President Donald Trump’s global tariffs are in limbo. The U.S. Court of Appeals for the Federal Circuit ruled that many of the tariffs are illegal because Trump overstepped his authority using the International Emergency Economic Powers Act (IEEPA), NPR reported.
The act was created in the ’70s to give the president power to respond and “regulate a variety of economic transactions” in the event of a national emergency, per Congress. While the decision was split seven to four, the court stated that Trump overreached.
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Nothing is set in stone yet, but the final judgment will be made on Oct. 14, 2025, giving Trump the chance to appeal. As of Aug. 24, 2005, American businesses have paid $210 billion in tariffs, CNN reported, and it may have to be repaid.
So what does all of this mean for your wallet? Experts weigh in.
Possible Price Drops in the Short Term
Danny Ray, founder of PinnacleQuote, “The Life Insurance Experts,” said costs could actually drop.
“Above all, tariffs are essentially taxes placed on imported goods, which companies often pass down to buyers through higher prices,” he explained. “If refunds are issued, businesses could lower their costs, and in fact, consumers might see relief in the price of everyday items like electronics, clothing and groceries. That means your wallet stretches further at the checkout line.”
Some industries might choose to pass that relief to consumers with lower prices, especially in competitive markets like retail and electronics, though they wouldn’t have to.
“The refund itself wouldn’t directly cause prices to drop across the board, because businesses set prices based on more than just tariffs. However, repaying tariffs could give companies back a massive amount of capital,” Ray said.
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Brace for Rising Prices at the Checkout Over the Long Term
According to Ray, in the short term, consumers might see lower prices on certain imported goods. But long term could be a different story. The payout could fuel inflation, which could push overall prices higher and squeeze wallets again.
It’s important to point out that “injecting $200 billion back into the economy could increase the money supply in circulation,” Ray said. “In fact, that sudden flood of capital could stoke inflationary pressures, meaning higher prices for goods and services in the long run.”
“Higher prices at all checkout lines will be guaranteed,” said Peter Diamond, a federally licensed tax, accounting, real estate and structure expert and Certified Bankability Expert. “Consumers will pay higher prices for everything from groceries to cars, appliances, electronics, etc.”
Diamond said to think of the payback as a “backdoor tax increase.”
“Inflation will be up, that’s a guarantee,” he said.
Will Taxpayers Pick Up the Tab?
Even if prices drop for consumers in the short term, Americans may pay in other ways.
“A massive payout would come from taxpayer dollars, and over time, this could increase the national deficit and pressure the government to adjust budgets, potentially leading to higher taxes or reduced public services,” Ray said.
The financial ripple effect of Trump’s tariffs could be felt in every aspect of the American economy — including your bank account. The fallout from the legal battle over Trump’s tariffs could cause budgets to tighten even more. Now’s a smart time to set a little extra money aside and stay informed.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 3 Ways Paying Back Trump’s Tariffs Could Impact Your Wallet
