What would it mean to actually refund the tariffs?

Summary

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Episode Overview

Title: What Would It Mean to Actually Refund the Tariffs?
Podcast: The Indicator from Planet Money (NPR)
Date: December 2, 2025
Hosts: Darren Woods & Steven Besaha
Featured Guest: Ted Murphy, Partner, Sidley Austin

This episode dives into the billions collected by the U.S. government via tariffs—especially those levied during the Trump administration—and explores the legal, economic, and practical questions raised by the Supreme Court potentially declaring some of these tariffs illegal. The hosts and guest Ted Murphy break down: Who would be entitled to refunds? How might the refund process work? And what are the real-world implications for companies and consumers?

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Key Discussion Points & Insights

1. The Tariff Windfall and Political Proposals

• Large Sums at Stake: Nearly $200 billion was collected in tariffs in the past fiscal year.
• Proposed Uses:
  • Fiscally Responsible Option: Use the money to pay down the U.S. national debt.
  • Flashy Alternative: Distribute the money directly to Americans as checks, potentially up to $2,000 each, as advocated by President Trump.
  • Trump's Position: Endorses both approaches. (01:29)

Quote:

"Tariffs are burning a hole in the U.S. treasury's pocket. They brought in nearly $200 billion this past fiscal year..."
— Steven Besaha (01:14)

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2. The Supreme Court Case: Who Gets the Money Back?

• Key Legal Question: Whether Trump's expansive use of emergency powers to levy tariffs was overreaching, possibly making the tariffs illegal.
• If struck down, the U.S. government might be required to refund billions. (01:54)
• Host Clarification: Most Americans wouldn't benefit directly; refunds would go to whoever actually paid the tariff.

Quote:

"There's a good chance the US Government will have to give a lot of it back."
— Darren Woods (01:43)

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3. Who Paid the Tariffs and Who Would Get Refunds?

• Technical Payer: The “importer of record”—usually a U.S. wholesaler, big retailers like Home Depot or Walmart, or logistics firms.
• Economic Cost: Ultimately borne by consumers in the form of higher prices, but legally, refunds go to importers—not end customers.
• Refund Mechanism: Not automatic. Importers would need to make proactive claims. (05:49)

Quote:

"Who pays the tariff? The technical answer is the importer of record. ...You can get into a larger question of like, who bears the economic cost of that tariff, which is a slightly different question."
— Ted Murphy (05:00)

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4. How Would Refunds Actually Happen?

• Possible Automatic Refunds: If importers have overpaid on filing, the existing customs system could refund them, but only for tariffs in open review windows (approx. 10 months). (06:09)
• Likely Need for Claims: Importers would likely need to file protests to claim money, a process familiar within customs law, not new but not instantaneous. (07:11)
• Legal Precedents: The process for protesting customs decisions is well established, which gives importers optimism for timely refunds after a decision. (07:32)

Quote:

"You would be optimistic that post-decision you would be weeks away from getting a refund, not months away."
— Ted Murphy (07:40)

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5. Practical Barriers and Advice for Importers

• Potential Obstacles: The government may not make it easy—importers could be required to provide significant documentation.
• Record-Keeping: Importers need to have detailed records at the ready to prove amounts paid if challenging for a refund. (08:27)
• Advice: Don’t just wait passively; act now to be at the front of the future "refund line."

Quote:

"It's certainly possible the government doesn't make obtaining a refund easy. They might make it onerous. ...You want to make sure you have your records."
— Ted Murphy (08:27)

"No one should be sitting back really waiting for checks to roll in. ...We need to stay on top of it and make sure that that happens."
— Ted Murphy (09:02)

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6. Political and Fiscal Considerations

• Refunds vs. "Tariff Rebate Checks": If political proposals for distributing direct cash to Americans (like COVID relief) proceed, it wouldn't technically reduce available funds for importers’ refunds; payments would come from general government funds, not a ring-fenced pool. (08:07)
• Consumers: Unlikely to benefit from corporate refunds, as lowered costs from unwound tariffs probably won't be passed back down in the form of lower prices. (09:25)

Quote:

"Companies may have passed along some of those tariff prices already, but I wouldn’t bet on them passing along those checks."
— Darren Woods (09:29)

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Notable Quotes & Memorable Moments

• Ted Murphy describing the situation for importers:

  "It's crazy. It's crazy and it's been crazy since actually before November last year." (03:36)

• On the uncertainty facing legal advisors:

  "Remember, we are in new territory here with tariffs both legally and in scale."
  — Steven Besaha (07:02)

• On practical advice for importers:

  "The best way to do it is to try to make you or an importer prove how much you paid. So you want to make sure you have your records."
  — Ted Murphy (08:27)

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Important Segment Timestamps

• 01:14–01:55: Overview of tariff revenue and Trump administration options
• 03:21–04:18: Introduction of Ted Murphy and legal climate for importers
• 05:00–05:27: Technical explanation of who paid tariffs and who gets refunds
• 06:09–07:02: Details on refund processes and historical context
• 08:27–09:02: Advice for importers and record-keeping requirements
• 09:15–09:37: Discussion on likely winners and losers (importers, government, consumers)

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Conclusion

This episode demystifies what a "tariff refund" would actually mean in practice. The takeaway for listeners: Even if the Supreme Court overturns the Trump tariffs, benefits will mainly accrue to large companies, not end consumers. Importers anxiously awaiting refunds should prepare now, not wait passively, and ensure all documentation is at their fingertips. The conversation underscores how legal nuances and government processes loom large over headline-grabbing sums—and how economic reality diverges from political spin.

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Transcript

[A]

Hey there, it's Steven Besaha with a quick message on this Giving Tuesday. We want to shout out an indicator listener and recent NPR donor Christine from California. Christine says she loves Planet Money in the indicator and writes the content is so creative, honest and reliable. Christine, you are going to make us blush. Thank you so much and anyone else who's donated this year. It really means a lot, especially because as of October 1st, NPR is operating without federal funding. It is a big challenge, but one we can take on together. We know you value the indicator and our bite sized episodes explaining what's going on with the economy, jobs, housing, tech and so much more. So please help us keep it going. Make your Giving Tuesday gift by signing up for npr. It's a simple recurring donation that gets you perks to over 25 of NPR's podcasts. Just head to plus.npr.org thanks again. And now onto the show, NPR.

[B]

This is the Indicator from Planet Money. I'm Darren Woods.

[A]

And I'm Stephen Messaha. Tariffs are burning a hole in the U.S. treasury's pocket. They brought in nearly $200 billion this past fiscal year, which wrapped up in Sept. And the Trump administration has put out different ideas for what to do with all that money.

[B]

There is the boring fiscally responsible answer, helping pay down the national debt and the flashy option checks for Americans as much as $2,000 maybe signed by a certain president.

[A]

Trump says let's do both.

[B]

But there is a problem with any plan to spend that tariff cash. There's a good chance the US Government will have to give a lot of it back back.

[A]

That is because of a case in front of the Supreme Court. As you probably know, it's considering declaring several of Trump's tariffs illegal, which would mean returning billions of dollars.

[B]

Today on the show, we look at who would get the money and why it might not be so easy for them to get it.

[C]

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[B]

If you're an American importer this year, you've probably been spending a lot of time emailing your lawyer. And that lawyer might just be Ted Murphy. Ted is a partner with the global law firm Sidley Austin.

[A]

What's your inbox been looking like lately?

[D]

It's crazy. It's crazy and it's been crazy since actually before November last year. Since before the election, but certainly since then it's only gotten crazier.

[A]

What's the main question people are asking right now?

[D]

Really? The main question is where is this going?

[B]

That is a question I think we all have with terrorists.

[A]

Yeah, it is a good question. But you know, lately the questions in Ted's inbox have been a little more optimistic.

[D]

There are a lot of optimistic clients. Based on the Supreme Court's oral argument, I'd be very curious as to what the Supreme Court's numbers were on listening to that oral argument. I'm sure it was pretty well attended.

[A]

Quick recap here. Historically, it's been Congress, not the president, setting tariffs. To get around that, Trump has been relying on a really broad view of an emergency powers law. The justices are deciding whether that's too broad and gives the president too much power. And if they do, that could be the end of Trump's favorite tariff tool.

[B]

It could also mean returning all the money collected using those emergency powers. But temper your expectations for a cheque here. You probably won't get a refund for that imported bidet or ironing board you ordered off Amazon. The money will go back to the person who paid for the tariff.

[D]

Which raises the question, who pays the tariff? The technical answer is the importer of record. Right. The party that is importing the products into the United States more often than not, that's a U.S. company. Now you can get into a larger question of like who bears the economic cost of that tariff, which is a slightly different question.

[A]

Yeah, the cost of that ironing board was probably passed down to the consumer through higher prices. But it's the importer who would get that refund, which often isn't the customers themselves.

[B]

The importer of record is often the actual company doing the buying, like Home Depot or Walmart or a middleman company handling all the logistics.

[A]

So if I'm an importer and I see, wake up one day the Supreme Court has gotten rid of the reciprocal tariffs. Do I just sit back and be like, okay, that money's gonna show back up in my bank account or do I need to do something about it?

[D]

Yeah, I would recommend against sitting back and just waiting for the refund check to roll in. I am willing to say with some certainty it will not be an automatic refund process to anyone who paid the tariffs.

[B]

Now there are some goods Ted believes could get an automatic refund under the system we have now.

[A]

When an importer brings in that ironing board, it's up to them to estimate what taxes and fees they owe if they choose to. Customs has the option to review that amount. Has about a 10 month window to do that. If the agency says the importer paid too little, they get a bill too much, they get a refund.

[B]

Ted says this same easy automatic process already in place could be used for.

[D]

Tariffs, which means the importer of record of your ironing board should get a check.

[A]

Cool. In that case, I can sit back and just wait for that to show up my bank account.

[D]

If you were the importer. Yeah, if you were the importer of record. I mean, again, that's what I think should happen now, whether, whether the government agrees that that's what they'll do. You know, we'll have to see.

[A]

What level of confidence do you have in that?

[D]

Yeah, I don't know. I'm not sure I would say it's overwhelming.

[A]

Remember, we are in new territory here with tariffs both legally and in scale. So lawyers like Ted are giving best guidance based on the limited precedents.

[B]

If the government doesn't send out those refunds, importers have a backup option, and it's one they've always had. When they disagree with how much Customs says they owe, the importers can file a protest.

[A]

And Ted says here there is precedent. Protests happened well before the new tariff era, which is a good thing for importers wanting their money back.

[D]

You're in a very established sort of process. Right. Customs is doing that every week and has been for, you know, decades and decades, so. So you would be optimistic that post decision you would be weeks away from getting a refund, not months away.

[A]

There is one thing that could complicate all of this and that is President Trump has talked about tariff rebate checks for Americans. So if those goes go out, would that make getting refunds to importers much harder because the money is gone?

[D]

I don't think so. It's just, it's like the COVID checks. It's just coming out of general funds, I guess.

[A]

Yeah, there's not a dollar that's signed that said for tariffs and then that's the one that's getting sent back to people.

[D]

Yeah, that's not exactly any last advice.

[A]

For those optimistic importers in your inbox.

[D]

It's certainly possible the government doesn't make obtaining a refund easy. They might make it onerous. And the best way to do it is to try to make you or an importer prove how much you paid. So you want to make sure you have your records.

[B]

There's a government website importers can get that data from, but who knows how that website will do when there's a flood of importers all wanting their money back. Ted says importers should be proactive now so their at the front of that potential refund line, not at the back.

[D]

No one should be sitting back really waiting for checks to roll in. Like it's just not. That is not the world. I mean we live in. We need to stay on top of it and make sure that that happens.

[A]

Assuming those importers get that money back, it would be a big win for them, just not a big win for the paying off of the country's $38 trillion national debt.

[B]

And it probably won't really do much for consumers. Companies may have passed along some of those tariff prices already, but I wouldn't bet on them passing along those checks.

[A]

This episode was produced by Cooper Katz McKim and engineered by Kwesi Lee. It was fact checked by Sierra Juarez Cake and Cannon is our editor. The Indicator is a production of npr. Hey there indicator listener. Thanks for listening to the show. We hope you learned something. If you could leave a review and your thoughts, it could be on today's episode, our show, or maybe how the thing you learned made you the star of your Thanksgiving dinner. These reviews help other like minded folks find us and help us tell more economic stories that you know and love.

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