February 24, 2026 11:26 AM UTC

The Tariff Refund Battle Shifts Into High Gear

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• by: Colorado Pols

Senator John Hickenlooper (D-Denver) joined with 21 of his Democratic colleagues on Monday to introduce the Tariff Refund Act of 2026 to require the Trump administration to begin refunding some $175 billion tariffs collected since early 2025 — putting small businesses at the front of the line.

As POLITICO reports:

The bill — spearheaded by Sens. Ron Wyden of Oregon, Ed Markey of Massachusetts and Jeanne Shaheen of New Hampshire with the support of Minority Leader Chuck Schumer and other senators — would require the administration to dole out reimbursements for tariffs that were previously imposed under the International Emergency Economic Powers Act and paid by importers.

The legislation also would require Customs and Border Protection to prioritize small businesses as it doles out refunds and give a report to Congress every 30 days until those refunds are repaid fully.

“Senate Democrats will continue fighting to rein in Donald Trump’s price-hiking trade and economic policies. A crucial first step is helping people who need it most, by putting money back in the pockets of small businesses and manufacturers as soon as possible,” Wyden said in a statement.

House Democrats have also prepped a bill to compel tariff refunds.

President Trump has railed against last week’s Supreme Court ruling invalidating is on-again, off-again jumble of tariffs implemented under the International Emergency Economic Powers Act (IEEPA), but the U.S. Customs and Border Protection announced those tariffs will no longer be collected as of today. It’s probably unlikely that any legislation proposed by Democrats can make it out of the Senate, but pushing for refunds — particularly for small businesses — is a political win for Democrats in 2026.

Meanwhile, the push for tariff refunds is underway in other venues as bigger corporations take aim. As CNBC reports:

Federal Express on Monday sued the U.S. government, seeking a “full refund” of the money the shipping giant paid for tariffs unilaterally imposed last year by President Donald Trump, which the Supreme Court ruled last week were illegal.

FedEx’s suit appears to be the first filed by a major American company seeking a refund for tariffs after Friday’s Supreme Court decision.

Other companies filed lawsuits staking claims to their refunds before the high court ruled that the tariffs Trump imposed under the International Emergency Economic Powers Act are illegal.

Those suits, whose plaintiffs include retail warehouse club giant Costco, remain pending at the U.S. Court of International Trade in New York, the same court where FedEx filed its lawsuit.

As The New York Times notes, the FedEx lawsuit likely presages other corporate lawsuits. Should any of these lawsuits succeed, the cost of refunding tariffs could prove very costly to the United States government. As Newsweek explains:

Thiemo Fetzer, a professor of economics at the University of Warwick in the U.K., told Newsweek that the ruling creates a “fiscal shadow” as the illegally collected tariff revenues may now need to be refunded, “worsening the U.S. fiscal position going forward and indirectly driving up taxes and interest rates for U.S. consumers.”

Given the costs of litigation and interest on duties—for which it could also be held liable—he added that the government might have to “reimburse large chunks” of customs revenue “at a premium” to the original amount paid by importers. [Pols emphasis]

From a political perspective, it is getting increasingly difficult for Republicans such as Rep. Gabe Evans (R-Ft. Lupton) to continue defending Trump’s tariff nonsense — particularly if it turns out that Trump’s policies will end up costing taxpayers more money because of interest and legal fees.

To replace the nixed IEEPA tariffs, the Trump administration today instituted a new 10% global tariff, which was notably less than the 15% rate that Trump had raged about on Saturday.