Automakers – and Auto Buyers – Soon Could Be in For Tariff Refunds

A federal judge Thursday delivered a stinging defeat to the White House, ruling U.S. importers are “entitled to benefit” from the Supreme Court’s own decision tossing out Pres. Trump’s import tariffs. In other words, those who paid those illegal duties are due refunds. That includes the estimated $25 billion the U.S. auto industry paid out. Will they collect? And will they pass on any money to auto buyers? More from Headlight.News.

The federal government collected about $175 billion in tariffs under the International Emergency Economic Powers Act before the U.S. Supreme Court ruled on February 20 that Pres. Donald Trump had no authority to order tariffs under the IEEPA.

This week, the Trump administration received two more setbacks, a federal appeals court on Monday refusing to delay implementation of the Supreme Court’s ruling. On Thursday, Judge Richard Eaton of the U.S. Court of International Trade in New York followed up with his own ruling, declaring importers were “entitled to benefit” from those decisions. In other words, the Treasury now needs to start paying back what it collected.

How soon that will happen and who will benefit from these decisions is still uncertain. Clearly, major importers are hoping to get paid back as soon as possible. The auto industry is, of course, a major importer. And should it receive improperly collected tariffs that raises the question of whether car buyers might also be due some money back.

What’s new

Last spring, Pres. Trump put in place a wide variety of tariffs, subsequently ordering a number of changes based, critics said, on whim, as well as on negotiations with trade partners such as South Korea, Japan and the European Union. Talks were continuing with other nations, notably Mexico and Japan, at the time the Supreme Court issued its ruling.

The February 20 decision specifically focused on tariffs put in place under the IEEPA. Six of the nine justices ruled Trump overstepped his bounds enacting what were, effectively, new taxes. The U.S. Constitution specifically assigned the power to levy taxes to Congress. As a result, the tariffs were retroactively declared null and void.

This past Monday’s ruling said there would be no delays in implementing the Supreme Court decision, handing over to the Court of International Trade responsibility for beginning the refund process. That’s where Judge Eaton has now stepped in.

Refunds could soon be coming

The administration has faced heavy pressure from a variety of businesses, large and small, to return the tariffs it collected ASAP. Several large firms, including Bausch & Lomb, Dyson, FedEx and L’Oreal, have filed suit to get the process rolling.

“This is a victory for small businesses who have paid billions in unlawful tariffs and deserve their money back,” Dan Anthony, executive director of We Pay the Tariffs, said in a statement. “The court acted swiftly and correctly. Now the ball is in the government’s court, and small businesses are concerned they will drag this out further.”

Precisely how much needs to be repaid is uncertain. Estimates are that $133 billion was collected through the end of 2025, though CBS News reported a final figure could reach as high as $175 billion.

Clearly, the companies that paid tariffs directly into the U.S. Treasury will be getting the refunds. But the question is then what happens with money they collected from their own customers?

More Consumer Auto News

• Iran War Could Trigger a New Energy Crisis
• Soaring Delivery Fees are Becoming Auto Budget Breakers
• Ford’s Recall of 4M Trucks Underscores Growing Issue with Onboard Software

What’s in it for the auto industry?

The U.S. auto industry paid out an estimated $25 billion in Trump tariffs last year, a figure that contributed to higher costs and weaker earnings. But while manufacturers like General Motors, Ford, Stellantis, Toyota, Hyundai and Volkswagen might be hoping to find refunds soon waiting in their corporate bank accounts, they’ll likely only receive a small fraction of what they paid.

That’s because the automotive tariffs were largely authorized under specifics powers granted to the president by Congress, rules separate from the IEEPA which was at the heart of last month’s Supreme Court ruling, said Sam Abuelsamid, principal auto analyst with Telemetry Insights.

Automakers, like virtually every business in America, did pay out some money for goods covered by the IEEPA, added Abuelsamid. But, at this point, it appears tariffs covering imported autos and auto parts, as well as foreign-made steel and aluminum will remain in effect.

What about auto buyers?

At a time when vehicles are going for record average transaction prices topping $50,000, according to Edmunds, tariffs have only added to the problem. Figures vary, some experts estimating import duties have added $1,000 or more to the price of a typical vehicle.

If anything, automakers have become increasingly aware of the affordability issue and “they kept as much of (the tariffs) as they could out of MSRPs,” said Abulesamid – though he said some of the higher costs have been buried in destination fees that have risen by hundreds of dollars, on average, over the past year.

The Supreme Court ruling means the major of the tariffs impacting the auto industry will remain in effect unless and until the president drops them. If they do get some money back, Abuelsamid questions whether the automakers will then pass that back to buyers.

-“I expect the automakers to pass on absolutely zero,” he said, adding that might trigger class action lawsuits. “Even if lawsuits do succeed it will take years for consumers to get any money back.”

So, if you bought a new vehicle since last April, or even some imported auto parts, don’t hold out much hope that you could wind up seeing a tariff refund check land in your mailbox.