Trump Set to Impose New Tariffs as Refunds Flow for Illegal Duties

The U.S. government refunded nearly $22 billion in unlawfully collected tariffs in May after courts struck down former President Donald Trump’s emergency import duties, even as many tariffs remain in force. Economists warn that average U.S. tariff rates are holding steady near 11%, with inflation, weak consumer sentiment, and elevated input costs keeping pressure on businesses and households. The White House is pushing ahead with new tariffs under Section 301, 122, and 232 of U.S. trade law, though legal challenges and ongoing investigations could limit their scope or speed. Tariff revenue is now flowing out of the Treasury faster than it is coming in, with the $22 billion reimbursed to importers in May alone. While consumers may see temporary relief from these refunds, businesses continue to pay tariffs on goods from nearly every major trading partner, despite the Supreme Court’s February ruling striking down Trump’s “emergency” tariffs. The temporary 10% global tariff imposed after the ruling expires at the end of July, but officials have pledged to replace it with more durable import duties. A proposal released this month, stemming from a forced labor investigation into multiple U.S. trading partners, is expected to be the first step in restoring revenue. According to Bloomberg Economics analysts Nicole Gorton-Caratelli and Chris Kennedy, if implemented as planned, these new levies would raise the average U.S. tariff rate by 0.6 percentage points, bringing it to about 11%. This remains below the 13.5% rate that was in place under Trump’s so-called reciprocal tariffs, but additional investigations—including one into Brazil under Section 301 for alleged unfair trade practices—are underway and could further expand the president’s tariff authority. The administration is also pursuing Section 232 tariffs on national security grounds, with ongoing investigations into sectors like robotics and medical devices potentially leading to new duties. Despite the tariff wall, the White House has carved out deliberate exemptions for fast-growing parts of the economy, including data centers and AI infrastructure. Recent moves have also eased duties on imported tractors, farm machinery, certain metal products, and most goods from Brazil. However, the broader economic picture remains strained: the University of Michigan’s consumer sentiment index is near record lows, U.S. inflation accelerated to its fastest pace in over three years in May, and businesses have delayed investments amid uncertainty. “We think that pricing pressures have not yet abated, nor will they anytime soon,” said RSM Chief Economist Joe Brusuelas, citing higher energy prices and costs tied to AI infrastructure buildout. Legal challenges continue to loom over the new tariffs. The temporary Section 122 tariffs, imposed under the 1974 Trade Act, are already under legal fire, though an appeals court recently allowed them to remain in effect for now. “Going forward, the 122 tariffs and the new universal tariff imposed under the guise of a 301 forced labor investigation are also at litigation risk,” said Shai Akabas, vice president of economic policy at the Bipartisan Policy Center. “It’s very unclear that the administration has found a new durable means of imposing the ‘universal’ tariffs that the president is seeking as part of his broader re-industrialization strategy.” The cost-of-living crisis has become a central issue ahead of the November midterm elections, with Democrats blaming tariffs for higher prices on essential goods. A February Pew Research Center poll found that six in ten Americans viewed tariffs as a leading cause of inflation for working-class families.