US Tariff Revenue Turns Negative as Billions in Refunds Flow to Importers but Not the Shoppers Who Paid

For the first time in modern US history, the federal government paid out more in tariff refunds than it collected in June, handing billions back to importers while the shoppers who absorbed those costs at the checkout get nothing.

Treasury Department data showed net customs receipts fell to negative $25.6 billion (£19 billion) in June, as the government collected $23.6 billion (£17.7 billion) in duties but sent $49.2 billion (£36.8 billion) back to businesses. It was the sharpest sign yet of a reversal that began in May.

A Revenue Stream That Ran Dry

Between June 2025 and February 2026, tariffs brought in $27 billion (£20 billion) to $31 billion (£23 billion) a month. That flow collapsed after the Supreme Court ruled on 20 February that the levies imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful, in a 6-3 decision. May was nearly a wash, with refunds and collections both near $21.9 billion (£16.4 billion). June erased any doubt.

Customs officials estimated that roughly $166 billion (£124 billion) collected from about 330,000 importers became eligible for repayment. Around $81 billion (£60.6 billion) has gone out so far this fiscal year, against just $5 billion (£3.7 billion) in the same period a year earlier. The payouts pushed June's federal deficit to $120 billion (£90 billion), a swing from a $27 billion (£20.2 billion) surplus a year earlier.

The Shoppers Who Won't See a Cent

Here is the catch for households. A Federal Reserve Bank of New York study found that about 90% of the roughly $175 billion (£131 billion) raised by the IEEPA tariffs was paid by American consumers and businesses, not foreign exporters. Research put the 2025 cost at around $1,000 (£749) per household as importers passed the duties down the supply chain into store prices.

Yet the refunds flow only to the importer of record, the company that cleared the goods through customs. The family that paid more for a stroller, a laptop, or a washing machine has no claim.

A Refund Fight Still in the Courts

The Supreme Court did not order repayment directly. It sent the question to the US Court of International Trade, which is working through nearly 2,000 claims. The process is slow and contested. The administration has appealed a ruling that widened who can reclaim the duties, and a federal judge has warned that the appeal is delaying payments to eligible firms.

New Tariffs Fill the Gap

The revenue hole has not changed the White House course. A 10% stopgap surcharge under Section 122 of the Trade Act expired on 24 July, and the administration replaced it with fresh duties of 10% to 12.5% on dozens of countries citing weak enforcement of forced-labour bans under Section 301. Brazil faces a 25% rate, while Canada was slapped with a historic 50% levy on many goods under Section 338 over trade discrimination.

Steel, aluminium, copper, and car tariffs under Section 232 were never struck down and remain in force. Treasury Secretary Scott Bessent said combining the three authorities would keep tariff revenue 'virtually unchanged' in 2026. Independent estimates put the cost of the surviving Section 232 duties at about $400 (£300) per household this year.

For now, the ledger tells a blunt story. Washington is repaying the businesses that wrote the cheques, not the people who paid at the register.