Supreme Court Decision Could Force $175 Billion in Tariff Refunds

A University of Pennsylvania analysis reveals that over $175 billion in tariff revenue collected under Trump's emergency trade powers could be refunded if the Supreme Court rules against the administration. The potential refund amount would exceed the annual budgets of multiple federal agencies combined.

WASHINGTON – Federal officials face the possibility of refunding more than $175 billion in collected tariff revenue if the Supreme Court strikes down President Trump’s emergency trade duties, according to new calculations from University of Pennsylvania researchers released Friday.

The analysis, conducted by the Penn-Wharton Budget Model at Reuters’ request, examined tariff collections made under the International Emergency Economic Powers Act (IEEPA) since Trump began implementing these measures in February 2025.

Senior economist Lysle Boller from the non-partisan fiscal research organization explained that their comprehensive forecasting system analyzes tariff rates across approximately 11,000 product categories from 233 nations. The model estimates roughly $500 million in IEEPA-related revenue is collected each day.

A Supreme Court decision on these emergency tariff powers could come as soon as Friday. Should the justices rule against the administration, importers are expected to quickly seek refunds from U.S. Customs and Border Protection for duties paid throughout the past year.

To put the potential refund amount in perspective, $175 billion surpasses the combined annual spending of the Transportation Department ($127.6 billion) and Justice Department ($44.9 billion) for fiscal 2025.

The administration has highlighted revenue from all tariff programs, with Congressional Budget Office projections showing approximately $300 billion annually over the coming decade. However, this analysis demonstrates that a significant portion could require repayment depending on the court’s ruling.

Boller detailed how the Penn-Wharton system cross-references Census Bureau import information using eight-digit tariff classifications and applies statistical forecasting techniques. As of Thursday, their model calculated $179 billion in total IEEPA collections since the emergency tariffs began.

The research team also examined historical Customs and Border Protection assessment data as a percentage of ongoing Treasury customs collections, producing a comparable estimate between $175 billion and $176 billion.

CBP’s most recent public disclosure of IEEPA-based customs assessments came December 14, showing $133.5 billion at risk since the law’s first implementation. Actual collections typically run slightly below assessments due to adjustments and corrections that generate refunds.

The Penn-Wharton analysis accounts for rapid tariff modifications implemented by the Trump administration, including trade agreements that reduced import duties for specific nations. South Korea, for instance, saw its U.S. tariff rate decrease from 25% to 15% in November.

The model also tracks punitive duty changes under IEEPA, such as the 40% tariff imposed on Brazil last August following the prosecution of Trump associate and former President Jair Bolsonaro, and the subsequent removal of duties on Brazilian coffee, beef and cocoa in November.

Treasury Secretary Scott Bessent expressed confidence to Reuters in January that his department can handle any required tariff refunds, while maintaining optimism that the Supreme Court will support the IEEPA tariffs. Treasury borrowing plans anticipate substantial cash reserves of $850 billion by March’s end and $900 billion by June’s conclusion.

Recent Treasury reports show significant increases in customs revenue, with monthly gains of approximately $20 billion compared to pre-tariff periods. January’s total customs receipts reached $27.7 billion. Administration officials indicate they would pursue alternative tariff authorities to reinstate duties if the court invalidates IEEPA-based tariffs.