HEADLINE: $175 Billion in Illegal Tariff Revenue Accruing $700 Million Monthly in Interest, Cato Report Finds
LEAD: The U.S. Treasury is accumulating interest on $175 billion in tariff revenue ruled illegal by the Supreme Court, with refund delays costing American taxpayers approximately $700 million per month, according to a Cato Institute analysis released Monday.
BODY: Federal regulations require that overpayments of duties—including those deemed illegal—be returned with interest. U.S. Customs and Border Protection compounds interest daily at an annualized rate of 4.5% for overpayments exceeding $10,000 and 6% for smaller amounts.
Scott Lincicome, vice president of general economics at the Cato Institute's Stiefel Trade Policy Center, warned that mounting interest on these illegal tariffs will extend consumer pain beyond the original levies themselves.
A Federal Reserve Bank of New York report released last month found that American firms and consumers bore approximately 90% of the tariff costs imposed under the International Emergency Economic Powers Act last spring.
WHAT'S NEXT: The timeline for refunding the $175 billion and the final interest calculation remain unclear, leaving CFOs and importers uncertain about when capital will be recovered.
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