Supreme Court Ruling Leaves $175 Billion in IEEPA Tariffs Tied Up as Treasury Warns Consumers May Never See Refunds

A supreme Court decision last Friday concluded that the administration could not rely on the International Emergency Economic Powers Act to impose sweeping global tariffs, leaving roughly $175 billion in collections locked in litigation and raising fresh questions about whether Americans will ever receive rebate payments. The ruling has already prompted a weekend of activity in the Oval Office as officials search for alternative legal authorities to keep collecting import duties.

Supreme Court ruling

The Supreme Court’s Friday ruling declared the use of the IEEPA to levy global tariffs unlawful, a finding that did not resolve how the funds already collected should be handled. That question will be taken up in international trade courts, and Treasury Secretary Scott Bessent warned the timeline for resolution could be long. "My sense is that could be dragged out for weeks, months, years, so … we’ll see what happens there, " he said, adding bluntly: "I got a feeling the American people won’t see it. "

Treasury Secretary Scott Bessent

Speaking at the Economic Club of Dallas after the ruling, Bessent described the immediate legal and fiscal posture: the court left the disposition of IEEPA collections unsettled and placed the matter squarely in the hands of trade tribunals. He noted the administration can pursue other statutory routes to impose duties—specifically Section 232, justified on national security grounds, and Section 301, tied to unfair trade practices—and said those alternatives mean tariff revenue generation need not fall off even as the IEEPA collections are contested.

IEEPA Tariffs on China, Canada and Mexico

The IEEPA-based tariffs at issue were rolled out in stages: duties were first imposed on China in February 2025, extended about a month later to Canada and Mexico, and later included the April "Liberation Day" tariffs. Collections tied to that authority accumulated through early 2026 and are now the subject of litigation aimed at possible refunds.

Penn Wharton Budget Model and UBS analysis

Economic analysis has placed a concrete scale on what is at stake. The Penn Wharton Budget Model projects up to $175 billion in potential refunds, a figure that reflects cumulative IEEPA collections of roughly $164. 7 billion by January 2026 and a collection pace of about $500 million per day. UBS chief economist Paul Donovan warned clients that any rebates would increase the U. S. fiscal deficit and act like fiscal stimulus. "Any rebates will be paid to U. S. importers (as they are the ones who made payments to the U. S. Treasury), " Donovan wrote, adding that with new tariffs incoming it is unlikely companies will rush to reduce prices for customers.

White House response and trade official statements

The Oval Office spent the weekend updating its stance and considering options to continue generating tariff revenue, but officials acknowledge the funds initially collected under the IEEPA are now in dispute. U. S. Trade Representative Jamieson Greer, speaking in a television interview, said the matter will be decided by courts: "So it’s a matter for the courts, " he said, adding, "They created the situation, and we'll follow whatever they say to do. "

Potential economic effects and what makes this notable

Optimists outside the administration have suggested that refunds could act as a short-term economic stimulus if U. S. importers receive large rebate payments, and that consumers might benefit if companies pass savings through to prices. Few households had been expecting a rebate check, and Treasury language now makes that prospect appear distant. The broader implication is that a single legal ruling has not only put $164. 7 billion–$175 billion of collections into legal limbo but also shifted the debate to which statutory tools the government will use going forward—and whether those tools will preserve tariff revenue even as contested collections remain tied up.

Legal actions in trade courts and the administration’s pivot to alternative tariff authorities will determine whether importers receive refunds and whether any such payments translate into price relief for consumers. For now, collections continue to be counted at roughly $500 million per day, and officials say the process of untangling IEEPA revenue is likely to be prolonged.