Nearly a year after President Donald Trump unilaterally imposed the steepest tariffs on American consumers in a century with his “Liberation Day” invocation of the International Emergency Economic Powers Act, the Supreme Court held that IEEPA does not authorize the president to impose tariffs and remanded for further proceedings. In a 6-3 ruling, the majority opinion, authored by Chief Justice John Roberts, decided that because “IEEPA contains no reference to tariffs or duties,” not even a national emergency justification gives the president the power to impose a tariff under the statute.
But although SCOTUS has barred Trump from enforcing his IEEPA tariffs in the future, it doesn’t mandate that the U.S. Treasury reimburse the total amount of revenue collected under the IEEPA tariffs. Economists at the Penn-Wharton Budget Model estimate that the total amount of IEEPA revenue collected since the start of Trump’s second term is $175 billion.
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While we don’t know exactly what share of the $90 billion increase of tariff revenue collected in the first third of the 2026 fiscal year has been done under IEEPA authority, we can conservatively estimate that IEEPA tariffs contributed around half of that new revenue. A $90 billion increase in tariff revenue relative to the first third of the 2025 fiscal year is responsible for nearly 60% of this fiscal year’s 20% reduction of the federal budget deficit. Back-of-the-envelope math would indicate that IEEPA tariffs have been responsible for a 6% reduction in the deficit thus far this fiscal year.
The point is that if SCOTUS had mandated that the Treasury immediately and automatically refund all IEEPA tariff revenue, the federal budget deficit would be looking at a brand new, $175 billion hole added to the national debt and an overnight expansion of the deficit. It is this sort of profligacy that spooks bond markets into jacking up the borrowing costs borne by the U.S. government.
In his dissent, Associate Justice Brett Kavanaugh noted the potential for practical chaos as a result of the majority’s ruling.
“Refunds of billions of dollars would have significant consequences for the U. S. Treasury,” Kavanaugh wrote. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”
But the fact that the majority — written by the famously politically pragmatic Roberts — doesn’t mandate that the Treasury issue refunds or how they would do so, is likely the whole point.
SCOTUS was definitive in overturning Trump’s IEEPA tariff authority, but intentionally punted on remedies, remanding the case for refunds to lower courts. Importers will likely have to individually file new challenges for tariff refunds, and given the time elapsed and number of cases, the complexity may be intentional. Refunds are likely for “unliquidated entries” — that is, those imports who haven’t finalized their total Customs bills just yet — but liquidated entries are subject to unfavorable deadlines that make refunds unlikely in many cases.
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It’s impossible to say how much IEEPA tariff revenue will ultimately be refunded. Out of curiosity, I asked rival LLMs what they would expect, and although Grok said that it believes most of the ~$175 billion would be ultimately refunded, ChatGPT estimated that only one-third to one-half would be. The ultimate number depends on how lower courts and the Court of International Trade rule, but I suspect that if John Roberts wanted to make the Treasury pay, he would have.
The White House will likely unveil a new patchwork of executive authorities to backfill the IEEPA tariffs going forward. But for the more important question for the Treasury, SCOTUS may have given its answer in its refusal to answer at all.