Supreme Court Ruling Leaves $175 Billion of IEEPA Tariffs Tied Up; Treasury Secretary Warns Consumers May Never See Refunds
Last week’s supreme court decision invalidated the administration’s use of the International Emergency Economic Powers Act to impose broad global tariffs, a judgment that has immediately put roughly $175 billion in potential refunds into dispute and prompted senior Treasury officials to warn that ordinary consumers may not see rebate checks anytime soon.
Supreme Court ruling overturns IEEPA tariff authority
The Supreme Court’s ruling on Friday found that the Oval Office could not rely on the IEEPA to levy duties on trading partners, declaring that the sweeping global tariffs instituted under that authority were unlawful. That judgment triggered a flurry of weekend updates from the White House as it scrambled to find new legal footing to keep collecting import duties.
IEEPA tariffs timeline: China, Canada, Mexico and "Liberation Day"
The tariffs at issue were introduced in stages: IEEPA tariffs were initially imposed on China in February 2025, then applied to Canada and Mexico a month later, and the so-called "Liberation Day" tariffs were imposed in April under the same statutory authority. Those collections, generated over months, are now the subject of legal challenge.
Treasury Secretary Scott Bessent outlines litigation and alternatives
Treasury Secretary Scott Bessent, speaking at the Economic Club of Dallas in the aftermath of the decision, said the Supreme Court did not resolve how the funds collected under the IEEPA should be handled, and that the question will be pushed to international trade courts. He warned the process could be protracted—"dragged out for weeks, months, years"—and added, "I got a feeling the American people won’t see it. " Bessent also noted the administration can pursue alternative statutory bases for tariffs, such as Section 232 on national security or Section 301 addressing unfair trade practices, meaning tariff revenue generation could continue even as IEEPA collections remain contested.
Penn Wharton model and collections figures
Pinning a precise dollar figure to the disputed pool is complex because IEEPA revenues must be separated from existing customs duties and levies under prior and new trading agreements. The latest analysis from the Penn Wharton Budget Model projects up to $175 billion in potential refunds, and it records cumulative IEEPA collections of roughly $164. 7 billion by January 2026, with collections running at about $500 million per day—figures that help explain the urgency around how the money will be treated.
Trade team stance and the role of courts
Other members of the administration have emphasized deference to litigation. U. S. Trade Representative Jamieson Greer said the dispute over compensation or refunds is a matter for the courts and that the administration will follow judicial direction. The White House faces a legal pathway that may determine whether importers receive refunds and how quickly any repayments could be processed.
Economic impact debate and business reaction
Few households had expected a tariff rebate check, and optimists suggested any refunds to importers could act as a fiscal stimulus: U. S. importers would be the immediate recipients of cash and, in theory, might pass savings along to consumers. UBS chief economist Paul Donovan cautioned clients that rebates are more likely to enlarge the U. S. fiscal deficit and act as stimulus paid to importers rather than directly producing lower consumer prices. He argued that, with new tariffs still being pursued under other authorities, businesses are unlikely to rush to reduce prices for customers.
What makes this notable is the scale and speed of collections—roughly $500 million per day at times—which turns a legal question about statutory authority into a dispute with immediate fiscal and market consequences. The administration’s next steps, from court battles in international trade tribunals to invoking Sections 232 or 301, will determine whether the disputed funds remain sequestered or are returned to importers and potentially passed on more broadly.
