Following the Supreme Court’s February ruling that Donald Trump’s tariff policy violated Congress’s tax authority, the administration must now refund the $159 billion it collected from its unconstitutional tariffs.
But unfortunately for American workers and consumers, winding down this fiscal fiasco results in a lose-lose-lose situation:
First, most Americans will never be reimbursed for what were effectively temporary sales taxes they paid for various imports, nor will they receive the public benefit of having those sums spent on government programs or projects.
Second, because it is logistically easier to reimburse the American companies that directly paid the tariffs, some corporations may enjoy windfall refund profits — presuming, that is, those companies did not go bankrupt.
Finally, the surviving businesses and the employees who still work for them — hundreds of thousands of workers were laid off because of the tariffs — will for the foreseeable future continue to suffer because foreign countries, companies, and citizens quite rationally retaliated against Trump’s policies.
Despite Trump’s woefully ignorant belief that tariffs transfer monies from foreign treasuries into our own, that’s not how they work.
Yes, tariff receipts temporarily ended up in Washington. But those taxes were paid indirectly, via increased retail prices, by every American who bought imported goods or products made from imported components. Yale Budget Lab estimated the price tag per American at $2,400 per year, which is almost how long tariffs were in effect until the Supreme Court’s February 20 decision. Because it’s nearly impossible for individual citizens to compute how much they paid in tariffs, no less apply for reimbursements, most will get nothing.
Who will likely get most of the tariff-generated revenues the Supreme Court mandated the Trump administration refund? American businesses, of course. But do they deserve it?
Small or large, businesses and corporations initially paid the tariffs. They then faced two unenviable options: (a) raise prices to account for the added costs, thereby risking lost sales, or (b) absorb the tariff costs at the expense of profitability. The logical move was to pass the tariffs along to consumers, but either way businesses reliant on imports suffered.
Which is why many businesses — including notable corporations like Mack Trucks and Proctor & Gamble — explained substantial layoffs as a consequence of the policy. Other companies shuttered entirely; in fact, year-over-year business bankruptcies rose 14 percent in 2025 thanks mostly to Trump’s tariffs. Small businesses represented by the Chamber of Commerce — once the free market backbone of the pre-Trump Republican Party — were particularly hard hit.
Consequently, roughly 100,000 manufacturing jobs were lost in 2025 after businesses scaled back or closed entirely. And because other companies, like outdoor retailer Orvis, closed multiple store locations, the 2025 retail job loss rate was even higher than in manufacturing. Nobody suffered more from Trump’s tariff policy than the workers who lost hours, shifts, or their jobs entirely. No wonder personal bankruptcies in 2025 surged 11 percent above 2024 levels.
Suffice to say, forcing workers into unemployment and businesses into bankruptcy is precisely the kind of unintended yet predictable consequence Trump and his advisers were warned about but ignored.
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