By David Lawder
WASHINGTON, Feb 20 (Reuters) – More than $175 billion in U.S. tariff collections are at risk of having to be refunded if the U.S. Supreme Court rules against President Donald Trump’s broad emergency tariffs, Penn-Wharton Budget Model economists said on Friday.
Their estimate, produced at a request from Reuters, was derived from a ground-up forecasting model that uses tariff rates by product and country for specific duties imposed by Trump, including those under the International Emergency Economic Powers Act (IEEPA), said Lysle Boller, senior economist for Penn-Wharton Budget Model (PWBM), a non-partisan fiscal research group at the University of Pennsylvania.
The U.S. Supreme Court could rule on the legality of the IEEPA-based tariffs as early as Friday. If they are struck down, importers are expected to scramble for refunds from the U.S. Customs and Border Protection agency on import duties paid over the past year.
Trump has touted the revenue generated by all of his tariffs, estimated by the Congressional Budget Office at about $300 billion annually over the next decade, but the estimates show that a substantial amount may need to be refunded if the court rules against Trump.
Refunds of $175 billion would exceed the combined fiscal 2025 outlays from the Department of Transportation at $127.6 billion and the Department of Justice at $44.9 billion.
ALTERNATIVE CALCULATIONS
Boller said the PWBM model, built for long-term revenue forecasts, cross-references U.S. Census Bureau import data on around 11,000 product import categories based on eight-digit tariff codes across 233 countries, and applies statistical forecasting methods to come up with about $500 million in IEEPA-based revenue collected daily. As of Thursday, that model estimated $179 billion in total receipts under IEEPA since Trump began imposing tariffs under that law in February 2025.
PWBM also extrapolated past CBP IEEPA customs duty assessment data as a share of continuing U.S. Treasury customs receipts and came up with a similar estimate of $175 billion to $176 billion, he added.
CBP last published its customs assessments under IEEPA-based tariffs and other trade remedy duties on December 14, at that time showing an at-risk total of $133.5 billion since the first duties under the law were imposed. Net duty collections are typically slightly lower because the tariff assessments are subject to adjustments and corrections that result in refunds.
The PWBM model also makes quick adjustments for sometimes-abrupt tariff changes by Trump, including from trade deals that cut import duty rates for goods from certain countries. South Korea, for example, saw its U.S. tariff rate drop to 15% from 25% in November.
It also has captured changes in punitive duties under IEEPA, such as the imposition last August of a 40% tariff to punish Brazil over the prosecution of Trump ally and former President Jair Bolsonaro, and the removal of duties on Brazilian coffee, beef and cocoa in November.
U.S. Treasury Secretary Scott Bessent told Reuters in January that the Treasury can easily cover any tariff refunds, though he is confident that the Supreme Court will uphold the IEEPA tariffs. The Treasury is continuing to plan for large cash balances in its borrowing plans, $850 billion at the end of March and $900 billion at the end of June.
The Treasury has been reporting large gains in customs receipts in recent months, up roughly $20 billion a month from prior-year periods before Trump imposed the duties, with about $27.7 billion in total customs receipts in January. Trump administration officials say they will switch to alternative tariff authorities to restore tariffs if the court declares IEEPA tariffs illegal.
(Reporting by David Lawder; Editing by Stephen Coates)
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