Something rare happened to the U.S. government's tariff money in May: it handed back more than it took in.
Customs collected $21.93 billion that month and refunded $21.97 billion.
That left net revenue at negative $0.04 billion.
June was worse. The government collected $23.63 billion but sent $49.18 billion back in refunds.
Net customs revenue came to negative $25.56 billion. June's loss worked out to $25.6 billion.
Monthly refunds stayed under $2 billion through 2025. Then came the Supreme Court.
In February 2026, it struck down tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, a law that gives presidents broad emergency powers.
Court orders later told Customs and Border Protection to give the duties back. Until 2025, tariff collections were expanding faster than any other source of federal revenue, and IEEPA duties made up roughly half of those tariff collections.
Now that stream has briefly turned into an expense.
The refunds are only the beginning of a very large repayment. The government collected about $165 billion in IEEPA duties before the ruling.
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Add up May and June, and payments back to importers reached about $71 billion. Most of that is tied to IEEPA, and more than half of the duties collected illegally have not been returned.
Net tariff revenue could stay below zero, or very low, for a while longer. The refund process has kinks too.
The first phase of the refund process only handles simpler claims, and the administration has appealed a requirement to repay importers who never sued.
Unpaid refunds are now drawing interest at 4.5 percent, but only when the overpayment is more than $10,000. Smaller overpayments earn 6 percent instead.
The tariff story did not stop with the refunds. Over an 18-month stretch, the legal basis shifted from IEEPA to Section 122, an authority in the Trade Act of 1974.
That provision put a 10 percent levy on the bulk of imports, with an expiration date of July 24. A court struck that down too, but the ruling is paused while the government appeals.
On July 23, the U.S. Trade Representative wrapped up its Section 301 forced-labor proceedings. The outcome applied tariffs between 10 percent and 12.5 percent to goods from 86 countries, with many exemptions.
A 50 percent levy on selected Canadian goods took effect on August 19 under Section 338, a provision of the Tariff Act of 1930. The authority had never been used for tariffs before.
Both new measures will probably face court challenges.
The peak for gross tariff collections was $33.09 billion, hit in October 2025. By June 2026, they had fallen to $23.63 billion.
If a refund sounds like good news, check who gets the check. The money goes to importers, not shoppers.
The Harvard Pricing Lab found that part of the tariffs showed up as higher prices for customers. Consumers and downstream businesses carried much of that cost, and they will not see a dime of it back.
A few shoppers are pursuing speculative class actions to try to collect the returned duties. Repaying duties does not undo the damage.
Other tariffs remain, so the harm is expected to keep growing. Businesses watched the rulebook change more than 50 times.
That uncertainty makes companies less likely to invest and hire, and it distorts pricing. The economic cost can end up larger than the revenue those tariffs raised, and none of that is refundable.
For your portfolio, this is not a story about one tariff or one refund. Constantly shifting trade rules move costs and supply chains in ways that are hard to predict.
That uncertainty is the real tax, and it lands on anyone who owns stocks, earns a paycheck, or buys anything at all.
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