Every controller knows the sentence that ends careers: “We booked that as revenue.” For a year, Washington booked tariff collections as revenue. Then the Supreme Court ruled 6-3 in Learning Resources v. Trump that the emergency law behind tariffs never authorized them. Now the money is going back out the door.
The scale is hard to overstate. Customs and Border Protection says it assessed about $166 billion in these duties between February 2025 and February 2026, paid by more than 330,000 importers. As of Sept. 11, 2026, it had accepted $134.7 billion in refund claims and sent roughly $122 billion, interest included, to the Treasury for payment. In May alone, Treasury refunded nearly $22 billion, about what it collected in tariffs that month. The refunds erased the revenue. A stream of money the administration counted on netted to roughly zero for the month, and almost nobody noticed because gross collections get the press release while net receipts get a footnote.
That interest deserves attention, and the administration conceded in court that it owes it. Washington spent $166 billion as ordinary receipts and is repaying it with interest, an unplanned loan from importers on terms no one negotiated. Private companies call that an unrecorded liability, and auditors write it up. The Congressional Budget Office’s estimate that ending these tariffs adds $1.6 trillion to primary deficits over a decade, plus $400 billion in interest, explicitly leaves refunds out.
Now ask who is being repaid. Treasury Secretary Scott Bessent told Congress the money goes to the companies that imported the goods, and customs law lets only the importer of record recover it. Households, which the Yale Budget Lab estimated paid $1,100 to $1,700 a year in higher costs, receive nothing from the government. Retailers that raised prices may be paid twice, once at the register and once by the Treasury. Dozens of consumer class actions now target companies including Costco, FedEx, and IKEA. FedEx has promised to pass refunds to those who paid its surcharges. Costco’s chief executive has said that refunds would go toward lower prices generally, which plaintiffs say is not the same as making buyers whole.
Even importers are not all made whole. The administration appealed a court order to repay everyone, arguing that older, finally settled entries require a lawsuit or protest. Trade press reports that CBP opens its last refund phase on Tuesday, for those older entries, and only for importers who sued. Of 27.2 million entries claimed so far, 6.1 million failed CBP’s checks, most often because they fell outside a 90-day window to reopen. A small business without a trade lawyer may find that its refund is a matter of timing.
Congress was never asked to approve this tax, and it is not being asked about its repayment. That is the point. Emergency power produced $166 billion in receipts without a vote, and the bill for being wrong arrives the same way. Meanwhile, the president and vice president point to tariff revenue to fund a $5,000 dividend for every adult. It is hard to promise the same dollars twice when a court has ordered them returned. Every dollar of that dividend would need to come from somewhere, and the one source named so far is a revenue stream the courts have already told Washington to repay.
In my work reviewing public budgets and government contracts, I see the same pattern again and again: A number is celebrated when it comes in and quietly revised when it goes out. Voters deserve the net figure, not the gross one. They deserve it before the next fiscal deadline, not after it.
TRUMP WANTS MORE AMERICAN JOBS. MEDTECH TARIFFS THREATEN THE 3 MILLION WE ALREADY HAVE
Three reforms are feasible under the law. First, publish a monthly tariff ledger showing duties collected, refunds paid, interest owed, and claims outstanding, so taxpayers see net revenue instead of gross. Second, require CBO to score refund exposure for any tariff imposed under contested authority, and keep that revenue out of deficit math and dividend promises until the legal questions are settled. Third, if Congress wants tariffs, it should vote for them. A duty written into statute rests on Article I and stands on firmer ground.
I have spent more than two decades as a financial controller, and the rule I learned early is simple: Revenue you may have to give back is reserved, not spent. Washington spent $166 billion that it had no clear right to collect, and taxpayers are now paying interest on the mistake. The question is whether Congress will vote on the next tariff before the next refund.
Jose Navarro, MBA, is a financial controller and founder of the Navarro Report, a public finance and government accountability publication based in San Diego. He has more than two decades of experience in public finance, nonprofit management, and government contract compliance.