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US Treasury Refunds USD22B in Tariffs After Supreme Court Ruling
(MENAFN) The US Treasury returned nearly $22 billion in tariff revenue to importers in May, effectively wiping out customs receipts collected during the month, following a Supreme Court ruling that invalidated a cornerstone of President Donald Trump's trade policy, the Treasury Department confirmed Wednesday.
The repayments represent the first significant tranche of refunds processed after the Supreme Court determined that Trump lacked the legal authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). The administration began processing returns in April but has since appealed a court mandate requiring refunds to all importers who paid duties under IEEPA authority. The total sum in dispute stands at approximately $166 billion.
Treasury Secretary Scott Bessent told lawmakers at a congressional hearing last week that affected companies would receive their money back. He has also indicated that tariff measures imposed under separate legal authorities are expected to generate comparable revenue in 2026, though some of those mechanisms have yet to be fully implemented.
The refunds coincided with a narrowing of the federal budget deficit, which fell 9% year-on-year to $1.25 trillion across the first eight months of the fiscal year. Meanwhile, interest payments on US debt surged 44% in May to $133 billion. Individual income tax withholdings, alongside Social Security and Medicare contributions, climbed to $286 billion from $247 billion a year earlier, while corporate tax receipts plunged 67%.
Looking ahead, the Congressional Budget Office projected in its February outlook that the full-year deficit would expand to $1.85 trillion in fiscal year 2026 and $1.89 trillion in 2027.
The repayments represent the first significant tranche of refunds processed after the Supreme Court determined that Trump lacked the legal authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). The administration began processing returns in April but has since appealed a court mandate requiring refunds to all importers who paid duties under IEEPA authority. The total sum in dispute stands at approximately $166 billion.
Treasury Secretary Scott Bessent told lawmakers at a congressional hearing last week that affected companies would receive their money back. He has also indicated that tariff measures imposed under separate legal authorities are expected to generate comparable revenue in 2026, though some of those mechanisms have yet to be fully implemented.
The refunds coincided with a narrowing of the federal budget deficit, which fell 9% year-on-year to $1.25 trillion across the first eight months of the fiscal year. Meanwhile, interest payments on US debt surged 44% in May to $133 billion. Individual income tax withholdings, alongside Social Security and Medicare contributions, climbed to $286 billion from $247 billion a year earlier, while corporate tax receipts plunged 67%.
Looking ahead, the Congressional Budget Office projected in its February outlook that the full-year deficit would expand to $1.85 trillion in fiscal year 2026 and $1.89 trillion in 2027.
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