Prof G Markets - Billions in Tariff Refunds — Who Gets the Money?

Episode Date: February 24, 2026

Ed Elson breaks down Trump's new tariffs and unpacks where the refunds stand following the Supreme Court’s decision last week with Peter Harrell and Ryan Petersen. Then he shares his thoughts on what the legacy of the tariffs will be.  Peter Harrell is a Visiting Scholar at the Institute of International Economic Law at Georgetown Law School. Ryan Petersen is the CEO of supply chain management company Flexport.  Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on InstagramSend us your questions or comments by emailing [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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is an ice-cold beer. Money markets matter. If money is evil, then that building is held. Show goes up! Welcome to ProfiMarkets. I'm Ed Elson. It is February 24th. Let's check in on yesterday's Market Vitals. The major indices fell after tariff uncertainty resurfaced.

Renewed AI jitters. Also rattled investors. Software companies were hit especially hard. offer a viral post from Citrini research, reignited concerns about AI's impact on the economy. Meanwhile, Bitcoin continued to slide, and gold and silver both rose. Okay, what else is happening?

For a fleeting moment, it looked like the courts had put an end to Trump's tariffs. In a 6-3 ruling on Friday, the Supreme Court decided that Trump can't use emergency powers to impose sweeping tariffs. Stocks and Treasury yields rose on the news. Trump then called the decision, quote, ridiculous and extraordinarily anti-American, and then he moved to Plan B. Within hours of the

ruling, he announced a blanket 10% tariff on all imports, and then he said he'd bump it up to 15% on Saturday. This time, he's leaning on Section 122 of the Trade Act of 1974, which gives the the President's authority to restrict imports for up to 150 days. Stocks gave back their gains on Monday as investors digested the whiplash. So many important questions remain. What exactly has changed here? What will happen with tariff refunds? Will consumers and small businesses get any relief? Lots of questions here to help us answer some of these. We have a panel of experts today. We've got Peter Harrell, visiting scholar at the Institute of International Economic Law at Georgetown Law School, and also Ryan Peterson, CEO of Flexport. Peter,

Ryan, thank you very much for joining us on Profji markets. Peter, we will start with you. A lot has happened over the past three days. Give us your initial reactions to the Supreme Court's ruling and also Trump's reaction to the ruling. Yeah, so we got the Supreme Court decision on Friday. I don't think the Supreme Court decision really came as a surprise. For those of us who had listened to the Supreme Court hearing back in November, it seemed like a majority of the justices were skeptical of Trump using this. 1970s-era emergency powers law for his tariffs. So not really a surprise there. You could also tell the administration wasn't really surprised because while Trump obviously denounced the Supreme Court with his characteristic bravado, the administration was also quite ready to go with their backup plans. As you alluded to, within hours of the Supreme Court ruling, Trump had signed a proclamation using

this other statute, also from the 1970s to impose a 10% tariff. He said on Saturday that he would increase that to 15%, although as of Monday afternoon, he's not done so. So I do think we have to see if he, in fact, increases it to 15%. Probably will, but we haven't actually seen that yet. That action, that what's called 122 action, will keep this either 10 or 15% tariff in place through late July. He can't use that statute for more than 150 days.

And so the other thing we're seeing is the administration, begin to spin the wheels on some still other tariff laws that could keep tariffs in place once the 122 action expires in late July. So you mentioned that he puts the 10% tariff in place. That's happened. Then he says we're going to go to 15%, but that hasn't quite happened. Maybe it will have happened by the time this has. Ryan, I was looking at your ex-account. You actually predicted that he would bump it up to 15% before he said he was going to do that. You said that he's got it at 10% and then he said, I predict that he's going to move it up to 15%. You also made another prediction

that we'll get to. Why did you say that? And do you think it will still happen? Well, 15% is the maximum of what he can do. And so you figure he has it in the back pocket, left himself a little cushion to add some more later. And I wasn't expecting him to pull the trigger as fast as he did. I thought he'd wait a week until in my prediction. I said, you know, Canada is going to do something to piss him off and then he's going to do it. But it turned out America beat Canada in the hockey game. I thought that would be the funniest thing that could happen is if Canada beat us. And then he said, all right, here's some more tariffs for you.

But the other prediction you said, you wrote, you wrote, quote, 150 days from now, the taras will be paused for 15 minutes and then immediately reinstated for another 150 days. And this goes back to what Peter was mentioning here, that there is this 150 day timeframe. And that's what's legal. You say he's just going to cancel and renew. Take us through that. I like to hear Peter's take on that and other people, too. I'm not a lawyer. And, you know, there's nothing explicitly in the law that says you can't extend it beyond 150 without Congress's approval. But if you let it expire and then put a new one in, assured it would get challenged. It might lose the case, but he could do it. I don't know. What do you think, Peter? There's one question about how do I think the courts are going to interpret the law,

which is not really the question of what Trump will do, right? Because Trump's going to do what Trump's going to do. I actually feel pretty confident that if Trump tries this strategy of 150 days, expires for 15 minutes, another 150 days, the courts will throw that out. Now, it might take them a couple of months to throw that out. So Trump might, you know, get another couple of months of, you know, before the courts start out. But I think the courts would throw that out. It's kind of an interesting thing here of like, you know, even with Aipa, even if you knew it was going to get thrown out and you knew you'd lose the Supreme Court case on Friday, he's a lot. he's still got quite a lot of leverage from putting it in. He got all kinds of countries to come and make a trade deal with him.

Most of those countries are not going to undo the duties that they drop their tariff rates or lowered other barriers. And they're probably not going to just turn around right now and drop it. It's sort of interesting to think of like what are the rewards that Trump gets, even from effectively what he did was break the law. It's interesting to think about. Well, what do you think this does mean for other countries, Peter, in terms of, I mean, they came up with these sort of semi-deals, they're more kind of spoken word agreements, and then everyone puts their tariffs in place. If you're a foreign government, if you're, say,

Brazil or you're China or the UK or whatever, do you react to this news? Do you decide, okay, I guess we're taking the tariffs down, or do you react to the 10% or the 15%? Like, what does this mean if you're a foreign government? Well, the first thing I would say, and I said that, this last year that in 2025, the biggest true winners of Trump's trade war, the trade lawyers. I think it is going to be true in 2026 as well that the trade lawyers will be the, you know, one true class of winners. And so I think what you're seeing right now is the foreign governments are talking to a bunch of very expensive trade lawyers to try to understand what's going on

and what they should do to game this out. Look, I think the question in some sense is in Trump's court. In the following way, I think that if you are a question, you are going to be a question. I think that if you are Europe or you are Japan or you are one of these other countries that has a trade deal, if it looks like Trump is going to keep your tariff rate at the rate that was agreed to or lower, right? If you'd agreed to a 15% rate, if it's going to be a 15% rate or lower, I think you keep honoring the deal, right? Because you don't want to piss Trump off. He might sanction you. He might, you know, who knows what he's going to do, right? So I think you keep honoring. He has these other levers. He can put Section 15.

32, Section 301, he has other things he can go do. Totally. So I think you stick to it. Now, if what Trump does is use this as an opportunity to somehow hike rates, like if you were at a deal, if you're the UK and you have a 10% rate in your deal and he's now hiking that to 15, I think that becomes a little more complicated a question for you. But if Trump plans to keep the rates the same, I think most countries will basically continue along. Ryan, you kind of have the most. direct line of communication with the businesses that are dealing with this because you're operating the logistics as they trade goods around the world. What are businesses and companies doing about

this, if anything? In the same way that maybe there's a question for foreign governments, do we react? Are you finding that companies are reacting to this news? Well, it's a bit of a popping of champagne that's happening right now. People are expecting to get refunds. I expect to get refunds. a lot of the trade attorneys and advisory folks are a little bit hesitant to just say something. I don't know. Yeah, you're going to get a refund. It might take you a couple of months, but you're going to get a refund here, Ryan. All right.

He's on my side. That's why it's how obvious you just read the motion that DOJ filed in the appellate court. And it's just like, we will give refunds if we lose this case. You're like, okay, great. Now you're going to give refunds. Trump says they're going to fight it. It's going to get litigated. Surely that's true.

But, like, they've got to lose the case. It seems like a slam dock. How does that work? How does the refund process actually work? Right. So there's a fair amount of uncertainty there. What we do know is under the customs regs, you basically have a maximum of 494 days

after a customs entry is filed to do what's called a file a protest. And that's the maximum. It could actually be less. So you want to get these things filed sooner than that. And so you're going to have to go back and file protests on all the entries that you did that had AIPA tariffs. And so actually the first AIPA tariffs didn't come out on Liberation Day. They came out on February the 4th of last year with fentanyl tariffs on China, Mexico, Canada.

I think February 4th is the first. I forget the exact timing of those three different things. So your clock is kind of like maximum of $4.94. But honestly, you're pushing it close to the edge. And you don't want to get past that date. If you get past that date, it's too late to file a protest. And at that point, you're actually have to file a lawsuit to undo the IEPA tariffs. And lawsuits are very expensive.

Protests are pretty cheap. Flex Board and others can just file a protest for you. So that's what we're doing with our customers right now is now that this is now a thing. They've been overturned. We've been ruled illegal. We're going through with all of our customer base and filing protests for all of their IEPA entries going back to February 4th of law. last year. And then we've also created a process on our website at tariff's dot flexport.com

at the top you see refund, currently says refund calculator, because that's what it said as of Friday. I'm trying to get the team to update and just refund, you know, claim your refund or something. But that's what that is, is we're bringing people in. First of all, calculating the dollar amount of how much is potentially owed, I think likely owed, very high probability. And then getting you enrolled in a program where we'll go file those protests for you. What we don't know yet is, is filing a protest enough? If I file a protest and you acknowledge it as CBP, do you now send me a check? Or is there some other mechanism?

And we won't know that until it gets litigated and they lose, I think. And then customs will provide some clarity for what comes next. But for sure, we know you've got to go get your protests in if you've got any entries. And if you're only to take one thing away if you're a business out there is follow your protests. And if you want an easy way to do it, call me. It sounds like you both strongly agree that refunds are coming. I was just saying, I mean, think about it this way. There's nothing magic about tariffs that make them different from any other tax, right?

If President AOC had declared we're all paying 70% income taxes now and the court said, no, there's no 70% income tax. Of course, we'd all be saying, you know, we get our money back, right? It just would be obvious to everybody. And the U.S. government actually, you know, it processes on the different agencies. but on the tax, you know, on the income tax, they do 120 million refunds a year, right? It's not like the government doesn't do tax refunds. It's not like the tariffs or some magical thing the government can just keep when they're illegal. They're like any other tax.

So I do take the point, and I very much agree with Ryan, the government can make this hard, right? They could they could try to not issue refunds just as companies are filing protests. They could try to require everybody to come in to sue. They could make this administratively hard. But at the end of the day, whether the government goes the easy way or the hard way, the money is going to be ordered to be turned back over. Yes. And by the way, the government prepared itself.

So Flexport has gotten over $700 million of the customs refunds for our customers in the last five years. So Peter's point is like a very normal thing. It's very possible. You know, this is a normal thing. You file a protest. You get your money back. The government has been sending those as paper checks from the Treasury Department for the last five years. And they get lost in the middle all the freaking time,

and they get taxed by scammers. It's a nightmare. Well, about two months ago, maybe anticipation of Friday's ruling, they updated their process to say, all refunds will now be done electronically through ACH. And if you want to, it was like auspicious.

We're all looking at this going, huh, why are they suddenly getting their house in order and how they're going to process refunds in a more automated fashion? Which does bring up this question of who's really in charge here. And I think this is why I, at least,

observers feel a little bit skeptical about the refund idea because this is really the policy that Trump has hung his hat on. It was all about tariffs. And so the idea that the Supreme Court is going to come in now and say, actually, you don't have the power. We're striking it down. We're not going to let it happen. This whole thing that you built your entire administration and campaign on is going to be a failure. It's not going to work. We're going to send all that money that you bragged about for a long time that you were very excited about, we're just going to send that all back. And so I, as an observer, look at that, and I think there is no way that this guy is going let that happen. I don't know how, but I just get this feeling that he's not going to let it happen.

I think that's a valid point, and we should clarify some things here. So the Supreme Court struck down the AEPA tariffs, which was one form of tariffs. I did not strike down. There's other two forms that he's done are Section 301 and Section 232. And now, the new one, Section 122, are other forms, and those have not been challenged. In fact, those have been challenged in the past and held up. And so reasonable confidence there, but they're different. They don't, the Aipa gave this, like, sweeping blanket power, and he was really stretching, you know, and the Supreme Court really stretched too far.

You can't use it the way he used it. But these other ones are more targeted. Section 301, you have to do it on a sector basis, and it requires an investigation by the USTR. And there's 12 of those currently underway. investigation. So expect more to come out in that regard. 232 is done on national security grounds, which is 232 is where you get your steel and aluminum tariffs. But also, this one has to lose in court, I think, Peter.

But they also used it to impose tariffs on furniture and saying that that's a national security concern. I was stealing aluminum you get. You're like, all right, we need to make tanks or something. But furniture, it feels like... We need on office chairs. You need desk chairs in the Pentagon, right? You know. There is another big question here, Peter. I mean, it sounds like the consensus is the refunds will happen based on the IEPA,

and maybe Trump will just say, okay, you can have that money back, but we're going to figure out more tariffs going forward. But the other big question here, importers, companies, businesses, they're going to get their money back. Yeah. But there is someone else who paid a lot of the tariffs here, and that is the consumer on which as much as 60, percent of these these tariff costs were passed on through. The numbers vary, but that is a number

that has been cited. A consumer is going to get their money back, Peter? I hate to say this, but the answer to that is probably not. And here's where you really have to distinguish between the law of the tariffs and the economics of the tariffs, right? Under the law of the tariff, the tariff is paid by the importer of record, which, you know, might be Home Depot directly. It might be a wholesaler. It might be a small business. But, but it's the, you know, entity that actually imported the good from abroad paying the tariff. And that is who will under the law be able to get the tariff back, whether Trump makes it easy for them or whether they have to sue through the courts for the next, you know, one to two years.

That it'll be the importer record to get the money back. Now, in some cases, there might be a contractual arrangement between like a wholesaler and one of its customers, where the wholesaler is contractually agreed if I get my tariff back, I, you know, have to pass on some of that to the, you know, to the retailer. But even if that is the case, you know, when I went to Walmart and bought something that was, you know, 10% more expensive, I have no right to get that money back from Walmart. So this is clearly going to be a political issue. I think we're already seeing people in Congress talk about it. I am sympathetic to the kind of moral argument here and to the sort of political issue that is coming down the pipe. But in sort of a

legal sense, there's no way for me having actually paid economic sense, but not in a legal sense, many of these tariffs to get my share of them back. Yeah. And I agree that. And I would add to what you say by, yeah, consumers are probably getting nothing. They have no, not only they have no legal, they have no leverage. And, but whereas the wholesale thing that Peter points out is quite, quite interesting to dig into, which is I've already talked to a couple, like one importer I talked to yesterday,

he's getting it if all things go well here he's going to get a 12 million dollar refund and he owns his business i mean this guy is off the new vacation homes come i mean you know right i told him i sent him a link to a civilian black hawk he could probably buy for a you know let's buy a helicopter dude um and no don't do that most lottery wingerers go back but don't do that guy um but he was his concern which i hadn't really thought about before he's like he knows target and walmart are going to call him and they're going to say hey where's my cut man you guys you you know You raise prices on us. So I think that wholesale retailer relationship is going to be fraught, and there's going to be some fights there.

And those guys have leverage. You're like, okay, don't give us any money. Then you don't get to sell in Walmart next year. Yeah. So that's interesting. The other really nuance here is it goes to the importer of record, which is, you know, the one that Peter missed on that is actually in the United States, you can have a foreign company as a whole supporter of record. Yeah, it's true. That's the one that's really going to anger Trump.

because about what we've seen in our data, not in our data, but in public records that we've analyzed, is that the number of foreign importers of record has been usually about 9% of U.S. trade is done where a foreign company serves as the importer, at least on ocean container trade, which is the easiest place to access public records, 9%.

That between April of last year and when we ran this analysis, I think it was like in November, it had gone from 9% to 20%. Wow. And that's because there's a huge amount of tariff fraud where what was happening is foreign companies would switch and they would import the goods. They would underdeclare the duties and not pay them properly by just saying, hey, these things are worth $100,000. No, they're not. They're worth $10. And then you just reduce your duty rate by 90%.

And first of all, those are the guys going to get the checks. Not the, you know, it's like Trump's going to be wiring money offshore directly in this thing. It's going to really drive them crazy. And the importer that used to import the goods. So like, let's say I'm a brand. I'm buying goods in the U.S. or buying goods from overseas. Traditionally, I was the importer of record.

In order to avoid duties, this is what was really going rampant. I mean, 11% of all trade flipped to this. They would say, hey, the factory is going to import the goods for me. I'm not involved in the import transaction. I don't worry about that. They pretend like it's not their problem and they don't know anything about what's happening. Well, they're getting no refund at all. because the money's just going to their factory.

So that's like an interesting nuance here that there was a lot of fraud happening and been watching closely. And I don't feel bad for them at all because they were cheating, so they shouldn't get a refund. Right, exactly. But it sounds like they probably will. I mean, what we've done here is if we've kind of deteriorated our relationship with a lot of other nations and made things more expensive for consumers, and now we're going to take the money that will pass on it,

the customers, and we're going to set it back to a lot of foreign nations. I mean, to me, it's a total disaster, but we could probably go on for hours with this conversation. We should start to wrap it up here. Peter, just before we let you go, any predictions for how this will play out moving forward? Who will be the winners? Who will be the losers? How will it all shake out? So I actually think the hardest thing for Trump about losing his IEPA tariffs,

is not going to be the sort of 15% tariff rate on Japan or the 20% tariff rate on Vietnam. I think he's ultimately going to be able to recreate those tariffs under other authorities. What he's going to find frustrating is that Aipa was really the only law he could wake up on Tuesday and say, you know what, I want Greenland and they're going to be 20% tariffs on Europe on Friday if I don't have Greenland. Like none of these other laws let him just kind of pull out the tariff sharpie and sign an executive order and impose tariffs. He actually has to do fact-finding. As Ryan, let's say, you got to have either the U.S. trade representative or the Commerce Department, do fact-finding, spend at least a couple of months to do investigations. You got to show there's like a trade problem or a national security problem with the good we're importing or the country we're importing it from. So I think he'll be able to recreate this kind of 10, 15 percent tariff rate he likes.

But he is really going to feel the bite of not being able to just wave his tariff sharpie around and threaten tariffs whenever he's mad at somebody. Ryan, we'll give you the final word predictions on how this will all shake out. Well, I thought Peter's earlier point of the trade attorneys are the ones who are really going to benefit here. It's just a lot of complexity. You know, the one good thing about Aipa was like, it was kind of simple to understand. There was a rate per, you know, you see the rate on the country. And now it's these sector-based things come with all kinds of nuance that's really hard to unpack.

section 232, steel and aluminum as a really good example, where you have to know the dollar value of the steel and aluminum within the overall value of the product. It's like you have to break that out and now calculating the duty is much harder. And doing this on the line item level for every product you enter is you're going to get more and more complexity because, yeah, it's not just a blanket thing on the country. It's like, oh, the sector investigation of this, HS, you know, this category. and often those Congressional and, sorry, those Commerce Department investigations are done like on a blanket basis saying on, on furniture. Well, furniture is not just a thing that has, it's lots of different H.S. codes. And duty rates are dialed them into the H.S. code, the harmonized schedule code.

So you now have to translate executive orders or other forms of regulation into the customs actual day-to-day life of a customs broker. and it becomes quite hard. You need tools. Final plug, I get to finish. Tariffs.netflictsport.com. We've built some free tools for you to help manage this annoying environment. All right. Ryan Peterson, Peter Harrell, really appreciate your time.

We'll have to do this again. Thanks so much. Our pleasure. Have a great day, guys. We'll be right back. And for even more markets insights, you can subscribe to my weekly newsletter, simply put, at edwardelson.

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This and other information can be found in the fund's perspective at getvcx.com. This is a paid sponsorship. This week on Networth and Chill, I'm joined by her first 100K, aka Tori Dunlop, a fellow personal finance creator who's changing how an entire generation thinks about money. Tori's journey is a masterclass in turning personal finance wins into a platform that empowers millions. She opens up about the real strategy behind hitting that six-figure milestone without

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Here's what we said. The law literally says, you know, this is only legal if it is in response to, quote, an unusual and extraordinary threat to America. I mean, Trump said the threat was the trade deficit. A trade deficit is completely normal. That's not a threat. And indeed, that is what the court ruled. As we've discussed before, this all goes back to who has the power to do. do what? And when it comes to issues of taxes, or as James Madison called it, the pockets of the people,

that power lies with Congress, not the president, and tariffs are essentially a tax. So tariffs are now illegal. The obvious question is now what? Will the tariffs just disappear? Will there be tariff refunds? What will happen to all of these trade deals, or as we prefer to call them, concepts of plans of trade deals? These are the trillion-dollar questions. on which thousands of businesses and workers depend. And the answer is a pretty unsatisfying one, and that is we don't really know. We don't really know what will happen to those trade deals.

We don't really know what will happen to the refunds, and we don't really know what will happen to the tariffs themselves. Most things are up in the air, which is probably why the markets are reacting the way they are, and that is they're reacting very ambivalently. Now, we can make some educated guesses based on what we do know. And I think the first thing that you should count on at this point

is that the tariffs are still on. Trump immediately responded with those 10% tariffs and then 15% tariffs, which are legal under that U.S. Trade Act of 1974. The only caveat is they only lost 150 days, at which point they must be approved by Congress. So what we can expect is that the tariffs will remain on the table. Trump and his legal team will be fighting tooth and nail

then to figure out how to get them extended in some way, either through Congress or through some other trade law. So my expectation, and I think it's Peter and Ryan's expectation too, that tariffs will remain in one form or another for the foreseeable future. Now, what does this mean for our deals with other nations? Well, as you know, I don't think we ever even reached a deal with any other nations. My definition of a deal is a written contract signed and ratified into law. We didn't really get any of that. All we got was spoken frameworks that were really heavy on the PR and really light on the details. So in that sense, I'm not sure much has changed here. We still have no deals. We still have no certainty. And yes, we have still degraded our relationship with most of our

allies around the world. That all remains the same. The biggest question is the tariff refund. Because if those $175 billion in tariff revenues were illegal, which they are, then businesses are now entitled to those refunds. Now, I'm not sure how it will work, as Justice Kavanaugh wrote, the refund process is likely to be, quote, a mess. But here's what I can tell you, if those refunds do happen, then the people who actually paid them, that is, the American consumer, they will not get their money back.

As we've discussed before, it was Americans that paid the cost of tariffs through higher prices, and according to the Yale Budget Lab of the costs, as much as 63% was passed on to consumers, which is why your grocery bill exploded last year. But unlike importers that have direct receipts of their tariff payments, you, on the other hand, don't. Which means even though you paid the cost of tariffs, you will not be getting a refund.

And so what this really boils down to is, once again, a direct wealth transfer from regular Americans to large corporations. Trump has, once again, I'm sorry to say it, screwed over the consumer. And we can hash out the finer details as much as we like. But big picture, that is what happened here. As I've said before, Trump's tariffs will go down as America's Brexit. Minimal upside, maximal downside, and an economic outcome that made regular Americans, for the most part, poorer.

That will be the legacy of tariffs. and we are now watching that legacy unfold right before our very eyes. That's it for today. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Patterson and engineered by Benjamin Spencer. Our research team is Dan Shalonla Kinsel, Chris Nodonoghue, and Mia Silverio. Thank you for listening to ProfiMarkets from Profi Media. If you liked what you heard, give us a follow.

I'm Ed Elson. I will see you tomorrow. Today's show is brought to by Vanguard. As we step into the new year, it's the perfect time for all the financial advisors out there to think about how to set your clients up for success. One way to do this is to level up your fixed income strategy. But bonds are tricky. The market is huge, rates shift, and risks hide in plain sight. That's why having a partner with scale and expertise matters.

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