The Supreme Court's rejection is "one thing," while the U.S. tax refund is "another thing."

After the Supreme Court ruled that Trump's tariffs were illegal, how the U.S. government will refund the tariffs collected has become an unresolved issue.

According to CCTV News, on the 20th local time, the U.S. Supreme Court ruled that the large-scale tariff measures implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA) lacked clear legal authorization.

The majority opinion written by Chief Justice John Roberts did not address the issue of refunds, leading to speculation that it intends to leave this matter to lower courts. However, Justice Brett Kavanaugh mentioned this issue in his dissenting opinion, stating that the process could be "a mess" and would have "significant implications for the U.S. Treasury."

Trump criticized the judges for failing to resolve the issue of tariff payments during a news conference on Friday, stating, "We will ultimately be entangled in court for five years." For U.S. businesses and the overall economy, this means more trade uncertainty.

Goldman Sachs estimates that by the time of the ruling, the government had collected between $115 billion and $145 billion in tariffs under the IEEPA. How these funds will flow back to businesses, and how the newly announced tariffs by Trump will be implemented, has become a dual challenge facing the market.

Previously mentioned by Wall Street Insight, Goldman Sachs believes that if the court overturns the tariffs, refunds will not occur automatically and may take months or even longer, relying on importers to take subsequent legal action.

The National Retail Federation has called for a simplified refund process, stating that tariff relief would provide economic support for business investment and operations. However, the actual implementation is far from simple—key questions remain unresolved, such as who is eligible to apply, how to prove that costs were not passed on to consumers, and what documentation is required.

The Battle for Refund Applications Has Begun

The primary issue facing U.S. businesses is how to recover the tariffs they have already paid.

Reports indicate that while awaiting the judge's ruling, more than 1,500 companies have filed tariff lawsuits with the trade court in an effort to obtain tariff refunds.

Retailers, including Costco, and large industrial companies like Alcoa, along with many well-known brands, have filed lawsuits. Most of these companies are headquartered in the U.S., but they also include U.S. subsidiaries of overseas companies.

Importers may need to apply for refunds from U.S. Customs and Border Protection and may require subsequent legal action. Georgetown University international trade professor Marc L. Busch believes that the quickest way for businesses to recover funds is for Congress to intervene and declare automatic refunds; otherwise, "this will take years."

Beth Benike, owner of Busy Baby, a Minnesota-based baby product retailer, stated that she has paid nearly $50,000 in tariffs and said:

I will join the class action lawsuit of small business owners, but I am uncertain about the refund process; no one knows what that will be. Julie Robbins, the founder of Ohio-based guitar pedal manufacturer EarthQuaker Devices, estimates that she has paid over $65,000 in tariff costs. Her procurement contract does not explicitly state that tariff costs are refundable, and her supplier has told her they are willing to refund, but she is still waiting to see if the authorities will return the funds.

Rick Woldenberg, CEO of an educational toy company, has filed a lawsuit regarding tariffs, stating:

I am confident of getting a refund plus interest because they (the government) have no right to take this money.

New Uncertainties Facing the Retail Industry

The ruling comes at a time when the retail industry is in its earnings report season, including Home Depot, which will release its earnings report on Tuesday.

While most companies are reporting quarterly results that ended before the ruling took effect, Neil Saunders, managing director at GlobalData, stated that this move could impact profit and earnings expectations. He said:

If they have already accounted for the high tariff costs in their performance, there may actually be some positive factors.

Zak Stambor, chief analyst at Emarketer, expects the ruling to provide a moderate boost to retail sales starting this year, but this benefit will gradually fade before 2028. He stated:

While this decision provides some short-term relief, it does not eliminate the broader trade policy uncertainties faced by retailers and brands.

Joe Feldman, an analyst at Telsey Advisory Group, noted that it takes time for businesses to try to recover the funds they have paid, and that most prices of goods, once increased, typically do not decrease, except for everyday items like milk and eggs. While operators may benefit from better profit margins in the short term, it is unlikely they will see cash windfalls or change pricing structures.

Morgan Stanley estimates that if 80% of the IEEPA tariffs are refunded, GDP will only grow by 17 basis points this year; if only 40% is refunded, GDP growth in 2027 will be just 8 basis points.

Scott Lincicome, vice president of economic and trade studies at the Cato Institute, pointed out:

Even with full immediate refunds, we are only injecting $150 billion into a $30 trillion economy, which is not catastrophic.