Treasury Warns of Trillions in Potential Refunds if Trump’s IEEPA Tariffs Are Overturned; Legal Experts Say Outcome Unclear

Treasury Secretary Scott Bessent warned last week that the United States could be required to refund hundreds of billions, possibly as much as $750 billion to $1 trillion, to importers if the Supreme Court invalidates President Donald Trump’s use of emergency authority to impose sweeping tariffs. The levies, known as the “reciprocal” or “Liberation Day” tariffs, were issued under the International Emergency Economic Powers Act, or IEEPA, a statute no prior president had used to impose tariffs.

Bessent said he was confident the administration would prevail at the high court but told reporters that if the court rules the tariffs unlawful the Treasury “would have to give a refund on about half the tariffs,” a result he said would be “terrible for the Treasury.” The administration asked the Supreme Court to intervene after the Court of International Trade ruled in May that the IEEPA did not authorize the tariff program and an appeals court declined to sustain the administration’s legal theory.

Legal scholars and trade specialists said the mechanics of any refund obligation are uncertain and that a Supreme Court ruling striking down the tariffs would not necessarily result in wholesale automatic refunds to every party that paid duties. "The result of that case is not going to be an order to issue refunds to everybody that's paid the tariffs," said Timothy Meyer, a professor of international business law at Duke Law, who has followed the litigation. "But that decision is going to control the legality of the tariffs."

Solicitor General D. John Sauer framed the administration’s appeal in stark terms, writing that the President and Cabinet have concluded the tariffs are promoting peace and economic prosperity and that denying tariff authority would expose the country to trade retaliation and economic harm. The government has asked the justices to resolve whether IEEPA provides the authority the administration invoked.

Experts said several layers of legal and administrative procedure would likely follow any ruling by the Supreme Court and could limit how refunds are handled. If the high court rules the IEEPA-based orders unlawful, the matter could be remanded to the Court of International Trade for further proceedings, including whether that court should order the government to stop collecting the contested duties entirely or identify which payments must be returned, Meyer and others said.

Timing is another complicating factor. Both Meyer and Kathleen Claussen, a law professor at Georgetown University Law Center, said litigation and administrative appeals could continue for years, potentially extending into 2026. Claussen added that the Supreme Court’s framing of the legal question will determine how much of the tariff regime is affected and how any refund process would be structured.

Even if the law is declared invalid, businesses seeking refunds would face significant practical hurdles. Importers would generally need to demonstrate they paid the contested duties, producing documentary proof of tariff payments that frequently vary over time. The tariff rates under the IEEPA orders have changed repeatedly, and a single shipment can be subject to multiple duties depending on origin and timing, making it difficult to isolate amounts paid under the specific orders at issue in the litigation.

Further complicating matters, many importers use customs brokers, freight forwarders or other third-party agents to manage border paperwork and pay duties. Under U.S. customs law, the party that actually paid the duty to Customs and Border Protection is the one entitled to seek a refund, which may not be the manufacturer, retailer or ultimate consumer who bore the economic incidence of the tariff. That creates potential disputes over who has standing to recover and who must compile evidence to substantiate a claim.

Administrative limits could also bar or narrow claims. A statutory process governs tariff adjustments, and tariff claims generally must be brought within 314 days — a little more than 10 months — under current rules. Claussen said the Supreme Court could fashion a remedy that extends that period or creates a special pathway for claims tied to the litigation, but she cautioned that importers are presently unsure how to preserve their rights.

"Importers don't really know what to do to preserve their rights," Claussen said. "If they had the opportunity to get a refund, what would they need to do?" That uncertainty has left businesses nervous and seeking guidance from customs counsel and trade associations.

The case also raises broader policy questions about executive authority. The Trump administration’s use of IEEPA to impose tariffs marked an unprecedented expansion of the statute, which traditionally grants the president authority to regulate economic transactions during national emergencies rather than to set import duties — a power generally vested in Congress. The lower-court ruling that found the orders unlawful centered on that statutory interpretation.

If the Supreme Court declines to hear the appeal, the lower-court judgment would likely stand, potentially limiting the administration’s ability to rely on IEEPA for trade measures moving forward and constraining future use of similar emergency orders. If the justices accept the case, their decision will resolve a contested question about the scope of presidential authority and could trigger complex remedial proceedings to determine whether and how private parties may recover duties paid under the orders.

For now, the Treasury’s estimate of up to $1 trillion in potential refunds serves as a blunt measure of the stakes from a fiscal perspective, but trade lawyers and scholars stressed that the path from a legal ruling to actual payments is neither direct nor guaranteed. The litigation’s outcome and its practical effects will depend on the Supreme Court’s legal framing, subsequent proceedings in the lower courts, and administrative decisions about how to process any claims that arise from a final judgment.

Businesses that paid the IEEPA tariffs will likely continue to monitor the case closely and to consult legal counsel about preserving documentation and potential claims. Courts and federal agencies, if the case proceeds, will confront the task of translating a high-court ruling into concrete remedies for parties across complex global supply chains.