courts on whether, when and how to begin issuing tariff refunds, adding that the U.S. Court of International Trade had in the past provided direction on such issues.
On Monday, a group of Senate Democrats introduced legislation requiring the Trump administration to refund all revenue collected from the IEEPA duties within 180 days.
"To date, the Trump Administration has collected an estimated $175 billion in illegal tariff revenue, raising taxes on products from nearly every country on earth, and jacking up prices for American families," Democratic Senator Alex Padilla of California said in a news release. "The Tariff Refund Act of 2026 would require the full refund, with interest, of those funds."
Regardless of the outcome, Fetzer said, consumers are unlikely to see any compensation if the companies suing the government are successful, despite having footed much of the bill for Trump's tariffs as companies passed on the added costs.
"In fact, they will still face the ultimate bill of these tariffs," he said, warning that Americans could face "higher tax bills or higher interest rates as the U.S. government will have to finance the lost revenues tapping into capital markets."
"This will make the already bad debt situation even worse," he added. "Borrowers, mortgage holders and tax payers will feel the pain all the same."
Ryan Young, a senior economist with the Competitive Enterprise Institute, said that larger businesses may have an easier time navigating the lengthy litigation process that is now underway.
"Bigger companies already lawyered up months ago," he told Newsweek. "Smaller businesses without deep pockets might be left out."
What People Are Saying
Thiemo Fetzer, a professor of economics at the University of Warwick, told Newsweek: "The biggest indirect burden for U.S. consumers and firms is likely the foregone tariff revenue, which now creates a fiscal shadow as the illegally collected tariff revenues may be reclaimed, worsening the U.S. fiscal position going forward and indirectly driving up taxes and interest rates for U.S. consumers. And of course, there is the fact that this activity further undermines the U.S. credibility, which may lead to further weakening of the U.S. dollar, which is also inflationary."
California Governor Gavin Newsom wrote on X: "Time to pay the piper, Donald. These tariffs were nothing more than an illegal cash grab that drove up prices and hurt working families, so you could wreck longstanding alliances and extort them. Every dollar unlawfully taken must be refunded immediately—with interest. Cough up!"
FedEx told Newsweek in a statement: "Supporting our customers as they navigate regulatory changes remains our priority. FedEx has taken necessary action to protect the company's rights as an importer of record to seek duty refunds from U.S. Customs and Border Protection following the U.S. Supreme Court's ruling that the tariffs issued under the International Emergency Economic Powers Act (IEEPA) are unlawful."
What Happens Next
During oral arguments in the Supreme Court case in November, justices and plaintiffs acknowledged the complexities of issuing refunds in the event the tariffs were struck down, with Justice Amy Coney Barrett remarking that the reimbursement process would likely be "a complete mess."
Young told Newsweek that the process would prove "an administrative nightmare."
"Tariff rates typically change two or three times a year. In 2025, it changed at least 37 times," he said. "The difficulty of tracing paper trails combined with staffing shortages at U.S. customs will make refunds very difficult to sort out."
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