Tariff refund delays could cost U.S. taxpayers $700 million a month in interest, report finds

The recent Supreme Court decision striking down much of the Trump administration’s import duties has left the federal government owing American businesses an estimated $175 billion in tariff refunds. However, a new analysis suggests that the U.S. could end up owing even more money in interest payments.

According to research from the Cato Institute, the delay in refunding companies for emergency tariffs invalidated by the Supreme Court is costing U.S. importers a total of $700 million per month, or $23 million per day, in interest payments on the illegally collected duties. Scott Lincicome, vice president of general economics at the Cato Institute, explained that if importers pay a duty that the government later deems to be incorrect, they are entitled to a refund with interest due to the tied-up capital.

The Trump administration had previously indicated that it would issue refunds if the tariffs, which targeted nearly every U.S. trading partner, were found to be unlawful. However, the U.S. Court of Appeals for the Federal Circuit recently denied the administration’s request to delay the refund process, allowing the U.S. Court of International Trade to set up a reimbursement process for small businesses affected by the tariffs.

Cato’s analysis is based on the assumption that the government had collected $175 billion in tariffs before they were struck down. U.S. Customs and Border Protection data shows that $134 billion in duties had been collected through the end of 2025 under the International Emergency Economic Powers Act (IEEPA).

Under U.S. customs rules, the government is required to pay interest on reimbursable duties. The Code of Federal Regulations stipulates that interest rates on refunds are determined by the IRS’ corporate overpayment rates. Based on current U.S. trade laws, delaying refunds for one year could result in additional interest payments on the illegal IEEPA tariffs amounting to $8.4 billion.

Several major corporations, including Bausch & Lomb, Dyson, FedEx, and L’Oreal, have sued the federal government for refunds on the tariffs they paid under IEEPA. FedEx has also committed to refunding shippers and consumers who paid the charges if the business is ultimately reimbursed.

In conclusion, the federal government’s delay in refunding American businesses for invalidated tariffs could result in significant interest payments on top of the $175 billion owed in refunds. It remains to be seen how the government will address these mounting financial obligations.