\n<\/p>\n
Last week, I paid a $26.05 tariff on a small purchase from the United Kingdom. On August 29, a federal appeals court ruled that the U.S. government had no right to take that money. It allowed the tariff to remain in place until October, pending further litigation. But the Trump administration has lost every round of this fight to date. If it keeps losing, the question will sooner or later arise: What happens to my $26.05?<\/p>\n
In a filing with the court of appeals, Treasury Secretary Scott Bessent said that overturning Donald Trump\u2019s tariffs would count as a \u201cdangerous diplomatic embarrassment.\u201d And Commerce Secretary Howard Lutnick warned that an about-face would have \u201cdevastating and dire consequences.\u201d One of those consequences might be that the U.S. government would suddenly owe tens of millions of Americans hundreds of millions of dollars, and, in that scenario, would face total administrative chaos repaying the money it wrongfully took.<\/p>\n
I didn\u2019t pay my $26.05 to the U.S. government. I paid it to the shipper, who in turn (I presume) remitted one big check to the U.S. government. How does that process get reversed? It\u2019s easy to type an answer: The U.S. government should refund one big check to the shipper, who will in turn reverse all of its small credit-card collections to its customers. In real life, however, that is not so easily done.<\/p>\n
This particular shipper, DHL, has exited the U.S. market because of the havoc created by Trump\u2019s tariffs. In April, DHL stopped shipping packages worth more than $800 to the United States. In August, it quit the under-$800 business too. By sheer chance, my U.K. order was placed on DHL\u2019s last package-shipping day to the United States, August 22.<\/p>\n
If the Trump administration is compelled to undo its tariff regime, it will have to send a new message to DHL: Remember how you quit the U.S. market so as not to deal with our unpredictable and intolerable regulatory burden? Guess what, suckers? !uitting did not save you. You have to redo all that burden you fled to escape. But this time, you have to do it backwards. <\/p>\n
Maybe DHL has the technology to cope with a small-dollar refund obligation. But what about all of those companies that collected money that\u2019s much harder to trace? Almost every U.S. producer of almost every good and service is paying more for almost every input because of Trump\u2019s tariffs. But determining who paid what to whom and when will create a tangle of claims and counterclaims.<\/p>\n
The U.S. government collected $94 billion in tariff revenue in the first half of 2025. Not all of that money was taken illegally, but most of it was. How big a tax is that? Trump\u2019s One Big Beautiful Bill Act contained a provision advertised as \u201cno tax on tips.\u201d This measure is projected to reduce federal revenues by $32 billion over 10 years. (It expires in 2028 but could be renewed.) So Trump\u2019s illegal tax collections in the first half of 2025 exceeded the total value of his most touted concession to low-income Americans by at least two to one, and probably closer to three to one.<\/p>\n
Creating a huge mess is a consistent Trump method. Over and over again, the administration commits to actions at, or beyond, the outermost limit of executive power, then confronts the courts with a risk of chaos if the limits are enforced. Thousands of individuals have been detained and imprisoned without due process, including the opportunity to argue that the authorities have mistaken their identity or ignored their lawful-residency status. If the courts allow these detentions, then habeas corpus is more or less dead in America. If the courts refuse, brace yourself for a tsunami of wrongful-arrest litigation. If Trump is allowed to keep the proceeds of his illegal taxes, then Congress has lost the power of the purse and Article I of the Constitution has been repealed. If Trump must return his illegal taxes, then millions of disgorgement actions will follow. I probably won\u2019t sue for my $26.05. But I\u2019ll sign my claim over to any class-action attorney who wants it.<\/p>\n
Trump is chaos. So President Bill Clinton warned at the Democratic convention in 2024. So it is proving true, on a scale that is only beginning to come into view.<\/p>\n","protected":false},"excerpt":{"rendered":"
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