After the Supreme Court struck down his emergency “Liberation Day” tariffs last month, Donald Trump had a public meltdown. The president delivered a 44-minute diatribe that expertly blended falsehoods (“the Court has been swayed by foreign interests”), ad hominem bile (the justices are “an embarrassment to their families”), and a Freudian non sequitur (“I want to be a good boy”).

Amid the toxic bluster, Trump did offer one cogent observation. When asked whether the federal government would refund the tariff money it had already collected, he responded, “They take months and months to write an opinion and they don’t even discuss that point … Wouldn’t you think they would have put one sentence in there saying keep the money or don’t keep the money, right?” On this point, Trump was spot-on. At stake was more than $160 billion already paid under the invalidated tariffs — exceeding the combined annual budgets of the Department of Justice, Department of Homeland Security, EPA, and NASA.

In a 170-page ruling, a cross-ideological majority of the Supreme Court declared the tariffs under the International Emergency Economic Powers Act unconstitutional. But the justices conspicuously left unanswered a major question they knew would linger over the case. At oral argument in November 2025, they spent substantial time puzzling over what would happen to all that money if they were to strike down the tariffs. Yet when the decision dropped three months later, they decided not to decide. (Must be nice; if a thorny issue presents itself, just ignore it.) The only mention of the looming refund dilemma came in a dissent from Justice Brett Kavanaugh, who correctly noted it would create “a mess.”

The next round of litigation is already underway, with U.S.-based importers suing to recover the money they wrongly paid. It’s increasingly clear that Trump will lose here, too. (Despite repeated false claims by the president and others that foreign countries pay tariffs, they do not; American businesses pay when they import tariffed goods.) A Tennessee-based filtration company sued the federal government to recover its tariff payments, and Judge Richard Eaton of the Court of International Trade did the plaintiff one better: He ruled that not only the filtration company but “all importers of record” who paid IEEPA tariffs are entitled to full refunds plus interest. Judge Eaton’s decision to grant universal relief reflects the reality that for many smaller U.S. importers, the cost of litigation would likely exceed their refund amount. Now, if the initial ruling holds, those businesses can get their tariff payments back without the need to hire attorneys and file lawsuits.

The Trump administration absolutely could have unilaterally decided (and could still decide) to pay the tariff money back. Instead, it has made clear that it will offer no such voluntary accommodation. When asked whether the administration would choose to repay the invalidated IEEPA tariffs, for example, Treasury Secretary Scott Bessent repeatedly demurred, misleadingly claiming that “it is not up to me” or the administration but rather to the courts.

Nor will the Trump administration accede lightly to court rulings requiring repayment. Its lawyers immediately asked Judge Eaton to put his own ruling on hold. (He declined.) The White House is now virtually certain to appeal to the intermediate Federal Circuit and eventually to the U.S. Supreme Court.

But this is a losing battle politically and legally. An average fifth-grader can understand the basic fairness issue: If I gave you money to pay for something and then that thing turned out not to exist, you should give my money back.

The legal analysis isn’t much more complicated, and the outcome is all but inevitable. As Judge Eaton pointedly noted to the administration’s lawyers, “The Supreme Court told you what your position is. Your position is we’re going to refund this money. It can’t be anything else.” Indeed, it’s tough to imagine the federal courts ultimately finding that, yes, Trump’s IEEPA tariffs were unconstitutional but the government can keep all the proceeds anyway. The administration apparently begs to differ and will continue to press its case in court.

The longer the administration fights the inevitable, the more it will cost American taxpayers. The libertarian (and reputationally conservative-leaning) Cato Institute estimates that accruing interest on the outstanding tariff money will cost American taxpayers $23 million per day until the repayment issue is resolved. There’s no clear political benefit in doubling down, either: An NBC News poll released this week showed that 55 percent of all respondents believed the tariffs have hurt the economy, while only 33 percent said they have helped. Those numbers will only worsen for the administration the longer it holds out.

A separate but related question will also arise: What about consumers, who bore the financial brunt of tariffs in the form of higher prices? While it’s easy to root for American businesses as they seek refunds from the federal government, the end result is that those importers will likely end up reaping a substantial windfall — while individual purchasers stand to recover little if any of the extra money they spent on consumer goods.

Imagine that, during the ten-month lifespan of Trump’s IEEPA tariffs, a U.S.-based company that sells bicycles made in China paid $100,000 in tariffs to the federal government. That company then passed the extra cost on to consumers by raising the price of its bicycles from, say, $500 to $600 each. The company has already sold some number of bicycles at the elevated $600 price point, including the extra $100 per bike to cover the tariffs — and now, the company will likely receive a refund for the full $100,000 it paid in tariffs, plus interest.

Private businesses, including our hypothetical bicycle company, certainly can choose to send some or all of their refund to affected customers, but don’t count on that happening. And while consumers have the option to sue companies or the federal government, in most cases the cost of litigation wouldn’t be justified by the potential recovery.

Of all the parties who can stake some claim to the $160 billion in IEEPA tariffs, the federal government — which wrongly imposed those tariffs in the first place — has the weakest claim to keep the money. Any rational decision-maker understands that sometimes the best move is to cut losses, even if it stings a bit. But the Trump administration, still fuming about its loss in the Supreme Court, has chosen to dig in. It is a costly temper tantrum that will backfire in the courts and beyond.

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