| Illegally collected “IEEPA”* tariffs: | ~$175 billion |
| Annual IRS income tax withholding refunds: | ~$330 billion |
* “IEEPA” is an acronym for “International Emergency Economic Powers Act,” the 1977 law the administration used as the basis for eight tariff decrees in 2025. The other tariff decrees, “national security” claims under “Section 232” of U.S. trade law, haven’t been challenged so far and remain in force. The $175 billion is the estimated actual tariff collection under the IEEPA decrees, and does not include required interest payments.
Brett Kavanaugh, one of three Supreme Court Justices to side with the Trump administration on “international emergency” tariffs two weeks ago, explains his view at least in part by saying he thinks repaying tariffs will be difficult:
“The United States 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. As was acknowledged at oral argument, the refund process is likely to be a ‘mess.’ In addition, according to the Government, the IEEPA tariffs have helped facilitate trade deals worth trillions of dollars — including with foreign nations from China to the United Kingdom to Japan, and more. The Court’s decision could generate uncertainty regarding those trade arrangements.”
A general legal point on this, then a couple of comments on the practical issues:
Legal: If an administration puts an illegal policy in motion, and courts later find it illegal, unwinding it can be messy. That’s the nature of Justice Marshall’s “judicial review” concept. Any “mess” is the administration’s responsibility and its problem to fix, not the courts’.
Practical: Neither of Kavanaugh’s complaints is very daunting. The “deals” have basic problems — all of them raise costs for Americans — and don’t seem built to last anyway. And refunding the “IEEPA” tariffs needn’t be messy at all.
With respect to “deals” and “trade arrangements”, they aren’t worth “trillions” of dollars and don’t look like they’re meant to last long. As recently as January, for example, the administration itself was perfectly willing to abandon its “deals” with the European Union and the U.K. by threatening new tariffs over control of Greenland. And if it now places high value on them, it can eliminate any risk by asking Congress to pass implementing laws that bring them to life. Earlier administrations did this 18 times between 1974 and 2020 for GATT, WTO, and FTA agreements. If Congressional support is there, the deals will be fine. If not, maybe they aren’t very meaningful.
And with respect to refunding illegally collected tariff money, no “mess” unless the administration wants one.
There’s no blurriness about who is owed the money. In customs and tariff jargon, the people who write tariff checks to the Customs and Border Patrol are the ‘importers of record’, meaning about 242,000 importing companies in the U.S., 11,000 customs brokers handling trade paperwork for small businesses, and individuals now paying tariffs on arriving packages. CBP’s “ACE” (Automated Commercial Environment) system lets the firms and customs brokers enter their payments in digital form with an 8-digit tariff code identifying the product they’re buying, the date it arrived, its value, the applicable tariff laws and rates, and the amount of money they paid. Each of the administration’s eight “IEEPA” decrees created special tariff lines beginning with the HTS code 9903 to apply the new tariffs to incoming goods. As an example, the April 2 “global” decree created 52 new tariff lines, starting at “9903.01.25” and going up to “9903.01.76.” So CBP knows very well who has paid IEEPA tariffs on Ghanaian shea butter, Vietnamese-assembled TV sets, Valentine roses from Ecuador and Colombia, etc., and the payers likewise know how much of their tariff payments originated in an illegal IEEPA decree.
Nor should the government have any problem writing the checks. Tariff-payers can probably arrange most of the refunds themselves, using the ACE system to revise tariff filings dating back to April of 2025. (Tariff payments typically wait around at CBP for 315 days, then “liquidate” as CBP sends them to the Treasury’s General Fund.) For the earlier ones, a bit more complicated but the U.S. government regularly does much larger and more complicated refunds. To put some numbers on this:
In sum: CBP will have to sort through a lot of forms. The Treasury Department will need to send out more checks than usual this year. But it won’t be a mess unless the administration decides to create one. And either way, that’s not the Court’s problem.
PPI’s four principles for response to tariffs and economic isolationism:
Law:
The Supreme Court’s Learning Resources, Inc. v. Trump opinion. The ruling against the IEEPA tariffs is pp. 7-26, and Kavanaugh’s dissent starts on page 170.
… and Marshall’s Marbury v. Madison opinion (1803), introducing the “judicial review” concept.
The numbers:
CBP’s “Trade statistics” snapshot. See “entries” in the top box for the count of import arrivals, and scroll down for tariff collection under IEEPA, “232” national security claims, and “301” unfair trade practices.
CBP’s introduction to the Automated Commercial Environment system, which importers use to file documents and pay tariffs electronically, and facilitates refunds of wrongly collected tariff money.
And for comparison, the IRS’s summary of individual tax filings and refunds.
And another thing:
The administration spent a lot of time last year claiming that tariffs were a way to offload taxes onto foreigners, including foreign governments. Mr. Trump made the same assertion — “tariffs, paid for by foreign countries” — personally in the “State of the Union” address a week ago Tuesday. As the refund checks go out, Congress and reporters might usefully ask how many are going to foreign capitals and how many to American addresses.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
