Photograph by Nathaniel St. Clair
The Trump administration collected $166 billion in tariff payments before the Supreme Court struck them down. Refunds have already started hitting the bank accounts of U.S. importers — and more could be owed soon.
As more than 300,000 companies scramble to get their money back, one large group is getting stiffed: American consumers.
After President Trump imposed sweeping, indiscriminate tariffs on so-called “Liberation Day” last year, companies moved swiftly to pass on their higher prices to consumers. Consumers, already facing an affordability crisis — and reporting historic dissatisfaction with the economy — paid those higher prices at the grocery store, hardware store, and clothing store.
Instead of focusing on strategic sectors where American manufacturers were being undercut or where we’re developing new technologies, Trump imposed tariffs seemingly on a whim — hitting inputs that drove up costs for manufacturers and goods (like bananas or coffee) that are not made in the mainland United States and never will be.
The results were as expected.
New data from the Federal Reserve found that businesses were able to pass through tariffs almost completely, raising core goods inflation by 3.1 percent. The Harvard Pricing Lab finds that retail prices for imported goods are up 5.4 percent compared to pre-Liberation Day trend.
Furthermore, the shock and confusion of the Liberation Day tariffs and dozens of subsequent adjustments allowed companies to take advantage of the pricing environment, raising prices even if they were not directly affected. Some even bragged about it on calls with their investors.
Unsurprisingly, consumers think this arraignment is unfair.
Polling from my organization, Groundwork Collaborative, found that 44 percent of Americans think refunds should go to consumers — and 34 percent believe that refunds should go to consumers and businesses.
Just 7 percent say that only businesses should get their money back. But that’s what’s happening.
Consumers won’t see a dime from the refunded tariffs — and in all likelihood they’ll keep paying for them. Prices, as retail experts like to say, are like “rockets and feathers.” When they go up, they go up quickly. But when costs fall, prices come down slowly — if they come down at all.
Big corporations that were able to pass through the price increases will now get a windfall, with no plans to pass on those savings. Costco made news by announcing they planned to use their sizable refund to lower prices, but almost no other corporations have followed their lead.
In addition to hurting consumers, the benefits of tariff refunds are unequally distributed between big and large corporations. Some 56 percent of small businesses reported that tariffs negatively impacted their operations, and many have shared difficulties and confusion with navigating the tariff refund portal.
Larger companies have used their size and market power to negotiate with suppliers and push costs onto consumers, but many small businesses had to pay whopping bills or risk going under. Some even sold the rights to their future refunds to Wall Street for pennies on the dollar to get cash up front to weather the storm, and now companies like Commerce Secretary Howard Lutnik’s old firm are profiting.
Families are hurting in this economy. They’re facing rising prices at the pump — up 50 percent because of Trump’s war in Iran — along with runaway utility bills and further uncertainty as Trump’s latest round of tariffs wind their way through the courts.
Meanwhile, the Trump administration hasn’t lifted a finger to ensure that corporations pass their savings through to consumers. In fact, Trump has even asked businesses not to claim the refunds at all, telling them he’ll “remember” companies that opt out.
With corporate profits at record highs, Congress should step in to ensure that consumers see some relief. Americans already paid these tariffs once — they shouldn’t have to pay again while corporations cash the checks.
