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By Hugh Cameron
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The Supreme Court’s decision to annul the bulk of President Donald Trump’s global tariffs means the government may now be made to refund billions of dollars paid by importers over the past year, a process former Commerce Secretary Wilbur Ross says will be nothing short of complete “chaos.”
In an interview with Newsweek, Ross, who served for the entirety of the president’s first term, said that the matter of rebates was a “very important topic” and one that the court had failed to address when issuing its ruling.
“They are the ultimate court of jurisdiction, so there's not much point in trying to decide whether they were right or wrong,” Ross said. “What I do think is very problematic is the chaos that they have created without doing anything to try to moderate it.”
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Supreme Court ‘Punted’ on Refunds
In its 6-3 ruling, the court held that President Trump overstepped his authority by imposing tariffs under the International Emergency Economic Powers Act, or IEEPA. It ruled that tariff power ultimately resides with Congress, and that the law’s text—permitting executives to regulate commerce during periods of crisis—had never been interpreted as broad permission to levy duties, even during national emergencies.
However, as Ross notes, the court “totally punted” on the question of rebates, with only Justice Brett Kavanaugh raising the matter in a dissenting opinion.
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“The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others,” Kavanaugh wrote. “As was acknowledged at oral argument, the refund process is likely to be a ‘mess.’”
According to the Penn Wharton Budget Model—a research body at the University of Pennsylvania—up to $175 billion has been paid in IEEPA duties under Trump, a sum that is now theoretically subject to refunds.
Will the Government Issue Refunds?
But the administration is signaling “that they will not voluntarily refund the tariffs,” says Wayne Winegarden, senior fellow in economics at the Pacific Research Institute. “Therefore, it is likely that the refund issue will be litigated through the courts.”
Speaking at the Economic Club of Dallas on Friday, Treasury Secretary Scott Bessent said that the Supreme Court provided no guidance on the rebates question, that the matter would likely play out through litigation in lower courts, and that this process “could be dragged out for weeks, months, years.”
“I got a feeling the American people won’t see it,” he said.
On Tuesday, however, Bessent said the administration would await guidance from lower courts—specifically the district-level U.S. Court of International Trade to which the matter was remanded—on whether and when to begin issuing tariff refunds, and that it would “follow what the lower court says to do.”
An 'Unfair' Outcome for American Consumers
Lizbeth Levinson, co-chair of Fox Rothschild’s International Trade Practice Group and an attorney currently representing a coalition of plaintiffs looking to secure their rights to refunds, told Newsweek that the government’s failure to issue these rebates could “result in a finding of contempt of court.”
However, she added that several questions remain regarding “whether refunds will be limited to those litigants who invoked the jurisdiction of the Court of International Trade or will be applied across the board to all importers, regardless of whether they joined the litigants at the Court.”
William Reinsch, senior adviser for the Economics Program at the Center for Strategic and International Studies (CSIS), told Newsweek that prior case law suggests that “there is a well-established process for obtaining refunds, and as of earlier this month, it is entirely electronic.”
He added that U.S. Customs and Border Protection (CBP) has never issued refunds “at this scale,” and that “current indications are that the government will make it hard.”
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And even if there were broad willingness to return the billions of dollars in unlawfully collected proceeds, Ross told Newsweek the outcome would be “very unfair” to the U.S. consumers who ultimately absorbed much of the tariff hit.
“The party who wrote the original check is the importer of record,” he explained. “But that importer probably passed along some, if not all, of the burden to a wholesaler, and the wholesaler probably passed along some or all of the burden to the retailer, and then some or all of the burden was borne by the consumer.
“So if you gave the rebates to the people who wrote the check, namely the importers of record, chances are that would give them a big windfall.”
And attempting to funnel these rebates directly to consumers would raise the equally thorny question of how to do so fairly.
“Let's say one family bought an expensive car that was subject to a big tariff, and another family during the tariff period perhaps only bought two pairs of sneakers,” Ross said. “How do you figure out who should get how much without somehow analyzing every single consumer purchase that every person in the U.S. made during the last period?”
“That would take all the AI capability in the whole world.”
'Toing and Froing' on Trade
Regardless, Reinsch told Newsweek he believes the Supreme Court ruling will unleash a torrent of further litigation, both on the refunds issue but also Trump’s newly enacted, 10 percent global tariff.
Following the striking down of the IEEPA tariff powers, the administration is now leaning on Section 122 of the 1974 Trade Act, allowing presidents to impose duties of up to 15 percent for up to 150 days without congressional approval to remedy “international payment problems.”
But “the developing consensus of economists,” Reinsch said, “is that the U.S. economy does not currently meet the statutory criteria for invoking the provision.”
Ross said that Trump has “plenty” of alternative powers to invoke should these be challenged and once the 150-day window shuts—such as Section 301 of the Trade Act or Section 232 of the Trade Expansion Act. However, he acknowledged that further “toing and froing” on trade will likely unsettle the average American business and American voter, who have “a very hard time adjusting to uncertainty.”
And this uncertainty, he says, regardless of any advancements Trump has made on the other critical issues like affordability or housing, will only hurt Republicans’ chances in this year’s elections.
“Everything that affects consumer attitudes will affect the midterms,” he said.
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