IEEPA Revenue and Potential Refunds — Penn Wharton Budget Model

Summary: We project that reversing the IEEPA tariffs will generate up to $175 billion in refunds. Unless replaced by another source, future tariff revenue collections will fall by half.

Introduction

In its 6-3 ruling on Friday, February 20, 2026, the Supreme Court decided that the International Emergency Economic Powers Act (IEEPA) does not grant the President the power to unilaterally impose tariffs of indefinite scope. The decision does not explicitly order immediate refunds. However, the decision that the tariffs were collected illegally has opened the door to refund claims. Importers generally have ۱۸۰ days after goods are “liquidated” to protest and request refunds from U.S. Customs and Border Protection.

Estimated Effects

Figure 1 shows the cumulative trajectory of IEEPA tariff collections between January 2025 and January 2026.

Figure 1: IEEPA Tariff Revenue

Source: Penn Wharton Budget Model based on data from U.S. International Trade Commission’s DataWeb, U.S. Customs and Border Protection’s Trade Statistics, and U.S. Department of the Treasury’s Daily Treasury Statement.

As a share of total customs duties, we estimate that IEEPA tariffs currently represent half of total customs duties. See Figure 2. This share has been increasing since the inception of the IEEPA tariffs but would be expected to stabilize going forward assuming the continuation of currently effective tariff rates (including IEEPA tariffs).

Figure 2: IEEPA Share of Total Customs Duties

Note: Figure shows the cumulative share of IEEPA revenue as a fraction of total customs duties since Jan 2025.

Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb, U.S. Customs and Border Protection (CBP) revenue reports, and U.S. Department of the Treasury’s Daily Treasury Statement.

We also estimate historical IEEPA tariff collections by country using USITC trade data from January through November 2025. IEEPA tariffs were initially imposed on China in February 2025 and expanded to include imports from Canada and Mexico in March 2025. In April 2025, the Trump administration announced a broad set of “reciprocal” tariffs under the IEEPA authority that targeted imports from all trading partners. We show the monthly share of IEEPA tariffs for several important trading partners in Figure 3 below.

Figure 3: Share of IEEPA Revenue by Trading Partner

Source: Penn Wharton Budget Model based on data from U.S. International Trade Commission (USITC) DataWeb and CBP.

Appendix: Methods 

Customs and Border Patrol (CBP) provides public trade statistics that are updated semi-regularly. As of the last update on December 14, 2025, CBP reported that it had collected approximately $133.5 billion in tariffs under the IEEPA authority.

 To project IEEPA collections forward, we utilize the same trade model that powers our tariff simulator. This model is regularly updated to provide revenue forecasts under currently effective tariff policy. At a high level, our model functions as follows:۱

1. We use detailed historical data on US imports from Census to forecast imports across over 230,000 categories of goods. These categories reflect country-specific imports across almost 11,000 types of goods. These types are reflected by Harmonized Tariff Schedule (HTS) codes assigned to imports by trade authorities.

2. We estimate statutory tariff rates that are applied to each category of imports based on publicly available data from the US government, including executive orders and the US Federal Register.

3. PWBM’s partial-equilibrium trade model forecasts how consumer demand will react to changes in prices caused by tariffs. This reaction includes substitution toward similar goods that are exported by other countries, as well as substitution toward domestic goods and services.

4. After accounting for this behavioral response, we apply the tariff schedule to equilibrium import levels to estimate tariff collections.

This model allows us to incorporate a realistic behavioral response to tariffs, which is important for accurate estimation of tariff receipts. Large tariffs may induce consumers to reduce demand for that good or switch to alternatives, leading to lower tariff revenue than if we assumed no change in consumer behavior. Our model implies that under the current tariff schedule, IEEPA receipts are currently about $500 million per day.

This analysis was produced by Lysle Boller, Wanling Luo, Xiaoyue Sun, and Kent Smetters. Mariko Paulson prepared the brief for the website.

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