US refunds US$22 billion in tariffs, offsetting customs revenue

[WASHINGTON] The US Treasury refunded nearly US$22 billion in tariff revenue collected from importers in May, the first swath of such repayments since the Supreme Court struck down a major component of US President Donald Trump’s trade policy.

The amount was roughly equal to tariffs taken in during the month, according to a Treasury Department statement on Wednesday (Jun 10), meaning that refunds essentially cancelled out the government’s duties revenue.

The administration began processing refunds in April after the Supreme Court ruled that President Donald Trump did not have the authority to impose tariffs using the International Emergency Economic Powers Act (Ieepa). But the eventual extent of the reimbursements remains uncertain after the administration appealed a court order to refund every importer who paid the US$166 billion collected under Ieepa authority.

Net revenue from customs duties were slightly negative, by about US$42 million, the first time that has happened in Treasury data compiled by Bloomberg going back to 2015.

When Treasury Secretary Scott Bessent was asked about the tariff refund case during a congressional hearing last week, he said that the money would be returned to the companies that imported the tariffed goods.

Overall, the deficit narrowed to US$1.25 trillion for the first eight months of the fiscal year, representing a 9 per cent decline from the same period last year.

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Revenue from tariffs, which peaked in October, made a significant contribution to the Treasury’s coffers during the 2025 fiscal year, resulting in the smallest deficit in three years. Bessent has said that revenue collected through tariffs imposed using other authorities will result in the same amount hitting the government’s coffers in 2026 but some of those measures are not fully in place.

The interest the US paid on its debt was US$133 billion in May, an increase of 44 per cent over the same month last year. Individual tax withholdings plus Social Security and Medicare taxes collected increased to US$286 billion in May from US$247 billion last year, while corporate tax receipts were down by 67 per cent.

For the full fiscal year, the US deficit is expected to widen, based on Congressional Budget Office projections. The nonpartisan outfit said in its February outlook that the deficit would reach US$1.85 trillion for the 2026 fiscal year and with US$1.89 trillion for 2027. BLOOMBERG