Washington could be staring at a massive tariff-refund bill — and the meter is still running.
After the Supreme Court last month struck down much of the Trump administration's import duties, the federal government is estimated to owe American businesses up to $175 billion in refunds.
But a new analysis warns taxpayers may be hit with billions more in interest if the government drags its feet.
A report from the Cato Institute, a Washington, D.C.-based think tank, says delays in paying back importers for emergency tariffs invalidated by the high court are costing U.S. importers about $700 million per month — roughly $23 million per day — based on the interest owed on duties that it argues were collected illegally.
"If you import a good and pay a duty on it that the government assesses was wrong, you get your money back with interest because that capital was tied up," Scott Lincicome, vice president of general economics at the Cato Institute, told CBS News.
The Trump administration previously said it would issue refunds if the Supreme Court found the sweeping duties — aimed at nearly every U.S. trading partner — unlawful.
White House spokesperson Kush Desai declined to comment directly on Cato's findings. Instead, he credited President Donald Trump's tariff strategy for economic gains, saying Americans "have seen inflation cool, economic growth accelerate, and trillions in investments pour into American manufacturing — on top of new deals to cut prescription drug prices and end unfair foreign trade practices."
"Americans continue to reap the benefits of President Trump's powerful use of tariffs," Desai added.
A key procedural roadblock fell this week. The U.S. Court of Appeals for the Federal Circuit on Monday rejected the Trump administration's request to delay the refund process, clearing the way for the U.S. Court of International Trade to set up a system to reimburse the small businesses that successfully challenged Trump's global tariffs.
Cato's estimate of the government's potential interest tab assumes the U.S. had collected $175 billion in tariffs when they were struck down in February, using estimates from the Penn Wharton Budget Model at the University of Pennsylvania and other sources.
However, U.S. Customs and Border Protection data show that through the end of 2025, the federal government collected $134 billion in duties under the International Emergency Economic Powers Act (IEEPA).
Cato warned that delays in processing refunds "would leave American taxpayers on the hook for billions in interest that the government would owe importers on top of the tariff refunds — interest that the government has already acknowledged in multiple public filings and has promised to pay," the report said.
Interest on tariff overpayments is required under U.S. customs rules, and federal regulations state the government must pay interest on reimbursable duties.
The IRS's corporate overpayment rates are used to set refund interest rates.
Cato says that with current U.S. trade-law rates — 6% for imports under $10,000 and 4.5% for shipments over $10,000 — a one-year delay could add $8.4 billion in interest on the illegal IEEPA tariffs.
"I don't know what the administration will argue, but the law says — and courts have been clear — that they are going to require refunds with interest," Lincicome said.
Nicole Weatherholtz ✉
Nicole Weatherholtz, a Newsmax general assignment reporter covers news, politics, and culture. She is a National Newspaper Association award-winning journalist.
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