Supreme Court tariff ruling "opens the door" to refunds for over $175 billion, Penn-Wharton estimates

Record ID: 2343289

  • Title: Supreme Court tariff ruling "opens the door" to refunds for over $175 billion, Penn-Wharton estimates
  • Date: 20th February 2026
  • Summary: PHILADELPHIA, PENNSYLVANIA, UNITED STATES (FEBRUARY 20, 2026) (REUTERS)  (SOUNDBITE) (English) KENT SMETTERS, PENN-WHARTON BUDGET MODEL (PWBM) DIRECTOR, SAYING:  “So here would be the kind of the worst case scenario: is that we lose the revenue b ut the financial markets never really believe that the tariffs are necessarily going away. They're always anticipating it could
  • Embargoed:
  • Keywords: Supreme Court Trump economic policy tariffs
  • Location: VARIOUS, UNITED STATES
  • City: VARIOUS, UNITED STATES
  • Country: US
  • Topics: Economic Events,North America
  • Reuters ID: LVA008724420022026RP1
  • Aspect Ratio: 16:9
  • Story Text: More than $175 billion in U.S. tariff collections are subject to potential refunds after the U.S. Supreme Court on Friday (February 20) struck down President Donald Trump's broad emergency tariffs, Penn-Wharton Budget Model economists said.
    Their estimate, produced at Reuters' request, was derived from a ground-up forecasting model that uses tariff rates by product and country for specific duties imposed by Trump, including those under the International Emergency Economic Powers Act (IEEPA), said Lysle Boller, senior economist for Penn-Wharton Budget Model (PWBM), a non-partisan fiscal research group at the University of Pennsylvania.
    The Supreme Court handed Trump a stinging 6-3 defeat by ruling he overstepped his authority by using IEEPA, a sanctions law, to impose tariffs on imported goods. The justices sent the case back to the Court of International Trade to sort out next steps, a process expected to set off a scramble by companies to demand refunds.
    "The Supreme Court did not talk explicitly about the $175 billion in tariffs that could potentially be refunded. On the other hand, their ruling today clearly does open that door for those refunds to be demanded," PWBM director Kent Smetters told Reuters.Most companies will likely seek refunds, "and it's basically just going to come out from the U.S. Treasury," he added.
    Trump has touted the revenue generated by all of his tariffs, which were estimated by the Congressional Budget Office at about $300 billion annually over the next decade.
    Refunds of $175 billion would exceed the combined fiscal 2025 spending by the Department of Transportation and the Department of Justice.
    U.S. Treasury Secretary Scott Bessent told Reuters in January that the Treasury can easily cover any tariff refunds. Treasury's borrowing plans, made ahead of the Supreme Court's ruling, call for maintaining large cash balances: $850 billion at the end of March and $900 billion at the end of June.
    The Treasury has been reporting large gains in customs receipts in recent months, up roughly $20 billion a month from prior-year periods before Trump imposed the duties, with about $27.7 billion in total customs receipts in January. Trump administration officials have said they would switch to alternative tariff authorities to restore the duties in the event of a Supreme Court loss.
    (Production: Greg Savoy, Arlene Eiras) 
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