Court Orders Trump to Refund Companies Over Illegal Tariffs, Owes Up to $175 Billion and $700M Monthly in Interest

The federal government is facing a staggering $175 billion 'repayment tsunami' after a New York judge ruled on 4 March 2026 that all importers are entitled to refunds for illegal Trump-era tariffs.

Building on a February Supreme Court decision, Judge Richard Eaton of the US Court of International Trade declared that importers of record are 'entitled to benefit' from the voiding of duties imposed under the International Emergency Economic Powers Act (IEEPA).

The ruling marks a total collapse of President Trump's signature global 'reciprocal' tariff policy, which the High Court found exceeded presidential authority.

The financial fallout is compounding daily. According to a Cato Institute analysis, the Treasury is accruing approximately $23 million in interest per day—roughly $700 million per month—as the administration navigates the logistical nightmare of returning the funds.

How Did The Numbers Align?

The cost of delaying these refunds is falling squarely on American taxpayers. Scott Lincicome, Vice President of General Economics at the Cato Institute, warned that capital tied up in these illegal duties must be returned with interest, per federal law.

'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, VP General Economics at the Cato Institute, told CBS News in an interview.

Cato's math is grim: About $23 million per day hit on the $175 billion dollar refund pile. The analysis takes the $134 billion already collected under the International Emergency Economic Powers Act (IEEPA), adds the $175 billion figure from the Penn Wharton Budget Model, and then applies the customary interest rates of 6% for shipments under $10,000 and 4.5% for larger volumes.

A one-year delay could push new interest payments to $8.4 billion.

The report reads that it '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'

The numbers are not abstract. For a small business owner, each day that a dollar is withheld is a dollar lost to rent, wages or new stock.

Big Companies Sue Government

Even large names are suing for refunds. Bausch & Lomb, Dyson, FedEx and L'Oreal have joined the file. FedEx has gone a step further and has vowed to refund shippers and consumers the charges if the company is made whole. In the hallways of the US Customs and Border Protection office, the buzz of paperwork is more burdensome than ever before.

According to The Hill, over 1,000 companies have filed a resolution, suing the government to return billions of dollars.

Trump Administration Remains Defiant

The Trump administration has remained defiant despite the back-to-back judicial defeats. White House spokesperson Kush Desai declined to comment on the $700 million monthly interest figure but maintained that the tariffs were a success. Desai claimed the duties helped 'cool inflation' and spurred trillions in domestic manufacturing investment, framing the court's interference as a risk to national security.

However, the Penn Wharton Budget Model projects that reversing these tariffs will reduce future revenue collections by nearly half unless a new tax source is established. While President Trump has threatened to impose a 10% 'stopgap' tariff under different legal authorities, experts warn these measures may face similar constitutional challenges.