- Since tariff reimbursement on this scale has few precedents, analysts warn that claims processing, legal disputes and verification procedures could stretch over a prolonged period

ISTANBUL

A landmark ruling by the US Supreme Court limiting President Donald Trump’s tariff authority has triggered a wave of uncertainty across global trade – but for American businesses, the most immediate question is far more practical: who will refund the billions of dollars already collected in duties?

Importers, retailers and manufacturers say the decision has opened the door to massive reimbursement claims, potentially reshaping cash flows across industries and forcing the federal government to confront a complex and unprecedented refund process.

“It creates a large uncertainty that affects US importers and small businesses,” said Max Gillman, a professor of economic history at the University of Missouri.

Chief Justice John Roberts, writing for the majority, emphasized that taxation authority belongs exclusively to Congress – a constitutional interpretation that calls into question tariffs imposed under executive authority and raises the possibility that duties collected under those measures may need to be returned.

Businesses now face a critical unknown: how refunds would be calculated, who qualifies, and how long reimbursement could take.

Since tariff reimbursement on this scale has few precedents, claims processing, legal disputes and verification procedures could stretch over a prolonged period. Companies may need to document past imports, tariff payments and contractual obligations – a bureaucratic burden that could overwhelm smaller firms.

Gillman cautioned that any refund mechanism would likely take years to complete. He added that while refunds could ease financial pressure on businesses, they would not resolve broader trade policy uncertainty.

Short-term boost

Charles Calomiris, an economist at Columbia Business School, said refunds could provide a temporary economic lift.

“A 0.5% refund would likely add to GDP growth in the short run, perhaps even more than that,” he said.

For companies that absorbed tariff costs rather than passing them on to consumers, reimbursements could restore liquidity, support investment and ease balance sheet strain. Retailers and import-heavy sectors such as electronics, machinery and consumer goods stand to benefit most.

However, Calomiris cautioned that the political response has complicated the outlook.

“The court ruling seemed to provide clarity and remove uncertainty, which could have had a very positive effect, but Trump’s reaction has increased uncertainty,” he said.

In response to the ruling, the administration invoked Section 122 of the Trade Act of 1974 to impose a temporary 15% global tariff for up to 150 days. Economists say this move could reduce the immediate economic relief that refunds might otherwise provide.

The refund issue also complicates trade relations. Partner countries are seeking clarity on tariff collections and potential reimbursements tied to bilateral agreements.

Calomiris noted that future tariffs may require proof of unfair trade practices, opening the door to new negotiations.

“If you are a country with no unfair trade restrictions, you may be tempted to bargain anew,” he said.

Gillman suggested renegotiations may be limited but possible in tentative agreements. “In the EU in particular, they will hold up the approval and possibly renegotiate,” he said.

He expects China to be “very careful since they have so blatantly violated the World Trade Organization rules ... through theft of intellectual property and subsidization by the Chinese state of production of goods on a massive scale.”

What comes next?

If refunds are mandated on a large scale, the fiscal implications could be significant. Billions of dollars in repayments would likely be financed through additional Treasury borrowing, shifting the cost from importers to taxpayers.

At the administrative level, the government must determine eligibility criteria, timelines and dispute resolution mechanisms – all while managing political pressure from businesses demanding swift action.

Companies that passed tariff costs to consumers could face legal and ethical questions about whether refunds should be returned to customers or retained as corporate recovery.

Although refunds could eventually inject liquidity into the economy, the timeline remains unclear. Businesses must continue operating under uncertain trade rules while awaiting guidance from courts, Congress and federal agencies.

Calomiris warned that political dynamics may further complicate outcomes, with the landscape shifting as the midterm elections draw nearer and economic indicators soften.

“It seems obvious that Trump should change course. Trump doesn’t like losing elections but he has been very stubbornly and self-destructively wrong on this issue,” he said.

For now, the Supreme Court’s ruling has shifted the center of gravity in US trade policy, but for importers and small businesses, the immediate concern is not constitutional doctrine or geopolitics: it is whether and when they will get their money back.