Five months after the Supreme Court struck down Donald Trump's "Liberation Day" tariffs, only $23 billion of $166 billion owed has been refunded to importers, according to a new report from the National Taxpayers Union Foundation. The delayed refund process, complicated by government appeals and litigation, is costing taxpayers an additional $700 million in interest payments every month, with more than $1.3 billion accrued in just the first two months after the court ruling.
Trump levied tariffs between April 2025 and February 2026 under the International Emergency Economic Powers Act, collecting $166 billion before the Supreme Court ruled on February 20, 2026, that IEEPA doesn't authorize the president to impose tariffs. The Court of International Trade then issued a universal injunction requiring refunds to all importers. U.S. Customs and Border Protection launched a three-phase refund program called CAPE, with Phase 1 starting April 20, 2026, and covering more than $95 billion in entries that weren't yet liquidated or had been liquidated within 80 days. Phase 2, which began June 29, covers approximately $28.7 billion in reconciliation entries. Phase 3, targeted for late July, will handle an estimated $33 billion in liquidated entries closed more than 80 days before the refund period. While $40 billion was expected to be paid out by the end of June, the Department of Justice's appeal of the refund order threatens to prevent payments to importers who didn't file independent lawsuits.
The report notes that CBP is expected to pay interest on refunds calculated from the date of deposit at a rate of 7% for noncorporate taxpayers and 6% for corporate taxpayers. The Cato Institute's analysis found that every month of delayed refunds accrues $700 million more in interest. The report states that consumers faced an average price increase of $800 per household while the tariffs were in effect, and trade decreased as a result of the IEEPA tariffs. According to the authors, if the government prevails in its appeal, non-plaintiff importers with finalized liquidated entries may be excluded from Phase 2 and 3 refunds, forcing them to file individual lawsuits.
The government's appeal creates cascading costs across the system, the report explains. Importers must wait longer for refunds. The federal government pays for litigation representation. Courts need to process additional refund suits from independent filers. And taxpayers foot the bill for mounting interest payments on delayed refunds. The report warns that this increases the administrative burden on all parties involved. The Administration's alternative to IEEPA tariffs, Section 122 tariffs, have also been ruled unlawful, though a stay prevents refunds while the DOJ appeal is pending. If plaintiffs prevail in that case, similar refund disputes could create the same administrative nightmare and interest costs. Consumer class action filings and proposed legislation aim to return tariff damages directly to consumers, but the class action route faces significant hurdles since plaintiffs must prove increased costs were directly caused by tariffs, especially difficult when sellers didn't separately identify tariff charges.
The report recommends that if the Trump Administration believes tariffs are necessary, it should seek congressional approval under Article I, Section 8 of the Constitution to avoid future legal turmoil. Congress is already proposing legislation to further limit tariff action without congressional approval. In the meantime, the authors argue, the Administration should drop its appeal of the refund order and expedite payments to individuals and businesses so taxpayers aren't stuck with ballooning interest costs. The bottom line: every day the government fights the refund order, taxpayers pay more for a policy the Supreme Court already declared unlawful.