Trump forced to refund billions in tariffs – The Latest

Summary

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Today in Focus – The Latest:

"Trump forced to refund billions in tariffs"
Date: July 14, 2026
Host: Lucy Hoff
Guest: Chris Michael, International Editor, Guardian US

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Episode Overview

This episode unpacks the monumental turnaround in Donald Trump's trade policy — following a Supreme Court decision ruling his emergency-imposed tariffs illegal, the US government has been forced to refund a staggering $81 billion collected in tariffs. Host Lucy Hoff and international editor Chris Michael delve into what changed, who is impacted, and the fallout for Trump, the US economy, and November's pivotal midterms.

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Key Discussion Points & Insights

1. The Supreme Court Ruling: Turning Tariffs Upside Down

• Supreme Court Decision (Feb 2026): Ruled Trump's emergency-imposed tariffs illegal, stripping the president of unilateral power to levy tariffs or taxes, a right reserved for Congress.
• Chris Michael:

  "The Supreme Court said, no, you don't have those powers. You aren't allowed to just unilaterally impose taxes, which is what they said it was. The president doesn't have the authority to impose taxes. Only Congress does." (03:07)

• Immediate consequence: The US government must refund tariffs collected under those emergency declarations.

2. The Scale and Recipients of Refunds

• Total Refunds: $81 billion in the past year.

• Who gets refunded: US companies hit by the tariffs (even individuals, theoretically, but mainly big importers).

  "Famously, Trump was sort of portraying the tariffs as punishing other countries, but it's US Companies that have to pay them, and it's US Consumers that end up eating the cost of that." (04:38)

• Secondary Market Emerges:

  “Some companies have been set up on Wall Street to sort of collect the tariffs on behalf of large groups. And there's another big group, people that will be benefiting, which is the people who bought into a sort of secondary market for tariff refunds before the Supreme Court decision, and they were buying up these tariff refunds at, like, sort of 10 cents on the dollar, hoping to make a buck in the future.” (05:12)

3. Tariffs as Trump’s ‘Cudgel’

• Trump’s Perspective:

  “His favourite word, the most beautiful word in the dictionary as far as he is concerned, is tariff.” (01:46, Lucy Hoff)

• Motivations: Trump positioned tariffs to:

  • Bring manufacturing back to the US and address the trade deficit.
  • Project “America First” strength geopolitically — using tariffs as a “cudgel” to browbeat other countries.

  “It started with the country of Colombia right after he got elected… he threatened tariffs on them. They immediately backed down, and he decided… oh, I can use it on everybody all around the world.” (06:36, Chris Michael)

• But:

  “US Manufacturing, however, did not recover. It is in a profound slump and continues to be. So in that sense, it really didn't work at all.” (06:19)

• Lucy Hoff’s memorable joke:

  “…there were also two uninhabited islands inhabited mainly by penguins who also had some pretty harsh tariffs imposed on them, which feels unfair considering their probably negligible contribution to the global economy.” (04:13)

4. The 10% Blanket Tariff & Legal Limits

• Surviving Tariff:

  • A 10% cap on tariffs remains, enabled not by executive emergency but under Section 122 of the 1974 Trade Act.
  • It can only last 6 months and is due to expire soon.

• Potential Extension:

  “Now the administration say that they're going to try to extend it. They're accusing other countries of not enforcing labor laws… but certainly it's a, you know, a useful fiction for them potentially.” (07:59)

• On Trump’s Continued Threats:

  “Trump continues to sort of threaten these other tariffs… last week he was saying he was going to institute 100% tariffs on Europe. I mean, it's ludicrous. He doesn't have that power. Everyone knows it.” (08:15)

5. Political & Economic Fallout

• Direct Consumer Impacts:

  • The tariffs raised costs for both companies and consumers, feeding inflation and cost of living issues.
  • Both Republicans and Democrats strongly feel the tariffs hit their wallets.

  “Both Republicans and Democrats, about 2/3 of both groups feel that Trump, Trump's tariffs have cost them more money quite directly.” (09:49)

• Fed Warning:

  “The Fed said that a lot of companies have yet to price in some of the worst impacts of the tariffs and so their prices are going to continue to rise.” (10:13)

• Political Repercussions:

  • The economy, especially living costs, is top of mind in the November midterms.
  • Inflation was key in Joe Biden’s political struggles; the same dynamic may now haunt Trump.

  “This is bad news for American consumers and it's bad news for Trump politically because of course, people don't, you know, famously high prices and inflation did for Joe Biden. And, you know, Trump is now sort of facing the same thing.” (10:27)

• Ironic Upshot:

  “In a sense, you could kind of say that the Supreme Court's ruling back in February has protected Trump a little bit by, by keeping prices from rising so crazily… they've protected him from his own worst impulses.” (10:45)

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Notable Quotes & Memorable Moments

• On Refunds:

  “Yeah, one wonders if refund is his second favorite word. I imagine not.” (02:31, Chris Michael)

• On Penguin Tariffs:

  “…two uninhabited islands inhabited mainly by penguins who also had some pretty harsh tariffs imposed on them, which feels unfair…” (04:13, Lucy Hoff)

• On Trump Threats:

  “Everyone in the EU just went, yeah, you know, bring it on, buddy.” (08:24, Chris Michael)

• On Supreme Court Irony:

  “…they've protected him from his own worst impulses.” (10:45, Chris Michael)

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Timestamps for Important Segments

• [01:46] Main issue: Trump’s tariff policy collapses under Supreme Court ruling
• [03:07] Supreme Court rationale: President doesn’t have power to levy taxes
• [04:13] Who gets refunds: companies, individuals, and Wall Street
• [05:39] Purpose and real-world effect of tariffs
• [07:29] The last legal 10% tariff and looming expiry
• [09:45] Political and economic disaster for Trump as prices and inflation hit all Americans
• [10:45] Supreme Court decision potentially protects Trump from himself

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Tone and Language

• Conversational yet incisive, with a dash of humor (“penguin tariffs”, “refund is his second favorite word”).
• Chris Michael delivers a mix of analytical depth and wit.
• Lucy Hoff guides the discussion with clarity, occasional dry asides, and sharp questions.

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Summary

In ten brisk, insightful minutes, this episode demystifies the unprecedented refund of billions in Trump-era tariffs, placing it in political, legal, and economic context. The Supreme Court’s intervention has not only reshaped trade policy but left Trump, already embattled by inflation and voter skepticism, confronting the fallout of strategies that hurt US consumers more than the nations he sought to punish. Listeners learn how political wrangling, legal checks, and lived economic costs collide at the heart of today’s US trade debate.

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Transcript

[Lucy Hoff]

This is the Guardian.

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[Chris Michael]

It is a huge problem for Trump. He does look sort of weak at the moment. Republicans and Democrats feel that Trump's tariffs have cost them more money. And Trump continues to sort of threaten these other tariffs. It's ludicrous. He doesn't have that power. The reason he thinks tariffs is such a beautiful word is that it was a cudgel that he could use to browbeat other countries into doing what he wants, but the Supreme Court told him he actually can't.

[Lucy Hoff]

From the Guardians today. In Focus, this is the latest. With me, Lucy Half. So Donald Trump has often said that his favourite word, the most beautiful word in the dictionary as far as he is concerned, is tap tariff. I wonder if that's something that he is reflecting on somewhat this week, given that the US has paid $81 billion in tariff refunds in the last year. Chris. Michael, you are our international editor for Guardian US people will remember April 2025 when Trump held up that laminated board of tariffs. What's changed since then? That means these refunds have had to be paid out.

[Chris Michael]

Yeah, one wonders if refund is his second favorite word. I imagine not.

[Lucy Hoff]

Yeah, I think it's safe to say probably not.

[Chris Michael]

What's changed is an incredible Supreme Court ruling in February of this year which said that Trump's tariffs were illegal. Trump, you may recall, declared an emergency, a national emergency. He said our trade deficits with other countries, you know, China, but, but many other places are ludicrously. High. And instead of trying to address, you know, the root causes of that, he just said, we're just going to slap tariffs on, on other countries to, to address this national emergency. He's done it with other things as well. He loves declaring emergencies in order to kind of try to get powers that he really doesn't have. But the Supreme Court said, no, you don't have those powers. You aren't allowed to just unilaterally impose taxes, which is what they said it was. You know, the president doesn't have the authority to impose taxes. Only Congress does.

[Lucy Hoff]

A word that Donald Trump does not like we should say.

[Chris Michael]

Right, absolutely. And, and so, yeah, it was, it was a huge blow to Trump. He said, I'm going to fight back. I'm going to, you know, we'll get the tariffs in through other means. And he has instituted some other ones. But by and large, the ruling stood and Trump and the, you know, the US Government had to repay these sort of massive tariffs that they collected. And, yeah, that's what they've been doing.

[Lucy Hoff]

Yeah. So on that list, that laminated list, was a list of nations. So, you know, China had in excess of 60% tariffs. Vietnam had an extraordinary 90%. But there were also two uninhabited islands inhabited mainly by penguins who also had some pretty harsh tariffs imposed on them, which feels unfair considering their probably negligible contribution to the global economy. But. But it's not actually nations who are suing because it's a series of lawsuits. Right. It's companies who've been impacted by these tariffs. Who are they?

[Chris Michael]

You know, any company really, that, that, that imports. Famously, Trump was sort of portraying the tariffs as punishing other countries, but it's US Companies that have to pay them, and it's US Consumers that end up eating the cost of that. So that's exactly who have been collecting them. And, you know, so it's big companies as well as individuals. You know, if you had to cross a border and, you know, you had to pay customs duty, you know, for one of these places where there was a tariff, you are eligible, in theory, for a refund. A lot of people obviously won't be claiming those small amounts back, but. And some companies have been set up on Wall street to sort of collect the tariffs, you know, on behalf of large groups. A bit like a class action, okay, suit. And there's another big group, people that will be benefiting, which is the people who bought into a sort of secondary market for tariff refunds before the Supreme Court decision, and they were buying up these tariff Refunds at, like, sort of 10 cents on the dollar, hoping to make a buck in the future.

[Lucy Hoff]

I mean, you touched on it in your first answer, but what was the sort of point of the tariffs in the first instance? Because it was both about a kind of geopolitical sign of strength, but it was also about this trade deficit that Trump was very concerned about. But I think we can safely say they have been ineffective if that was their tool. And that's largely because it feels like he didn't think them through in terms of their impact on American companies.

[Chris Michael]

Yeah, I mean, the sort of, you know, the argument that he gave was he wanted to bring manufacturing back to the US he wanted to address the trade deficit. You know, there's a rational argument for that. Whether or not you think tariffs is the right way of doing it, who knows? US Manufacturing, however, did not recover. It is in a profound slump and continues to be. So in that sense, it really didn't work at all. But it was central to Trump's economic message. This America, first thing, you know, who cares about the rest of the world? We just want to make T shirts back in the US So that was kind of one element of it, but then the other big part of it, as you say, was the geopolitics of it. The reason he thinks tariffs is such a beautiful word is that it was a kind of cudgel that he could use to browbeat other countries into doing what he wants. It started with the country of Colombia right after he got elected. You know, he threatened tariffs on them. They immediately backed down, and he decided, oh, you know, this is great. I can use it on everybody all around the world, much in the same way as, you know, when he went into Venezuela and took out the. The leader of the country, and now they sort of run Venezuela as a vassal state. He thought, oh, I can apply that lesson elsewhere. And he tried to do that in Iran, and it. And it didn't work. But he has this kind of. Yeah, he sort of thinks, oh, great. Like, you know, this one thing works, and now I can just bully the rest of the world with it. But the Supreme Court told him he actually can't.

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[Lucy Hoff]

So there is this still 10% blanket tariff. Right. Why is that still in place? And is that something that the Supreme Court can look at?

[Chris Michael]

That's a. It seems to be a sort of legal tariff. It's under Section 1 to 2 of the 1974 Trade act, which you must

[Lucy Hoff]

have read in full.

[Chris Michael]

I have read it in full. Absolutely haven't. Trump had to fall back on that. It does set a maximum tariff of 10% and it's only for six months.

[Lucy Hoff]

Okay.

[Chris Michael]

So it actually expires in a week and a half. Now the administration say that they're going to try to extend it. They're accusing other countries of not enforcing labor laws. You know, I don't want to say that's completely made up, but certainly it's a, you know, a useful fiction for them potentially. And so they will try to get it extended. But, you know, 10% is, is nowhere near as damaging. As you noted, some, you know, 90% tariffs in other places. And Trump continues to sort of threaten these other tariffs. You know, last week he was saying he was going to institute 100% tariffs on Europe. I mean, it's ludicrous. He doesn't have that power. Everyone knows it. Yeah, you know, everyone in, in the EU just went, yeah, you know, bring it on, buddy. And so, you know, he does look sort of weak at the moment with this.

[Lucy Hoff]

Well, particularly in light of the Supreme Court ruling in February of this year and particularly given the formation of the Supreme Court at the moment, which is padded out with Trump aligned people. So it's very significant. So we know that the economy is absolutely up there in terms of the top issues for American voters. We have the very crucial November midterms. We've had the economic from the tariffs which have hit American consumers hard. And you know, there are reports that people feel that they are directly responsible for an increase in the cost of living. We have also this year had the impact of the Iran war, the impact that that's had on consumers. So how do we know that Americans are feeling about that? And as someone that's right across what's being reported in America, I wonder how this is being reported in sort of traditionally Trump aligned publications.

[Chris Michael]

Well, interesting thing, you know, about the impact on energy prices and on costs is that it is a bipartisan issue. You know, both Republicans and Democrats, about 2/3 of both groups feel that Trump, Trump's tariffs have cost them more money quite directly. And you know, the price of the pump affects everybody and is a kind of, in that sense a sort of a, a wedge issue. So, you know, it is a huge problem for Trump. Also just last week the Fed said that a lot of companies have yet to price in some of the worst impacts of the tariffs and so their prices are going to continue to rise.

[Lucy Hoff]

Great.

[Chris Michael]

So this is bad news for American consumers and it's bad news for Trump politically because of course, people don't, you know, famously high prices and inflation did for Joe Biden. And, you know, Trump is now sort of facing the same thing. So in a sense, you know, you could kind of say that the Supreme Court's ruling back in February has protected Trump a little bit by, by keeping prices from rising so crazily. And in a sense, they've sort of, they've protected him from his own worst impulses.

[Lucy Hoff]

Yeah. Gosh, what a thought. Chris, thank you so much.

[Chris Michael]

Thank you.

[Lucy Hoff]

That's it for today. My huge thanks again to Chris Michael, the international editor for Guardian us. You can keep up with all our reporting on this story [e-mail] and I really recommend today's episode of our sister podcast, Science Weekly, which is asking the question, could hidden fungal networks be key to the earth's survival? Thanks for listening to this episode of the latest Today in Focus will be back in your feed as usual tomorrow morning. The latest will be back tomorrow night. This episode was presented by me, Lucy Hoff. It was produced by Angus Neil and Sam Gruway. The executive producer was Zoe Hitch.

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[Lucy Hoff]

you get your podcast, this is the Guardian.

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