Trump Pays Back $100B in Struck-Down Tariffs—While His New Canada Duties Remain Untouched

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The biggest refund in Donald Trump’s tariff campaign is now colliding with one of its newest escalations. The U.S. government has returned roughly $100 billion collected under emergency tariffs that the Supreme Court ruled were not authorized by law. Yet the administration’s latest 50% duties aimed at selected Canadian goods are still standing because they were issued under a different, nearly century-old statute.

That distinction matters. The refunds do not represent a broad retreat from protectionism, and they are not cheques being mailed to households that paid higher prices. Most of the money is going back to importers, while Canadian exporters are preparing for another round of border costs scheduled to begin later in August. The result is a trade policy moving in two directions at once: unwinding one tariff wall while rapidly constructing another.

The $100-Billion Refund Is Large but Limited

The headline number is striking: about $100 billion has been repaid from roughly $165 billion collected through the tariffs commonly associated with Trump’s “Liberation Day” trade program. That means around 60% of the money taken under the invalidated emergency authority has already been returned, a much faster pace than many businesses and trade lawyers initially expected. Customs officials have also reported that refund requests covering more than $128 billion had been accepted for processing, although acceptance does not mean every dollar has already reached a company’s bank account.

The payments are being handled by U.S. Customs and Border Protection and the Treasury, not by Trump personally. They also concern a specific group of tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. Other duties imposed under separate trade laws were never included in the Supreme Court decision. That is why a manufacturer can receive a refund for one shipment while still paying tariffs on another product arriving at the same port. The policy reversal is enormous, but it is not universal.

Why the Supreme Court Struck the Tariffs Down

The legal turning point came on February 20, when the Supreme Court held that IEEPA does not authorize a president to impose tariffs. The administration had argued that the law’s power to “regulate” imports during a declared emergency was broad enough to include import taxes. A six-justice majority rejected that reading, emphasizing that tariffs are a form of taxation and that Congress had not clearly transferred an unlimited tariff power through the emergency statute.

The ruling covered both the worldwide “reciprocal” tariffs and the drug-trafficking tariffs imposed on imports from Canada, Mexico and China under IEEPA. It did not say presidents can never impose tariffs. Instead, it drew a line between emergency powers and trade statutes that expressly mention duties. That distinction left the White House with several alternative tools, including Sections 232, 301, 122 and 338. For businesses, the judgment brought relief but not certainty. The broadest tariff program had been struck down, while the administration immediately began rebuilding parts of it under different legal authorities.

Refunding the Money Required a New Customs System

Turning a Supreme Court judgment into billions of dollars of repayments required a separate administrative process. The Court of International Trade ordered the government to return duties collected without a lawful basis, and Customs developed new electronic functionality for importers to submit and track claims. The process depends heavily on entry records, liquidation status and whether the claimant was officially listed as the importer of record. Those details can determine who is legally entitled to receive the refund.

That can become complicated in modern supply chains. A small retailer may have bought goods from a distributor that handled customs, while a large platform may have imported some products directly and hosted third-party sellers for others. The company that ultimately raised prices is not always the same company that paid Customs. General Motors, for example, has said it expects a tariff refund of roughly $500 million, while other major companies have disclosed sizable claims or one-time earnings benefits. The refund system is therefore correcting customs payments, not reconstructing every commercial transaction that occurred after the tariff was charged.

Consumers Are Not Automatically Getting Their Money Back

For households, the most important limitation is simple: there is no automatic consumer refund. Tariffs are paid at the border by U.S. importers, so the government normally returns an invalid duty to the importer of record. A shopper who paid more for a refrigerator, tool, toy or vehicle does not have a direct claim against Customs, even when the higher retail price reflected part of the tariff cost.

Research helps explain why that gap is politically sensitive. Economists at the Federal Reserve Bank of New York found that nearly 90% of the economic burden from the 2025 tariffs fell on U.S. firms and consumers rather than foreign exporters. Separate Federal Reserve work found that tariff-related retail price increases accumulated gradually, which means households often experienced the cost as a series of small increases rather than a clearly labelled border tax. Some companies may use refunds to strengthen margins, reduce debt or avoid future price increases; others may voluntarily compensate customers in limited cases. But there is no general rule requiring refunded importers to pass the money back down the supply chain.

Refunds Have Temporarily Erased Tariff Revenue

The refunds have also scrambled the fiscal story surrounding tariffs. In June alone, the Treasury issued about $49.2 billion in tariff refunds while collecting roughly $23.6 billion in gross customs duties. That produced a net customs outflow of approximately $25.6 billion for the month. May was close to break-even after about $22 billion in repayments, meaning the refund wave temporarily erased the revenue being generated by tariffs that remain in force.

That does not make the refunds an additional economic loss equal to the full amount, because the government is returning money it collected unlawfully. It does, however, affect the federal cash balance at a time of large deficits and rising interest costs. The June budget deficit reached about $120 billion, compared with a surplus a year earlier, with tariff repayments contributing significantly to the swing. The episode also shows the danger of treating disputed tariff revenue as permanent funding. A levy can generate tens of billions quickly, but if its legal foundation collapses, the Treasury may have to reverse the collections just as rapidly.

The Canada Tariffs Use a Different Law

The new Canada duties sit outside the Supreme Court ruling because they were issued under Section 338 of the Tariff Act of 1930, not IEEPA. Section 338 expressly authorizes tariffs of up to 50% when the president finds that another country discriminates against U.S. commerce. Trump invoked it in three proclamations addressing Canadian policies involving motor vehicles, alcoholic beverages and dairy market access. The administration says those policies disadvantage American exporters and justify a targeted response.

Legally, that puts the new measures in a different category from the tariffs being refunded. The Supreme Court decided what IEEPA means; it did not evaluate Section 338 or approve the factual findings made against Canada. The duties are therefore untouched by that particular judgment, but they are not immune from a new lawsuit. Section 338 had never previously been used to impose tariffs, and legal analysts have raised questions about whether later trade laws displaced parts of it, whether an International Trade Commission process was required and whether the administration’s findings support the products selected. The next fight would begin on different statutory ground.

The 50% Duties Cover Nearly $20 Billion in Goods

The three proclamations impose an additional 50% tariff on selected Canadian goods scheduled to enter the United States starting at 12:01 a.m. on August 19. The U.S. Trade Representative estimates that the measures cover nearly $20 billion in annual imports. The lists extend well beyond the sectors named in the administration’s complaints, reaching products such as wine, cement, dairy goods, hockey equipment, furniture, clothing, fishing gear and other consumer or industrial items. Energy, potash, certain critical minerals and goods already covered by Section 232 duties are among the exclusions.

One unusual feature is that covered products can be taxed even when they otherwise qualify for duty-free treatment under the Canada-U.S.-Mexico Agreement. That weakens the practical value of CUSMA origin rules for affected exporters. A Canadian company may meet the agreement’s content requirements and still face the new surcharge because Section 338 has been layered on top. For American buyers, a 50% duty can force difficult choices: absorb the cost, raise prices, seek a U.S. supplier or switch to another foreign source. None of those adjustments happens without disruption.

Another Courtroom Battle Is Taking Shape

The refund program and the Canada tariffs reveal the administration’s broader strategy after its Supreme Court defeat: abandon the legal authority that failed, but preserve the tariff policy wherever another statute can be used. The White House has also introduced new global duties under Section 301, while existing national-security tariffs under Section 232 remain in place. Twenty-five U.S. states have already challenged the latest global measures, showing that the tariff battle has shifted from one decisive case into several overlapping legal fronts.

For Canada, the immediate focus is the August 19 deadline and whether negotiations can prevent the 50% duties from taking effect. Ottawa has argued that its measures were responses to earlier U.S. tariffs and that the new levies undermine CUSMA. Businesses on both sides of the border are left planning around a policy that can change through proclamation, negotiation or litigation. The $100 billion repayment is therefore not the end of Trump’s tariff campaign. It is evidence that courts can force a major reversal—and that the administration is prepared to keep testing how much tariff authority remains elsewhere in U.S. law.

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