Hiltzik: Expecting your tariff refund? Don’t count on it!

Tariff Refunds Unlikely for Americans, Says Treasury Secretary

Treasury Secretary Scott Bessent, left, addresses the Economic Club of Dallas, clarifying why Americans should not expect refunds for tariffs recently struck down by the Supreme Court. (C-SPAN)

Bessent’s Candid Remarks on Tariff Refunds

Scott Bessent, the Treasury Secretary known for his forthright defense of President Trump’s economic strategies, spoke openly on Friday following the Supreme Court’s decision to overturn most of Trump’s tariffs. During a public event, Bessent was asked if Americans would receive refunds for the tariffs deemed unlawful since their implementation in April. With a dismissive tone, he responded, “I get a feeling the American people won’t see it.”

Legal Standing and Unanswered Questions

Legally, those who paid the tariffs appear to have a right to reimbursement. Chief Justice John Roberts, in his 6-3 majority opinion invalidating tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA), made it clear these levies were unconstitutional from the outset. However, Roberts did not clarify whether refunds should be issued, nor did he outline how such payments would be calculated or distributed.

The refund process is likely to be a ‘mess.’

Uncertainty Over Billions Collected

Despite the government collecting an estimated $135 to $170 billion in tariffs, there is no clear directive to return these funds. Trump had previously floated the idea of issuing $2,000 “dividend” checks to taxpayers as a form of tariff refund, but Bessent’s remarks have effectively dismissed that possibility.

Currently, few are seriously advocating for direct payments to taxpayers, with the exception of Illinois Governor JB Pritzker, who called for $8.7 billion in refunds for Illinois residents—a move widely seen as political posturing.

Supreme Court Leaves Refund Process Undefined

The lack of a defined refund process in the Supreme Court’s decision has created a void. Bessent explained that, for most Americans, the prospect of receiving refunds is unrealistic. He also noted that Trump could reintroduce similar tariffs under different legal authorities and has already announced a new 15% tariff on all imports.

Additionally, Bessent indicated that while the Supreme Court deferred refund decisions to the Court of International Trade, the government plans to contest importers’ refund claims, likely resulting in prolonged legal battles.

Ongoing Economic Uncertainty

Bessent’s comments suggest that, rather than resolving the confusion caused by Trump’s shifting tariff policies, the Supreme Court’s ruling has prompted even more unpredictability in U.S. trade and business planning.

Stock markets reflected this uncertainty: after a brief rally following the Supreme Court’s announcement, markets fell sharply as Trump reaffirmed his commitment to tariffs. The Dow Jones dropped by nearly 822 points, with the Nasdaq and S&P 500 also declining by over 1%.

Why Consumers Won’t See Refunds

Bessent did not address the primary reason why American consumers are unlikely to benefit from tariff refunds.

Further Reading:

Tariffs as a Tax on Americans

Economists overwhelmingly agree that tariffs on imports function as a tax on U.S. consumers. According to the Kiel Institute for the World Economy, 96% of the 2025 Trump tariffs were paid by American importers and their customers. The Federal Reserve Bank of New York similarly found that nearly 90% of the tariff costs were borne domestically.

Importers and retailers track their tariff payments, but consumers rarely see these costs itemized. For example, one consumer received a $12 tariff charge on a purchase from a Japanese retailer, but for most, the amounts are hidden in overall prices, making individual refunds impractical.

Businesses File for Refunds, Consumers Left Out

Roughly 1,500 companies have filed refund claims with the Court of International Trade, often to secure their place in line rather than claim a specific amount. Major retailers like Costco have filed claims but haven’t specified the sums involved, as they were still required to pay tariffs until the Supreme Court’s final decision.

U.S. Customs and Border Protection has announced it will stop collecting the invalidated tariffs as of 12:01 a.m. Tuesday.

Who Really Paid the Tariffs?

It’s unclear how much of the tariffs were absorbed by businesses versus passed on to consumers. Some retailers may have maintained stable prices by absorbing the costs, while others may have increased prices in anticipation of tariffs.

There’s no indication that retailers plan to proactively refund customers who paid higher prices due to tariffs. However, some may use the end of tariffs as a promotional opportunity, such as offering discounts during “tariff freedom” sales events.

Further Reading:

Retailers’ Pricing Strategies and Tariffs

Retailers may have attributed unrelated price hikes to tariffs. For instance, after Trump imposed tariffs on washing machines in 2018, prices for both washers and dryers rose by about 12%, even though only washers were subject to tariffs. Researchers believe retailers spread the cost increase across both products or used the situation to boost profits, making consumer refunds unlikely.

Broader Economic Impact

The Trump tariffs have effectively raised taxes on American households by about $1,000, according to the Tax Foundation. Of this, $600 was due to the now-invalidated IEEPA tariffs. However, Trump’s new tariffs could increase the burden by another $300 to $700 per family, potentially exceeding the previous total impact.

Overall, Trump’s tariffs pushed the average U.S. tariff rate to 13.8%. The Supreme Court’s decision reduced this to around 6%, still the highest since 1971. The newly announced 15% tariff would raise the rate to 12.1%, though it can only remain in effect for five months unless extended by Congress. For comparison, the U.S. tariff rate was just 1.5% in 2022.

Further Reading:

Administering Refund Claims: A Daunting Task

The immediate challenge for businesses is navigating the refund process. Justice Brett Kavanaugh warned that handling these claims could become chaotic, as the Court of International Trade may need to review each of the 1,500 claims individually. However, precedent exists: after the Supreme Court struck down the Harbor Maintenance Tax in 1998, a standardized refund process was established, though it still took seven years to resolve all claims—on a much smaller scale than today’s $130 billion issue.

Questioning the Purpose of Tariffs

The rationale behind Trump’s tariff policies remains unclear. The tariffs have not revived U.S. manufacturing jobs, which have continued to decline, nor have they eliminated the longstanding U.S. trade deficit. In fact, while the overall trade deficit shrank slightly last year, the goods deficit grew to a record $1.24 trillion.

Further Reading:

Tariffs as a Tool for Political Pressure

Trump has used tariffs as leverage in international disputes, targeting countries like Brazil, Switzerland, and several European nations for various political reasons. These actions have not yielded the intended results, and U.S. trading partners recognize that the new tariffs are temporary unless extended by a hesitant Congress. As a result, they are not taking Trump’s threats seriously.

Despite his aggressive stance, Trump’s influence appears to be waning, though his unpredictable decisions continue to have significant economic consequences, as reflected in recent market volatility.

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This article was originally published in the Los Angeles Times.