Supreme Court ruling leaves $175 billion from IEEPA tariffs tied up, Treasury warns
The supreme court’s decision last Friday that the White House could not use the International Emergency Economic Powers Act to levy duties has left roughly $175 billion in collections tied up in litigation, and Treasury Secretary Scott Bessent warned that American consumers are unlikely to see refunds.
Supreme Court finds IEEPA use unlawful
The court ruled on Friday that the Oval Office’s use of the IEEPA to introduce sweeping global tariffs was unlawful. That finding has prompted a weekend of updates from the Oval Office as officials scrambled to find new legal footing to continue collecting import duties.
Where the IEEPA tariffs were applied
The IEEPA tariffs were initially imposed on China in February 2025 and were extended a month later to Canada and Mexico. April’s “Liberation Day” tariffs were also issued under the IEEPA authority.
Treasury secretary says refunds may never reach consumers
Speaking at the Economic Club of Dallas in the aftermath of the ruling, Treasury Secretary Scott Bessent said the Supreme Court had not ruled on how the funds generated under the IEEPA should be handled, and that that decision will be pushed back to international trade courts. He warned the dispute could be long: “My sense is that could be dragged out for weeks, months, years, so … we’ll see what happens there. ” On the IEEPA revenues he added, “I got a feeling the American people won’t see it. ” Bessent also said using alternative authorities such as Section 232 or Section 301 means tariff revenue generation won’t drop or slow.
Legal next steps pushed to trade courts
The administration faces a question about what happens to the money already collected under the IEEPA. Officials have several options to continue generating tariff revenue, but the collections themselves are now in dispute and the handling of those funds is slated for international trade courts.
How much is in question and who would get refunds
Precisely how much the American people are missing out on remains up for debate because IEEPA funds must be separated from customs duties and levies already in place under previous and new trading agreements. The Penn Wharton Budget Model projects up to $175 billion in potential refunds, reflecting cumulative IEEPA collections of roughly $164. 7 billion by January 2026, with collections running at about $500 million per day.
Trade representative, economists and market reaction
U. S. Trade Representative Jamieson Greer, asked in a Sunday interview whether the White House will fight efforts to seek compensation or pay refunds, said: “So it’s a matter for the courts. They created the situation, and we’ll follow whatever they say to do. ” UBS chief economist Paul Donovan told clients this morning that hopes of businesses passing rebates back to consumers may be naive: “Tariff rebates will increase the U. S. fiscal deficit, and act as a fiscal stimulus. Any rebates will be paid to U. S. importers (as they are the ones who made payments to the U. S. Treasury). With new tariffs coming in, it seems unlikely anyone will rush to lower prices to their customers. ”
Optimists have suggested refunds could act as an economic stimulus because U. S. importers would receive the cash influx and might eventually pass savings through to consumers; consumers in turn might hope for lower prices if corporations did so. But Bessent’s comments keep the dispute over IEEPA collections focused on legal proceedings rather than immediate refunds.
The next confirmed step in the process is movement of the refund question into international trade courts and continued White House consideration of alternative tariff authorities such as Section 232 and Section 301.
