ORLANDO, Fla. – “Tariffs are President Trump’s favorite word. That’s not an exaggeration.”
Not my words – words the president himself has used on more than one occasion.
Let’s start with the basics: tariffs are taxes any government puts on goods coming into their country from abroad. The philosophy: you might be able to make a product for less money overseas or across the borders, but if that’s the case, it’s going to cost you extra to bring that product into our country. In short, tariffs are a political mechanism used to protect domestic industries from cheaper foreign competition.
What to Know
- The U.S. Supreme Court ruled the April 2025 set of Trump tariffs unconstitutional
- Companies that paid the tariffs can apply for refunds
- Consumer refunds, however, aren’t as straightforward and may be difficult, if not impossible, to recoup
The U.S. has had tariffs for hundreds of years (dating back to the Tariff Act of 1789). Back then, tariffs were a primary source of revenue for our young democracy. Today, in Donald Trump’s second term, the president leaned heavily on a new tariff policy that, in his words, would “make us rich as hell.” The Supreme Court has told the president to figure out another way.
On Feb. 20, in a 6-3 decision, the court ruled the Trump administration had overstepped its authority by using a 1977 emergency law – the International Emergency Economic Powers Act, or IEEPA – to impose sweeping tariffs on imports. The ruling wasn’t just a legal blow – it triggered a scramble inside the administration to keep the tariff policy alive. The financial impact came soon after: on March 4, 2026, Judge Richard Eaton of the U.S. Court of International Trade (CIT), ordered the government to refund over $166 billion in IEEPA tariffs collected over the previous 10 months.
Diving deeper into the numbers, it was estimated that more than 56,000 importers are eligible for refunds on over 50 million shipments. More than 3,000 companies have filed suit against the government to secure those refunds; some suits were filed before the ruling was handed down. Companies are being told to expect a wait time of two to three months before refunds hit their bank accounts.
[WATCH: Matt Austin talks tariffs with Colin Grabow of Cato Institute]
How’s this going to work?
At the core of the issue: companies will get the lion’s share of the refunds, not consumers. The SCOTUS ruling that triggered a massive refund effort put the U.S. Customs and Border Protection in a precarious position. They were the ones who initially were tasked to collect the tariffs – now they had to figure out how to give that money back.
The system used to collect tariffs is known as ACE – the Automated Commercial Environment Secure Data Portal, run by U.S. Customs and Border Patrol. To handle refunds, CBP had to develop CAPE – Consolidated Administration and Processing of Entries. CAPE is embedded inside of ACE.
But here is where things fall apart – companies originally registered and paid those tariffs, but if those companies then passed some of that cost on to customers (retailers, wholesalers, consumers) do they have exact numbers to refund the right people?
The short answer is probably not.
As an example, take the complicated world of building a car in Trump’s world of tariffs. The government may assess one big tariff on a car built outside of the country, or many tariffs on smaller parts used to assemble the car. The problem: by the time the company pays all those tariffs, assembles the car, ships it to a distribution center, sends it to a dealer, and the dealer then sells it to a customer, who actually gets the tariff refund? The manufacturer, the dealer, or the customer?
There are, however, examples where there is a clear-cut process for those who paid and can get a refund. FedEx has stated that its customers will get refunds if they were hit with tariffs on goods shipped by the carrier. Why? FedEx knows exactly how much the tariff was and can reverse that charge.
In a statement, FedEx said: “…if refunds are issued to FedEx, we will issue refunds for IEEPA tariffs paid to the shippers and consumers who originally bore those charges.”
Costco says it plans to pass savings on through lower prices rather than direct refunds.
Bottom line: if you’re a company that paid tariffs directly to the government, an importer of record in customs filings, or a business that has documented what you paid in tariffs, you have a strong chance at recouping those funds. If you’re a consumer who paid higher prices, you’re probably out of luck.
[WATCH: Dollars & Sense: Airlines, passengers feel the pinch from the war in the Middle East]
The struggle is real
Putting it into words of how the refund system is supposed to work is easy – watching it work (so far) – not so much.
On the first day of operation (April 20, 2026), the CAPE refund portal struggled to keep up with requests. Businesses across the country reported slow load times, frozen screens, and error messages telling them to try again later. For a system tasked with processing billions in refunds, the rollout looked more like a bottleneck than a breakthrough.
Part of the problem is sheer volume. Hundreds of thousands of importers – from small businesses to multinational corporations – are all trying to access the system at once, many racing to file claims as quickly as possible. That surge has overwhelmed the platform that, until now, was designed to take in money, not distribute it.
And even when companies can get through, the process isn’t exactly plug-and-play.
Filing a claim requires detailed documentation: import records, tariff payments, shipment data – often going back months. Any mismatch or missing information can trigger delays, rejections, or requests for additional review. For smaller businesses without dedicated compliance teams, that can turn a refund into a paperwork marathon.
Then there’s the legal layer.
Some claims are already being flagged because they’re tied to ongoing lawsuits or broader trade disputes. Others may fall into gray areas – tariffs applied under slightly different authorities, or shipments that don’t clearly qualify under the ruling – forcing additional scrutiny before any money is released.
All of this adds up to a frustrating reality: the money may be owed, but getting it back is anything but straightforward.
[WATCH: Dollars & Sense: Rethinking America’s poverty line]
We are so not done
Ever heard of Section 122 of the Trade Act of 1974? Yeah – didn’t think so. Meet your new tariff.
President Trump struck out with the IEEPA, but he had a backup plan. Under Section 122 of the Trade Act of 1974, he is using his authority to impose new tariffs of 10% to replace his Liberation Day tariffs. Those tariffs – by law – are only temporary: the 150-day clock started ticking on Feb. 24, set to expire toward the end of July. And when the 150 days are up, reports indicate the administration may try to reinstate tariffs using Section 301 of the same Trade Act of 1974.
Will it stick? Stay tuned.
The tariff house of cards may have collapsed, but the fallout is still being sorted out in real time. Billions of dollars are now moving in reverse – from the federal government back to businesses – but not necessarily back to the people who ultimately paid higher prices.
Which raises a fundamental question no court ruling has answered: if tariffs acted like a tax on Americans, who should get the refund when that tax is ruled illegal?