The Trump Administration Wrongly Took $160 Billion and Won’t Give it Back

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Hey everyone, Ellie here, wishing you a happy Friday. Well, the war in Iran continued to be the dominant story in the news this week. And while that's happening, there continues to be mayhem and unraveling at the United States Department of Justice. It's flown a bit beneath the radar, understandably, because we are all rightly focused on Iran.

There were a trifecta of stories this week from DOJ that all basically paint the same bottom line picture. First of all, We learned that political folks at DOJ have been pressing career-line-level prosecutors, those who work there for a living, regardless of politics. To indict John Brennan, something to do with alleged false testimony he gave over the origins of yes, the steel dossier. That thing will never go away.

Anytime you have political folks pushing for an indictment and the career folks pushing back My money's gonna be with the career folks. So they may indict this like the others, Letitia James, Jim Comey. Or try to indict uh Mark Kelly, uh, but I suspect this one, given the track record, will fail as well. That's one story. We also saw that DOJ has subpoenaed and obtained raw ballots from Arizona.

From the twenty twenty election. And yes, we did a piece a couple weeks ago about the search warrant in Georgia. I expressed my suspicions then. I don't see any good faith basis to believe a crime was committed. Never a cr mind a crime. that could still be prosecuted more than five years after the fact. So that's Story number two. And then finally we learn this week that Ed Martin

Oh gosh, you all know how I feel about this guy. I did a piece right when he was appointed calling him the most dangerous prosecutor in America. This is the guy who was briefly the US attorney in DC and now has all these various jobs. in DOJ, including the pardon attorney, although he is reportedly on his way out. Thank goodness. Well, Ed Martin is now facing potential

ethics sanctions over of all the things he did, and he did a lot of bad, he basically threatened Georgetown Law School if they don't get rid of DEI. He never defined that term. Then he would punish their students by not letting them work at his office, the US Attorney's office in DC, and maybe cutting off federal funding. Now, why is that an ethics violation, aside from just being an offensive, ridiculous thing to say, is because every lawyer takes an oath to uphold the Constitution?

And that conduct violated allegedly Georgetown's First Amendment right to free speech, Fifth Amendment right to due process. I have to tell you, I'm a little wary of this trend where people are trying to strip away the law licenses of any lawyers who do things they don't like. And I'm a little mixed on Ed Martin. I'm not mixed on who he is. I mean, I've been foremost out there blasting the guy. I think he's a charlatan. I think he has no business being a prosecutor.

I'm not so sure stripping away people's law licenses, and he still has a process to go through, but I think we may be getting a little carried away with that. I mean, if the argument is, well, he did something that violated someone's constitutional rights. I mean prosecutors and cops do that all the time. Judges will find that search violated the Fourth Amendment right.

The affidavit that you wrote, prosecutor, to get that search warrant was insufficient under the Fourth Amendment and therefore violated the defendant's rights. Are we gonna strip all of them of their law licenses? Of course not. Now Ed Martin is worse. But we have to focus on the specific allegations here. So let's see how that one plays out. We'll keep an eye on this. And of course, the common thread in all of these stories is the continued decline and disintegration of DOJ and the loss.

or or not even loss, but the voluntary relinquishment of its independence, we are seeing no respite from this continued storyline. Okay.

Now, shifting gears to this week, I wanna bring us back to the tariff decision from a few weeks ago because there's been some really important developments that I wanna update you on since then. This is a very high stakes fight. And I think it says a lot about where we are. As always, love to hear your thoughts, questions, comments. Send them in to letters at cafe dot com. After the Supreme Court struck down his emergency liberation day tariffs last month.

Donald Trump had a public meltdown. The president delivered a 44-minute diatribe that expertly blended falsehoods, quote, the court has been swayed by foreign interests, end quote. ad hominem bile. The justices are, quote, an embarrassment to their families, and quote, And Freudian non-sequitur, quote, I want to be a good boy. Yes, I double and triple check that he actually said, I want to be a good boy. Um, I don't know. Okay.

Yet through the toxic bluster, Trump did offer one cogent observation. When asked whether the federal government would refund the tariff money it had already collected, he responded, quote, They take months and months to write an opinion, and they don't even discuss that point. Wouldn't you think they would have put one sentence in there saying that keep the money or don't keep the money, right? End quote. On this point, and only this point, Trump was spot on.

Indeed, one might reasonably have expected the justices to address the obvious question about what happens with the over$160 billion already paid under the invalidated tariff. And that's more than the combined annual budgets of the Department of Justice, Department of Homeland Security, the EPA, and NASA, again, combined. Yet, even after a cross-ideological majority of the Supreme Court ruled that the tariffs were unconstitutional, the Trump administration still wants to keep the cash.

Now, as the next round of litigation begins, with US-based importers suing to recover the money they wrongly paid, it's becoming increasingly clear that Trump will lose. By the way, despite repeated false claims by the president and others that foreign countries pay tariffs, they do not. American businesses pay when they import tariffed goods.

In its hundred seventy page set of rulings rejecting Trump's tariffs under the International Emergency Economic Powers Act, sometimes not so catchily called the AIPA. The court conspicuously left unanswered a major question that it knew would linger over the case. At oral argument in November 2025, the justices spent substantial time puzzling over what would happen with all that money if they were to strike down the tariff.

Yet when the decision dropped, three months later, the court decided not to decide. Must be nice, by the way. If a thorny issue presents itself, just ignore it. The only mention of the looming refund dilemma came in the dissenting opinion of Justice Brett Kavanaugh, who correctly noted that it would create, and I quote, a mess.

Now the tariff repayment issue has begun to make its way through the courts, and it seems clear that that mess will ultimately be resolved against the Trump administration. A Tennessee based filtration company sued the federal government to recover its tariff payments And Federal Judge Richard Eaton of the Court of International Trade did the plaintiff one better.

The judge ruled that not only the filtration company, but quote, all importers of record, again, quote, all importers of record who paid those AIPA tariffs are entitled to full refunds plus interest accruing since the payments were made. Judge Eaton's decision to grant universal relief reflects the reality that for many smaller US importers, the cost of litigation would likely exceed their refund amount.

Now, if the initial ruling holds, those businesses can get their tariff payments back without the need to hire attorneys or file lawsuits. The Trump administration absolutely could have unilaterally decided and still could decide to pay the tariff money back. Instead, it is made clear that it will offer no such voluntary accommodation, reasonable as it might seem. When asked when the administration would choose to repay the invalidated AIPA tariffs, for example.

Treasury Secretary Scott Besson repeatedly demurred, misleadingly claiming that, quote, it is not up to me or the administration, but rather to the court. Nor will the Trump administration accede lightly to court rulings requiring repayment. Lawyers for the Trump administration immediately asked Judge Eaton to put his own ruling on hold. He declined. Administration lawyers are now virtually certain to appeal to the intermediate Federal Circuit and perhaps eventually to the U.S. Supreme Court.

But this is a losing battle, politically and legally. A fifth grader can readily understand the fundamental fairness issue presented here. If I give you money to pay for something, but then that thing turned out not to validly exist. You should give me my money back. The technical legal analysis isn't much more complicated than that.

As Judge Eaton pointedly noted to the administration's lawyers, quote, the Supreme Court told you what your position is. Your position is we're going to refund this money. It can't be anything else, end quote. Indeed, it's tough to imagine the federal courts, including the Supreme Court, ultimately finding that, yes, Trump's AIPA tariffs were unconstitutional, but the government can keep all the proceeds anyway.

The administration apparently begs to differ and will continue to press its case in court.

But the longer the administration fights the inevitable, the more it will cost the American taxpayer and erode public support. The libertarian, and if anything, conservative leaning Cato Institute estimates that accruing interest on the outstanding tariff money will cost American taxpayers$23 million per day until the repayment issue is resolved. Trump's tariffs were already unpopular in NBC News poll released this week.

showed that 55% of all respondents believe the tariffs have hurt the economy, while only 33% say they have helped. Those numbers will only get worse for the administration as it refuses to return improperly obtained tariff proceeds to American businesses. at a rolling cost to taxpayers of over$150 million per week. As US importers try to recoup their tariff payments, a separate but related question will arise.

What about consumers who collectively bore the financial brunt of tariffs by paying higher prices? While it's easy to root for American businesses as they seek refunds from the federal government, the end result is that those importers will likely wind up reaping a substantial windfall. while individual purchasers stand to recover little, if any, of the extra money they spent on consumer goods.

Let's consider an example. Imagine that during the 10-month lifespan of Trump's AIPA tariffs, a US-based business that sells bicycles made in China paid$100,000 in tariffs to the federal government. That company, like most American businesses, then pass the extra cost on to consumers by raising the price of its bicycles from, say,$500 to$600 each. The company has already sold some number of bicycles at that elevated$600 price point, including the extra$100 per bike to cover the tariff.

And now, on top of that, the company will likely receive a refund for the full$100,000 that it paid in tariffs in the first place. Private businesses certainly can choose to refund their customers any extra money charged and paid because of the tariff.

But don't count on bottom line focused companies to do that. Consumers can sue the companies, or perhaps the federal government, but it's tough to imagine that the cost of litigation would be worth the potential recovery to any individual who purchased goods at a higher price. Still, of all the parties who can stake some claim to the$160 plus billion dollars in AIPA tariffs, the federal government, which wrongly imposed them in the first place, has the weakest claim of all to keep the money.

Any rational decision maker understands that sometimes the best move is to cut losses, even if it stings a bit. But the Trump administration, still fuming about its loss in the Supreme Court, has chosen to dig in on the tariff refund issue. This is a futile act of symbolic protest, a costly temper tantrum that promises to backfire in the courts and beyond. Thanks for listening everyone. Stay safe and stay informed.