Why $20 Billion in Tariff Refunds Won’t Rescue New Car Shoppers

The Supreme Court has ruled that President Trump’s emergency tariffs were unconstitutional, and the refund floodgates are opening for automakers, suppliers, and tens of thousands of other importers. But if you’re waiting for that windfall to shave thousands off the price of your next new vehicle, you’re probably going to be waiting a long time.

• The Supreme Court struck down IEEPA tariffs in a 6-3 decision on February 20, 2026, and CBP began accepting refund claims on April 20
• Automakers and suppliers are in line for roughly $20 billion in refunds as part of a much larger $166 billion payback
• New car prices already climbed to about $50,000 on average, and analysts don’t expect sticker relief anytime soon

What the Court Actually Decided

In a 6-3 decision, the US Supreme Court held that the President lacks authority to impose any tariffs under the International Emergency Economic Powers Act (IEEPA). Chief Justice John Roberts wrote that based on two words separated by 16 others in IEEPA, “regulate” and “importation,” the President claimed the independent power to impose tariffs on any country, product, rate, and duration, and those words “cannot bear such weight.” He added that IEEPA “contains no reference to tariffs or duties.”

The ruling invalidated the so-called reciprocal tariffs and the fentanyl-related duties on goods from China, Mexico, and Canada. Within hours of the decision, President Trump announced a 10 percent global tariff under Section 122 of the Trade Act of 1974 and moved to launch Section 301 investigations that could lead to additional future tariffs. So the story didn’t end on February 20. It just changed shape.

How the Refund Machine Works

Importers who paid tariffs later struck down by the Supreme Court can now apply for refunds, with the government ordered to return roughly $160 billion that was unlawfully collected. Customs and Border Protection said in court filings that over 330,000 importers paid a total of about $166 billion on more than 53 million shipments.

The Consolidated Administration and Processing of Entries (CAPE) tool will process the applications, but it’s limited to straightforward, recent import entries that were hit by the tariffs. Messier cases get handled later. Refunds are expected in 60 to 90 days, though some businesses with older and more tangled tariff situations will have to wait for a future phase.

For the auto industry, the numbers are eye-popping. Automakers and their suppliers are eligible for up to $20 billion in tariff refunds, and CBP announced it would soon begin processing the first phase of the program.

Why New Car Prices Aren’t Dropping

Here’s the catch buyers won’t love. Automakers and suppliers hope the refunds will eventually stabilize prices across the supply chain, though immediate consumer benefits are unlikely. Carmakers bled red ink during the tariff period, and the refunds look more like a rescue for balance sheets than a discount heading to showrooms.

Cox Automotive suggested the decision may over time reduce some tariff-driven inflationary pressure on the overall US economy, but noted the case impacts IEEPA tariffs and not the authority directly driving auto costs. That, Cox said, was Section 232 of the Trade Expansion Act of 1962, which allowed the government to impose tariffs on raw materials that go into building automobiles. Steel and aluminum duties, in other words, are still very much in play.

And the baseline was already ugly. Automakers have been paring back cheaper models to chase well-heeled customers who can afford big, loaded pickups and SUVs, and new cars now list for an average of nearly $50,000, up 30% in six years. Blaming recent profitability shortfalls entirely on tariffs is misguided, because automakers had already been raising prices by other means before the latest batch of duties were even being considered.

What Buyers Are Doing Instead

With new-car stickers refusing to budge, plenty of shoppers are rethinking the math. Many are turning to used cars, leasing, or holding onto their current vehicle longer while the refund process drags through CBP. That’s a rational response when you consider how uncertain the broader tariff picture still is.

After the Supreme Court ruling, Trump imposed a new 10 percent tariff in February under Section 122 of the Trade Act of 1974, which allows a president to impose tariffs of up to 15% for 150 days. In March, the US Trade Representative placed Section 301 tariffs under consideration targeting “discriminatory” or “unfair” trade practices by trade partners. So even as one set of duties unwinds, another is spinning up.

What Car Shoppers Should Watch Next

The refund process is a financial event for automakers, not a consumer rebate program. If you’re in the market, pay attention to incentives from individual brands over the coming months, especially from importers who took the biggest hits. Volkswagen, Hyundai, Kia, and even domestic brands with foreign-sourced parts may start using refund money to fund promotions or stabilize MSRPs rather than drop them outright. Watch lease deals too, since that’s often where automakers quietly pass along savings first. And don’t rule out a strong certified pre-owned vehicle if the new-car math still doesn’t work.