On 20/2, the US Supreme Court ruled to reject the Donald Trump administration's authority to invoke the International Emergency Economic Powers Act (IEEPA) for imposing import tariffs. In 4/2025, Trump cited IEEPA to apply reciprocal tariffs on most trading partners, aiming to reduce deficits. Previously, he also used IEEPA to impose separate tariffs on China, Canada, and Mexico to prevent drug trafficking into the US.

With these tariff policies now overturned, importing companies are expected to rush to claim refunds from US Customs and Border Protection for taxes paid over the past year. On 20/2, economists at the Penn-Wharton Budget Model (PWBM) research firm estimated that the US government could be liable to refund over USD 175 billion in import taxes if an unfavorable ruling is received.

US president Donald Trump in Kuala Lumpur, Malaysia 10/2025. Photo: AP.

Lysle Boller, an analyst at PWBM, stated that their model is built to forecast long-term revenue, based on US Census Bureau import data covering approximately 11,000 product groups. The model estimates that the US collects about USD 500 million daily from IEEPA-based tariffs. Trump began imposing tariffs under this act in 2/2025.

The PWBM model also adjusts for sudden changes in tariffs. For example, South Korea saw its import tariffs into the US drop from 25% to 15% in 11/2025, following a trade agreement. Conversely, tariffs on Brazil increased from 10% to 40% last year, then later decreased to 10% for certain goods.

Trump had repeatedly praised the revenue generated from his overall import tariff policies. The Congressional Budget Office estimates this figure to be around USD 300 billion annually over the next 10 years.

The USD 175 billion refund would exceed the total budget expenditures for fiscal year 2025 of the US Department of Transportation (USD 127,6 billion) and the US Department of Justice (USD 44,9 billion).

However, in a january interview with Reuters, US Treasury Secretary Scott Bessent indicated that the department could easily afford any tax refunds. They plan to maintain a large cash balance, at USD 850 billion by the end of march and USD 900 billion by the end of june.

In recent months, the US Treasury Department recorded a significant increase in customs duty collection. Total collections in january reached approximately USD 27,7 billion. Trump administration officials also stated they would turn to other legal grounds to reimpose import tariffs if the court rules the invocation of IEEPA illegal.

Ha Thu (via Reuters)