The US government has already paid back tens of billions of dollars in tariffs it collected before the Supreme Court ruled them illegal, according to budget figures released on Monday. Tariffs – taxes on imported goods – have been a key part of Donald Trump's economic plan since he took office again last year.
Supreme Court Decision Triggers Massive Refunds
In February, the Supreme Court shut down a big chunk of the extra tariffs Trump had ordered, forcing the government to return money to the companies that had paid them. According to budget data, the US has paid out $81 billion (£61 billion) in tariff refunds so far this fiscal year, which started in October 2025, compared with $5 billion during the same period last year. A Treasury department official said the spike was almost entirely because of the Supreme Court decision, with most of the refunds happening in May and June.
Impact on Federal Deficit and Spending
Trump had pitched the tariffs as a catch-all fix for the economy, bringing factories back to the US, getting better trade deals, and closing the deficit in the federal budget. However, the deficit, which had become a little smaller last year thanks to the tariff income, is now growing again. It hit $1.367 trillion in the first nine months of the fiscal year, up 2%. The US spent more than $1 trillion just on paying interest on its debt, up 14%, and military spending climbed 5% because of the war in the Middle East.
New Tariff Proposals on the Horizon
The US administration's current temporary 10% global tariff is due to expire on 24 July, but the White House is preparing new duties over what it sees as lax enforcement of anti-forced labour laws and excess industrial capacity. The latest proposal could affect leading partners including the UK, Japan, India, Taiwan, and China, and would enable Trump to skirt previous court-imposed limits on his protectionist agenda. The new tariff rates are expected to be between 10% and 12.5%. The US has also threatened to impose fresh levies of 25% on Brazil.
Threat of 100% Tariff on European Digital Services Taxes
Last month, Trump also threatened a 100% tariff on European countries, including the UK, that pursue a tax on the biggest US tech companies. The UK has a 2% digital services tax that applies to large social media platforms, search engines, and online marketplaces. The tax, which applies to companies such as Apple, Google, and Amazon, raised more than £800 million in 2024-25, according to the Treasury. France, Spain, and Italy impose a digital services tax of 3% on large companies working in their countries, while several other EU countries have either implemented or proposed similar policies.
The US president said his tariff would overrule any trade deals with the US, “whether implemented, signed, or not.” In a post on Truth Social, Trump said: “Numerous European Countries have been discussing the imminent implementation of a Digital Services Tax on American Companies. Some of these Countries are close to actually doing this. Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100 per cent TARIFF on any and all Goods sent to the United States of America. This TARIFF will supersede Trade Deals made with the Country, whether implemented, signed, or not. Additionally, the 100 per cent TARIFF will be immediately imposed, if they proceed.”
