In February 2026, the US Supreme Court ruled 6-3 that tariffs imposed under the International Emergency Economic Powers Act in 2025 were unconstitutional. The court determined that only Congress holds the authority to levy taxes, not the executive branch. This decision triggered a retroactive refund process for duties collected by the government.
The total federal exposure for these refunds is estimated between $166 billion and $175 billion, including interest and processing costs. Customs and Border Protection manages the distribution through a new platform called CAPE. By mid-2026, tens of billions of dollars had already been processed through this system.
Major corporations have begun receiving significant payouts. Amazon reported $600 million in refunds during the second quarter of 2026. Williams-Sonoma collected $200 million, allocating $10 million to employee pension funds. Some firms are opting to sell their refund claims to third parties at a discount of $0.80 per dollar to accelerate cash flow.
Logistics companies FedEx, UPS, and DHL are currently facing lawsuits from consumers. Plaintiffs argue that because these carriers passed tariff costs to customers via surcharges, the refunds should be returned to those who paid the fees. The legal disputes highlight the complexities of how businesses are managing these unexpected financial windfalls.
