5 Reasons Paying Back Trump’s Tariffs Won’t Be a Win for Americans
Written by
Tobi Opeyemi Amure
Edited by
Angela Corry
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If the U.S. Supreme Court decides that the Trump administration overstepped its legal authority with certain tariffs, the government could be ordered to refund billions of dollars to businesses. While paying back these tariff collections might seem to help companies, economists and experts warn that this repayment could bring serious economic problems, which could leave everyday Americans worse off.
Large-scale refunds could increase government borrowing and inflation pressures, eroding the benefits Americans might expect.
American Consumers Gain Nothing
Tariffs act as taxes on imports, but it’s American consumers who ultimately pay more for goods and services. Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative, puts it simply: “Tariffs are taxes that raise costs for Americans and slow economic growth.”
While businesses may get refunded if tariffs are repealed, individual consumers don’t get a rebate for the extra they already paid during the tariff period. That means Americans absorb the cost, bearing higher prices without direct compensation.
Increased Government Borrowing and Debt
The tariffs imposed under Trump have generated more than $100 billion in revenue for the Treasury so far in 2025. A Supreme Court ruling against these tariffs would require the government to repay much of this money. The government would likely have to borrow heavily to cover this unexpected expense.
This increased borrowing would drive up the national debt, raising interest rates and putting more financial strain on American taxpayers and businesses. According to CRFB fiscal analysts, “the refund burden could exacerbate the fiscal deficit, crowding out other government spending that supports the public.”
Inflation Pressures Could Intensify
Refunding huge tariff revenues risks adding fuel to already persistent inflation challenges. The extra capital flowing back to businesses might increase consumer demand at a time when supply chains remain fragile, further pushing up prices.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, told CNN that adding billions back into the economy could raise inflation risks reminiscent of past overheating episodes. For American families facing already tight household budgets, this prospect offers little relief.
Administrative Challenges and Business Uncertainty
The logistics of repaying tariffs to thousands of businesses are expected to be a quagmire. According to agency data, U.S. Customs and Border Protection has collected over $200 billion in tariff revenue. This revenue comes from American businesses of all sizes from October through August 24.
If the U.S. Supreme Court rules against Trump, the CBP would need to verify and process refund claims, a task that experts expect to be time-consuming and expensive. American businesses could face unpredictable timelines and amounts for refunds, complicating financial projections and hindering investment decisions. This uncertainty risks destabilizing supply chains and stalling economic activity at a vulnerable moment.
Distorted Market Signals Undermine Economic Efficiency
Refunding tariffs sends confusing signals about trade policy stability, which could cause businesses to delay investments and hiring. This uncertainty slows economic growth, leading to fewer jobs and lower wages for Americans. Higher costs from tariffs also reduce consumers’ purchasing power, making everyday goods more expensive.
Over time, these disruptions weaken the economy, leaving workers and families facing tougher financial conditions and fewer opportunities. The Penn Wharton Budget Model estimates that tariffs could shrink U.S. GDP by about 6% and reduce wages by 5%, highlighting the real harm to American households. Stable trade policies are essential for a strong economy that benefits everyone.
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