U.S. consumers keep getting hosed by Trump’s topsy-turvy trade war

Pity the American consumer.

Our stateside cousins are paying the price for U.S. President Donald Trump’s tumultuous trade policies after all. So much for his oft-repeated claim that “a tariff is a tax on a foreign country” that would enrich the United States.

“A lot of people like to say, ‘Oh, it’s a tax on us.’ No, no, no,” Mr. Trump said at a Pennsylvania campaign rally in August, 2024.

“It’s a tax on a foreign country. It’s a tax on a country that is ripping us off and stealing our jobs. And it’s a tax that doesn’t affect our country.”

Here’s a shocker: The “Tariff Man” was wrong.

The Tax Foundation, a think tank based in Washington, is keeping track of how much Mr. Trump’s ever-shifting tariff policies are costing the good ol’ U.S. of A.

It estimates that U.S. tariff policy has already been modified more than 50 times during his second presidential term. Even so, the non-profit organization found that U.S. court-ordered tariff refunds have obliterated tariff revenues since May.

The U.S. government recorded negative customs-duty revenue in May and June because total refunds surpassed collected tariffs. Those losses amounted to US$40-million in May and a whopping US$25.6-billion in June, according to the foundation’s research.

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Recall that back in February, the U.S. Supreme Court struck down tariffs collected under the International Emergency Economic Powers Act, or IEEPA, including a 35-per-cent levy on some Canadian goods.

In doing so, the high court ruled that Mr. Trump overstepped his presidential authority by unilaterally imposing those duties.

Since that time, the U.S. government has been ordered by the courts to refund those illegal duties. They amounted to an estimated US$165-billion before the Supreme Court ruling, according to the foundation.

Its research, published on Aug. 3, stated that customs refunds totalled roughly US$71-billion for May and June, adding that IEEPA tariffs comprised much of the reimbursed money.

Reuters separately reported on Thursday that refunds climbed to roughly US$100-billion at the end of July, citing a new court filing. That amount includes duties plus interest.

The news agency’s report, however, did not specify the amount of duties collected by the U.S. government in July, so it is unclear if net customs revenue was negative again last month.

Although it appears that more than half of the illegal IEEPA tariffs have now been refunded to U.S. importers, most consumers have not gotten their money back, despite being the ones who absorbed the resulting price increases at the cash register or online.

To their credit, some companies, including Cards Against Humanity, FedEx and UPS, have promised to return tariff refunds to consumers.

“If you overpaid for one of our games, click the button below and fill out the form,” Cards Against Humanity states in an otherwise profanity-filled message on its refund site.

“Then, when the Trump Administration gives us our tariff refund, we won’t keep it: we’ll give 100% of the money back to you, our loyal customers, who actually make our business possible.”

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Most U.S. businesses, though, have not compensated customers for price increases. That, in turn, has given rise to a flurry of Hail-Mary class-action lawsuits by jilted customers.

That brings us back to the Tax Foundation’s analysis, which correctly points out that “refunds will do little to reverse the damage imposed by the Trump administration’s tariffs.”

In addition to aggrieved consumers, the think tank notes that tariff uncertainty hinders business investment, stifles hiring and unnecessarily complicates pricing decisions for companies.

“The economic damage from a chaotic tariff regime can outweigh the revenue itself, and unlike the tariffs, it cannot be refunded,” it states.

The foundation, which both monitors and forecasts the economic repercussions of Mr. Trump’s evolving trade policies, also argues that both imposed and impending tariffs amount to a tax hit on consumers.

As of July 24, it estimates the average tax increase for every U.S. household is US$900 for 2026. That amount includes the expected impact of the threatened Section 338 tariffs on Canadian alcoholic beverages, hockey sticks and other products, starting Aug. 19.

In 2025, however, Mr. Trump’s tariffs amounted to an average tax increase of US$1,000 a household, the foundation said.

Back in March, it warned that Mr. Trump’s tariffs risked counteracting tax cuts contained in the One Big Beautiful Bill Act, disproportionately affecting lower- and middle-income people.

Imagine that.

Mr. Trump has long claimed that tariffs would max out U.S. economic power. It was supposed to be a global flex. But as predicted, American consumers are footing the bill instead.