Exclusive: Supreme Court tariff ruling makes over $175 billion in US revenue subject to refunds, Penn-Wharton estimates

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Shipping containers are seen at the port of Oakland, as trade tensions continued over U.S. tariffs with China, in Oakland, California, U.S., May 12, 2025. REUTERS/Carlos Barria 
WASHINGTON, Feb 20 (Reuters) – More than $175 billion in U.S. tariff collections are subject to potential refunds after the U.S. Supreme Court on Friday struck down President Donald Trump‘s broad emergency tariffs, Penn-Wharton Budget Model economists said.

Their estimate, produced at Reuters’ request, was derived from a ground-up forecasting model that uses tariff rates by product and country for specific duties imposed by Trump, including those under the International Emergency Economic Powers Act (IEEPA), said Lysle Boller, senior economist for Penn-Wharton Budget Model (PWBM), a non-partisan fiscal research group at the University of Pennsylvania.

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The Supreme Court handed Trump a stinging 6-3 defeat by ruling he overstepped his authority by using IEEPA, a sanctions law, to impose tariffs on imported goods. The justices sent the case back to the Court of International Trade to sort out next steps, a process expected to set off a scramble by companies to demand refunds.

“The Supreme Court did not talk explicitly about the $175 billion in tariffs that could potentially be refunded. On the other hand, their ruling today clearly does open that door for those refunds to be demanded,” PWBM director Kent Smetters told Reuters.

Most companies will likely seek refunds, “and it’s basically just going to come out from the U.S. Treasury,” he added.

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Shows IEEPA tariffs revenue

Trump has touted the revenue generated by all of his tariffs, which were estimated by the Congressional Budget Office at about $300 billion annually over the next decade.

Refunds of $175 billion would exceed the combined fiscal 2025 spending by the Department of Transportation and the Department of Justice.

ALTERNATIVE CALCULATIONS

Boller said the PWBM model, built for long-term revenue forecasts, cross-references U.S. Census Bureau import data on around 11,000 product import categories based on eight-digit tariff codes across 233 countries, and applies statistical forecasting methods to come up with about $500 million in IEEPA-based revenue collected daily. As of Thursday, that model estimated $179 billion in total receipts under IEEPA since Trump began imposing tariffs under that law in February 2025.

PWBM also extrapolated past CBP IEEPA customs duty assessment data as a share of continuing U.S. Treasury customs receipts and came up with a similar estimate of $175 billion to $176 billion, he added.
CBP last published its customs assessments under IEEPA-based tariffs and other trade remedy duties on December 14, at that time showing an at-risk total of $133.5 billion since the first duties under the law were imposed. Net duty collections are typically slightly lower because the tariff assessments are subject to adjustments and corrections that result in refunds.
Shows IEEPA share of tariff revenues

The PWBM model also made quick adjustments for sometimes-abrupt tariff changes by Trump, including from trade deals that cut import duty rates for goods from certain countries. South Korea, for example, saw its U.S. tariff rate drop to 15% from 25% in November.

It also has captured changes in punitive duties under IEEPA, such as the imposition last August of a 40% tariff to punish Brazil over the prosecution of Trump ally and former President Jair Bolsonaro, and the removal of duties on Brazilian coffee, beef and cocoa in November.

U.S. Treasury Secretary Scott Bessent told Reuters in January that the Treasury can easily cover any tariff refunds. Treasury’s borrowing plans, made ahead of the Supreme Court’s ruling, call for maintaining large cash balances: $850 billion at the end of March and $900 billion at the end of June.
Trump moved swiftly on Friday to replace the IEEPA tariffs with a temporary 10% global import duty for 150 days while opening trade investigations under other, more established trade laws to keep up tariff pressure on U.S. trading partners.

Bessent said on Friday that these measures would allow the Treasury to maintain “virtually unchanged” tariff revenue in 2026.

The Treasury has been reporting large gains in customs receipts in recent months, up roughly $20 billion a month from prior-year periods before Trump imposed the duties, with about $27.7 billion in total customs receipts in January.

Reporting by David Lawder; Editing by Stephen Coates, Rod Nickel and Diane Craft

Our Standards: The Thomson Reuters Trust Principles.

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