4 min readUpdated: Jul 14, 2026 05:59 PM IST
In a major reversal for President Donald Trump, the United States (US) government has refunded $81 billion in tariffs collected under a contested policy that plunged the world into a trade war. Washington’s actions followed the Supreme Court ruling a significant portion of the levies unlawful, according to newly released federal budget figures.
The refunds, paid to companies that had imported goods subject to the tariffs, mark a sharp increase from the $5 billion returned during the same period a year earlier. The current US fiscal year began in October 2025.
According to The Guardian, the spike follows the Supreme Court’s February decision striking down a substantial portion of Trump’s broad tariff measures, forcing the government to repay duties already collected. Most of the repayments were made during May and June, a US Treasury official told the publication.
Roughly $71 billion of the refunds were processed over those two months alone, representing about 42 per cent of the $166 billion in tariffs that are subject to repayment, according to Sky News.
Big setback for Trump
The ruling has dealt a major setback to one of Trump’s signature economic policies. Since returning to office last year, the US president has promoted tariffs as a tool to revive domestic manufacturing, negotiate better trade agreements and reduce the federal budget deficit.
However, fresh budget figures suggest that the fiscal gains from tariff collections have been largely offset by the court-ordered repayments.
Interest payments balloon
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The US federal budget deficit widened to $1.367 trillion during the first nine months of the fiscal year, an increase of 2 per cent compared with the same period last year, The Guardian said. Interest payments on the national debt exceeded $1 trillion, up 14 per cent, while defence spending also rose by 5 per cent amid the conflict in the West Asia, according to the report.
The refund process remains under judicial scrutiny. A federal judge recently criticised the government’s appeal against an order requiring the repayment of all illegal tariffs, saying the legal challenge was slowing compensation to affected businesses, as per Sky News.
Before the Supreme Court ruling, then Treasury Secretary Scott Bessent had argued that rising tariff collections demonstrated the success of Trump’s trade agenda.
“The budget results showed the US was ‘reaping the rewards’ from Mr Trump’s tariffs,” the report quoted Bessent as saying.
Trump readying fresh set of tariffs
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Despite the setback, the Trump administration is preparing a fresh round of tariffs. According to The Guardian, the current temporary 10 per cent global tariff is scheduled to expire on July 24, but the White House is considering new duties of between 10 and 12.5 per cent.
The proposed measures are expected to target countries including India, the United Kingdom, Japan, Taiwan and China, with Washington citing concerns over forced labour enforcement and industrial overcapacity. The administration has also threatened to impose 25 per cent tariffs on Brazil.
In the month of June, Trump has also warned European countries that impose digital services taxes on major US technology companies that they could face 100 per cent tariffs on exports to the United States.
In a post on Truth Social, Trump wrote: “Any Country that imposes such a Tax will immediately be met with a 100 per cent TARIFF on any and all Goods sent to the United States of America.”
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He added that the tariff would “supersede Trade Deals made with the Country, whether implemented, signed, or not.”
(Photo: @realDonaldTrump)
Countries including France, Spain and Italy already levy digital services taxes on large technology companies, while the UK imposes a 2 per cent digital services tax on major online platforms, search engines and marketplaces such as Apple, Google and Amazon, the report said.
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