Treasury has pushed roughly 100 billion dollars of struck-down emergency tariffs back to importers. A growing line of consumer class actions is now asking whose money it was in the first place
By the Trade Desk, Peacock Tariff Consulting
WASHINGTON, August 7, 2026. Roughly 100 billion dollars in refunded tariff duties has been transferred to the Treasury for disbursement to importers, according to a government filing made this week in the United States Court of International Trade, marking the point at which the unwinding of the administration’s emergency powers tariffs has moved from a legal question to an accounting one. It has also opened a second front. As the money reaches corporate balance sheets, consumers who paid the tariffs indirectly through higher prices are suing the retailers and manufacturers who are collecting the refunds.
The filing, submitted Tuesday and reported by Fortune on Wednesday, put the figure at approximately 100 billion dollars sent to Treasury as of the end of July. That represents about 60 percent of the roughly 166 billion dollars the government collected under the International Emergency Economic Powers Act before the Supreme Court held those duties unconstitutional on February 20. Customs and Border Protection has accepted close to 129 billion dollars in potential and certified refund amounts for processing, with the difference between that figure and the 100 billion representing claims still moving through validation.
The mechanics have been faster than most trade lawyers expected in March. The Consolidated Administration and Processing of Entries system, which Customs built specifically to handle the refund wave, logged 252,496 refund declarations covering more than 25 million individual import entries as of July 31. Treasury disbursed 49.2 billion dollars in customs refunds in June alone, more than double the roughly 22 billion dollars paid out in May. The first payments went out around May 11.
How the money got here
The path from the Supreme Court’s February ruling to this week’s filing has been neither straight nor complete, and the gaps in it explain much of the litigation that has followed.
The emergency powers tariffs were the centerpiece of the administration’s 2025 trade program, applied to imports from more than 60 countries at rates ranging from 10 percent to well above 100 percent depending on origin and sector. The Supreme Court invalidated them in February, holding that the statute did not confer the authority the administration had claimed. Within weeks the administration had substituted a 10 percent global tariff under Section 122 of the Trade Act of 1974, an authority with a 150 day statutory clock, and when that clock expired on July 24 it substituted a Section 301 action premised on trading partners’ failure to prevent goods made with forced labor from entering United States commerce. Each substitution has drawn its own legal challenge. The practical effect for importers has been continuous duty exposure under shifting authorities, coupled with a refund entitlement for the period covered by the invalidated tariffs.
Getting the refunds out required building infrastructure that did not exist. On March 4 the Court of International Trade ordered Customs to liquidate certain unliquidated entries without applying the invalidated duties and to reliquidate entries that were not yet final. Two days later Customs told the court it was not ready to process refunds and estimated it needed roughly 45 days to develop the necessary functionality in the Automated Commercial Environment. Phase one of the resulting system went live on April 20. Phase two followed on July 7, expanding eligibility to include certain reconciliation-flagged entries that had been excluded from the initial rollout.
The system’s design has produced two significant categories of exclusion, and both are now the subject of dispute.
The first is temporal. There remains no mechanism for entries that have already liquidated and fall beyond the 80 day filing deadline that applied in phase one. Importers who did not identify affected entries quickly enough are outside the automated process, and their recourse runs through the protest procedure, which carries its own deadline of 180 days from the liquidation date. Trade counsel have been telling clients since the spring that filing a protest preserves refund rights even where the automated route appears available, on the theory that a protest costs little and forecloses little.
The second is procedural, and it is more consequential. Only the importer of record, the entity that declared and paid the duty to Customs at the border, may file a refund claim through the system. Holland and Knight, analyzing a July order from the Court of International Trade, concluded that the order confirmed that only importers that had actually sued would receive full refunds, a reading that has driven a wave of protective filings. The government has appealed the court’s underlying refund order, which means the scope of the entitlement is not finally settled even as the money moves.
The consumers arrive
The importer of record rule is the fault line. Because refunds flow only to the entity that paid duty at the border, and because research has consistently found that the economic burden of the tariffs fell on United States importers and consumers rather than on foreign exporters, the refund process returns money to companies that in many cases already recovered the cost through higher prices. Economists at the Federal Reserve Bank of New York published findings in February confirming that Americans, not foreign suppliers, bore the bulk of the tariff cost.
Treasury Secretary Scott Bessent anticipated the problem on the day of the ruling, describing the prospective rebates as the “ultimate corporate welfare,” offering relief to companies but not to the households that paid.
Consumers have taken the point to court. In July, New York resident Tyasia Johns filed a class action against the discount retailer Five Below, alleging that the company passed the cost of the invalidated tariffs to shoppers through higher prices, preserved its margins in the process, and has not returned the resulting refunds. The complaint cites the retailer’s reported 22.9 percent year over year increase in net sales, to 4.76 billion dollars in fiscal 2025, as evidence that price increases protected profitability. According to the filing, Five Below has not confirmed whether it applied for or received refunds through Customs, or whether it intends to pass any refunds on.
“The money that Defendant’s customers paid as a result of the inflated prices related to the IEEPA tariffs rightfully belongs to Plaintiff and the Class,” the complaint states, adding that the company “has not returned the money, nor has it represented that it has any intention of doing so.” The suit seeks injunctive relief and actual damages but does not specify a proposed class size or a damages figure. Five Below did not immediately respond to a request for comment from Fortune.
Similar cases have accumulated since the spring. In May, Sony customers sued the console maker in federal court in California, alleging what the complaint called a “double recovery windfall” from raising console prices to cover tariff costs while also collecting refunds on the same duties. Sony reported a 37 percent year over year increase in operating income last week, driven substantially by 80 billion yen, roughly 507.7 million dollars, in tariff refunds. Sony did not immediately respond to a request for comment on whether it intends to return any portion to customers.
Nintendo has taken the most explicit position. Responding to a class action filed in April over price increases on the Switch 2 console, the company argued in a motion last month that it would not pass refunds to purchasers because the money they paid “represents the purchase price of the goods they wanted and received.” That framing, that a price is a price regardless of what drove it, is the central legal defense available to defendants in this wave of cases, and its reception in the courts will determine how far the litigation runs.
Amazon has taken the opposite approach. The company received roughly 600 million dollars in tariff refunds, and Chief Financial Officer Brian Olsavsky said last week that it would automatically issue reimbursements to consumers under a “limited set of circumstances.” Olsavsky added that “in cases where we did see an increase in costs due to tariffs, we largely absorbed those costs rather than pass them on to customers.” Amazon nonetheless faces a class action of its own, filed in May, in which plaintiffs argued the company had declined to pursue refunds in order to curry favor with the administration. FedEx and UPS both pledged in April to return tariff money collected from customers.
Other large recoveries reported to date include roughly 300 million dollars at Nike, roughly 500 million dollars at General Motors, and nearly 2.2 billion dollars at Apple in the second quarter of 2026.
The secondary market and the supplier squeeze
Two commercial developments have followed the refund wave, and both are worth watching because they change who ultimately holds the money.
The first is a market in refund receivables. Retailers under cash pressure have begun selling the rights to potential refunds to third parties at a discount, converting an uncertain future claim into immediate liquidity. For a company with a stretched balance sheet the trade is rational. For the buyer it is a bet on the pace and completeness of the government’s processing, and on the outcome of the pending appeal of the Court of International Trade’s refund order. The existence of this market means that some portion of the remaining entitlement will be realized by financial intermediaries rather than by the importers who paid the duty, and that a consumer class action against a retailer may find that the retailer no longer holds the asset the plaintiffs are pursuing.
The second is renegotiation up the supply chain. O’Reilly Automotive has disclosed that it is sharing tariff refund benefits with its suppliers, an arrangement that reflects the reality that the importer of record designation often does not track who economically bore the duty. In many import relationships the nominal importer is a distributor or a logistics provider, while the cost was absorbed by a manufacturer upstream or a retailer downstream through contractual duty pass-through provisions. Where those contracts are silent on what happens if a duty is later refunded, and most of them are, the parties are negotiating from scratch.
A refund cycle inside a live dispute
The refund program is unwinding one tariff regime while a successor regime is being challenged on strikingly similar grounds, and the two processes are now feeding each other.
On Monday, August 3, a coalition of 25 states filed suit in the Court of International Trade against the Section 301 forced labor tariffs that replaced the expired Section 122 duties on July 24. The complaint, filed against the President, United States Trade Representative Jamieson Greer, Customs Commissioner Rodney Scott and their offices, argues that the tariffs were imposed under the “guise of combating forced labor in global trade” and asks the court to declare them unlawful and order refunds to the states.
“The Tariff Action is arbitrary, capricious, and contrary to law,” the complaint says, adding that “the Administration cannot use forced labor as a pretext to continue its illegal tariff scheme.” The states argue that the Trade Representative set rates of 10 or 12.5 percent across 60 trading partners without linking those rates to the actual prevalence of forced labor in each economy, did not respond to comments and testimony that undercut the rationale, offered no mechanism by which an accused economy could escape the duties through remedial action, and maintained an effective 10 percent floor even for countries it credited with taking steps against forced labor. “In short, there is no rational fit between the purported problem of forced labor in international supply chains and the blanket global tariffs the USTR imposed,” the suit says.
The states were not first. On July 24, the day the tariffs took effect, spice importer Burlap and Barrel and watch retailer Collective Horology filed the initial challenge in the same court, seeking removal of the duties and refunds. Their theory tracks the states’ closely: that the administration did not satisfy the statutory requirements of Section 301 and used the provision as a backdoor route to reinstate duties the Supreme Court had removed.
For importers, the practical implication is uncomfortable. Duties currently being paid under Section 301 may themselves become the subject of a refund program in 2027 or 2028, on the same terms and with the same importer of record limitation that is generating litigation today. Companies that spent 2026 learning how the refund system works have an incentive to apply those lessons prospectively: designating importer of record status deliberately, documenting who bears duty cost in supply contracts, and writing refund allocation provisions into agreements before the question becomes contested.
What this means for importers now
For companies still holding claims, the operational checklist is short and time sensitive.
Confirm importer of record status across all affected entries. This is the single determinative fact for refund eligibility, and it is frequently misunderstood in arrangements where a customs broker, freight forwarder or related party appears on the entry documents. Companies that discover they were not the importer of record on entries where they bore the cost have a commercial claim against their counterparty, not a refund claim against the government.
Verify that Automated Clearing House refund accounts are correctly configured with Customs. Refunds cannot be disbursed to an account the agency cannot reach, and a misconfigured account is an avoidable delay on money already approved.
File protests where liquidation has occurred and the automated route is uncertain. The 180 day window from liquidation is unforgiving, and a protest preserves rights while the appeal of the refund order proceeds. The cost of filing is low relative to the value at stake on any material entry.
Track liquidation dates as a standing control rather than a one-time exercise. The liquidation date determines which recovery mechanism is available, and entries liquidate on a rolling basis without notice to the importer beyond the bulletin notice.
For companies that have already received refunds, the calculus is different and the risk is reputational and legal rather than procedural. The class actions now pending turn on whether a company raised prices in response to the tariffs, whether it has recovered the duty, and what it has said publicly about both. Companies should expect that pricing announcements made in 2025 attributing increases to tariffs will be read back to them. Abercrombie and Fitch, Walmart and Nike each announced tariff-attributed price increases over the past year, and such announcements are precisely the evidence plaintiffs’ counsel is assembling.
There is a defensible middle path, and several companies have taken it: acknowledge the refund, explain what portion of the original cost was absorbed rather than passed through, and where a pass-through is documented, offer a remedy. That approach carries a cost. It also removes the strongest element of the plaintiffs’ narrative, which is not that a company profited but that it declined to say anything at all.
The fiscal side of the ledger
The refund wave is also a fiscal event, and its scale has been partly obscured by the speed with which the administration replaced the invalidated duties with new ones.
Returning 166 billion dollars of collected revenue would, in isolation, represent a significant hit to receipts. In practice the hit has been cushioned. The Section 122 global tariff filled the gap from February until its statutory expiry on July 24, and the Section 301 forced labor action took over the same day at rates of 10 percent standard and 12.5 percent for a list of economies the Trade Representative singled out. Estimates circulated when that action was finalized put its revenue yield at roughly 581 billion dollars over the 2026 to 2036 window, a figure that assumes the measure survives the litigation now pending against it.
Treasury Secretary Bessent said on the day of the February ruling that tariff revenue would be virtually unchanged in 2026 despite the decision, and that prediction has broadly held. The composition of the revenue changed. The aggregate did not fall as much as the headline invalidation implied.
For importers, the fiscal continuity is the point that most often gets missed in coverage of the refunds. Receiving a refund for duties paid in 2025 does not reduce the duty being paid in 2026. Several companies have reported refund-driven earnings improvements in recent quarters while simultaneously facing higher current-period duty expense, a combination that flatters the income statement in one line and pressures it in another. Analysts assessing tariff exposure from reported results should treat the refund as a nonrecurring item rather than as evidence that trade costs have eased.
The unresolved question
The refund process is, in a narrow sense, working. Money that a court held was unlawfully collected is being returned at a pace that would have seemed implausible six months ago. In a broader sense it is exposing a structural mismatch that trade law has never had to resolve at this scale. Customs duties are collected from importers as a matter of administrative convenience, but they are designed to change behavior throughout a supply chain, and their economic incidence lands wherever market power allows it to land. When the duty is invalidated, the law knows how to find the importer. It has no mechanism at all for finding the person who actually paid.
That gap is now being litigated in a dozen district courts by plaintiffs with a plausible grievance and no obvious remedy. How those cases resolve will shape not just the disposition of the remaining 66 billion dollars, but the calculation every importer makes the next time a tariff of contested legality takes effect.