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

The federal government is estimated to owe American businesses up to $175 billion in tariff refunds after the Supreme Court struck down much of the Trump administration's import duties last month. But the U.S. could end up owing considerably more money, according to a new analysis — in interest payments. 

Research from the Cato Institute, a nonpartisan think tank in Washington, D.C., said that the delay in refunding companies for emergency tariffs invalidated by the high court is costing U.S. importers a total of $700 million per month, or $23 million per day, based on the interest owed on the illegally collected duties. 

"If you import a good and pay a duty on it that the government assesses was wrong, you get your money back with interest, because that capital was tied up," Scott Lincicome, vice president of general economics at the Cato Institute, told CBS News. 

The Trump administration had said it would issue refunds if the duties targeting nearly every U.S. trading partner around the world were found unlawful by the Supreme Court.

White House spokesperson Kush Desai declined to comment directly on Cato's findings. Instead, he said that because of President Trump's tariffs, Americans "have seen inflation cool, economic growth accelerate and trillions in investments pour into American manufacturing — on top of new deals to cut prescription drug prices and end unfair foreign trade practices."

"Americans continue to reap the benefits of President Trump's powerful use of tariffs," Desai added.  

Refund barrier removed

The U.S. Court of Appeals for the Federal Circuit on Monday denied the Trump administration's request to delay the refund process. The decision opens the door for the U.S. Court of International Trade to set up a process to reimburse the small businesses that successfully challenged Mr. Trump's global tariffs.

Cato's calculation of how much the government owes in additional interest payments assumes the U.S. had collected $175 billion in tariffs when they were struck down in February, basing that figure on estimates from the Penn Wharton Budget Model at the University of Pennsylvania and other sources. 

U.S. Customs and Border Protection data shows that, through the end of 2025, the federal government had collected $134 billion in duties under the International Emergency Economic Powers Act (IEEPA).

Delays in providing tariff refunds "would leave American taxpayers on the hook for billions in interest that the government would owe importers on top of the tariff refunds — interest that the government has already acknowledged in multiple public filings and has promised to pay," Cato said in its report. 

Interest payments required

Interest payments on tariff overpayments are required under U.S. customs rules, with the Code of Federal Regulations stating that the government must pay interest on reimbursable duties. The IRS' corporate overpayment rates establish interest rates on refunds. 

Under current U.S. trade laws, the tax rate on imports worth less than $10,000 is 6% and 4.5% for larger volumes of goods worth more than $10,000. Based on those rates, delaying refunds for one year could result in additional interest payments on the illegal IEEPA tariffs of $8.4 billion, according to Cato. 

"I don't know what the administration will argue, but the law says — and courts have been clear — that they are going to require refunds with interest," Lincicome said. 

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 pledged to refund shippers and consumers who paid the charges if the business is ultimately made whole.