Senate Democrats Demand $175 Billion Tariff Refund as Supreme Court Nullifies Trump’s Tariff Powers

By Michael Katz | Monday, February 23, 2026

Senate Democrats unveiled legislation Monday that would require the Trump administration to refund billions in tariff revenue, capitalizing on a Supreme Court ruling that struck down President Donald Trump’s use of emergency powers to impose levies on many U.S. trading partners.

The Tariff Refund Act of 2026, sponsored by Sen. Ron Wyden (D-Ore.), Sen. Ed Markey (D-Mass.), and Sen. Jeanne Shaheen (D-N.H.), would mandate that U.S. Customs and Border Protection refund $175 billion in duties collected under the International Emergency Economic Powers Act, including interest, within six months.

White House spokesman Kush Desai stated: “Democrats spent decades talking about lopsided ‘free’ trade deals, reshoring middle-class manufacturing jobs, and lowering prescription drug prices. President Trump used tariffs to actually deliver where Democrats could only talk, so naturally Democrats are rolling up their sleeves to undermine President Trump and the American people — pathetic but unsurprising.”

The bill also includes a “sense of Congress” provision stating that importers, wholesalers, and larger businesses — particularly those that raised prices or passed on direct costs from unlawful duties during implementation — should pass refunds to customers, including small businesses and families impacted by those duties.

Sen. Shaheen, a member of the Senate Appropriations Committee, said in a news release: “President Trump’s reckless and chaotic tariffs have only caused uncertainty and pain — raising prices on consumers and businesses when they can least afford it. Now that the Supreme Court has made it clear the president did not have the authority to unilaterally impose sweeping emergency tariffs, it’s critical that American families and small businesses get the relief they need.”

The Supreme Court issued a 6-3 decision Friday holding that the 1977 law does not provide clear congressional authorization for broad global tariffs imposed under IEEPA. The ruling noted the tariffs were collected without sufficient statutory authority but did not explicitly order immediate refunds.

A University of Pennsylvania study estimated reversing these tariffs could generate up to $175 billion in refunds, while the Congressional Budget Office projects annual U.S. tariff revenue at approximately $300 billion over the next decade.

Sen. Wyden, ranking member of the Senate Finance Committee, stated: “Trump’s illegal tax scheme has already done lasting damage to American families, small businesses and manufacturers who have been hammered by wave after wave of new Trump tariffs.”

Wyden added: “Senate Democrats will continue fighting to rein in Donald Trump’s price-hiking trade and economic policies. A crucial first step is helping people who need it most — putting money back in the pockets of small businesses and manufacturers as soon as possible.”

U.S. Trade Representative Jamieson Greer indicated the administration would reconstruct its trade policy using alternative legal tools, including Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962.

Harvard Law professor emeritus Alan Dershowitz explained last Friday that Trump could still impose steep tariffs despite the Supreme Court’s ruling. He argued the administration relied on the “wrong approach” because it framed tariffs as revenue-raising measures, which fall under Article I constitutional powers (Congressional authority to levy taxes). Dershowitz urged the administration to reframe tariffs as foreign policy tools, placing them under the president’s Article II powers and thus beyond congressional oversight.