Bill instructs the Trump Administration to prioritize small businesses; requires full refund with interest of illegal Trump tariffs in 180 days

February 24, 2026 - WASHINGTON, D.C. — On Monday, U.S. Senator Alex Padilla joined Senate Finance Committee Ranking Member Ron Wyden (D-Ore.), Small Business Committee Ranking Member Edward J. Markey (D-Mass.), and Foreign Relations Committee Ranking Member Jeanne Shaheen (D-N.H.) in introducing a bill to require full refunds of Trump’s illegal tariffs after they were struck down by the U.S. Supreme Court on Friday by a 6-3 vote.

To date, the Trump Administration has collected an estimated $175 billion in illegal tariff revenue, raising taxes on products from nearly every country on earth, and jacking up prices for American families. The Tariff Refund Act of 2026 would require the full refund, with interest, of those funds.

“The Supreme Court confirmed what Senate Democrats have been saying for months: Donald Trump’s emergency tariffs were nothing more than an illegal tax on American businesses and consumers,” said Senator Padilla. “Trump’s tariff wars have raised Californians’ costs on everything from groceries to energy bills while devastating our national economy and supply chains. We must ensure that hardworking Americans and small businesses who have footed the bill for Trump’s disastrous economic agenda immediately get their money back.”

“Trump’s illegal tax scheme has already done lasting damage to American families, small businesses and manufacturers who have been hammered by wave after wave of new Trump tariffs,” said Senator Wyden. “Senate Democrats will continue fighting to rein in Donald Trump’s price-hiking trade and economic policies. A crucial first step is helping people who need it most, by putting money back in the pockets of small businesses and manufacturers as soon as possible.”

“Trump’s illegal tariff taxes cost small businesses, consumers, and families up to $175 billion. That money must be repaid immediately. For small businesses with little to no resources, this refund process can be extremely difficult and time consuming,” said Senator Markey. “That is why I am proud to introduce the Tariff Refund Act with Senators Wyden and Shaheen. Our bill would require the tariffs to be refunded and level the playing field—putting small importers and small businesses first in the refund process and eliminating needless administrative barriers. It’s Main Street and working families that paid Trump’s tariff taxes, and we must ensure they get their money back—not big corporations.”

“President Trump’s reckless and chaotic tariffs have only caused uncertainty and pain—raising prices on consumers and businesses when they can least afford it,” said Senator Shaheen. “Now that the Supreme Court has made it clear that the President did not have the authority to unilaterally impose sweeping emergency tariffs, it’s critical that American families and small businesses get the relief they need. That starts by President Trump refunding the illegally collected tariff taxes that Americans were forced to pay.”

In addition to Padilla, the bill is also cosponsored by Democratic Leader Chuck Schumer (D-N.Y.) and Senators Angela Alsobrooks (D-Md.), Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn.), Maria Cantwell (D-Wash.), Chris Coons (D-Del.), Dick Durbin (D-Ill.), John Hickenlooper (D-Colo.), Mazie Hirono (D-Hawaii), Tim Kaine (D-Va.), Andy Kim (D-N.J.), Angus King (I-Maine), Ben Ray Luján (D-N.M.), Patty Murray (D-Wash.), Jacky Rosen (D-Nev.), Adam Schiff (D-Calif.), Chris Van Hollen (D-Md.), and Mark Warner (D-Va.).

The Trump Administration previously recognized that it must refund, with interest, any duties determined to have been unlawfully collected. However, it is unclear what timeline, process, or other guidelines the Administration would follow to provide refunds — and the lack of a clear, accessible process would necessarily advantage large importers with resources to dedicate to outside counsel and consultants.

The Tariff Refund Act of 2026 would ensure that U.S. Customs and Border Protection (CBP) completes the payment of refunds quickly and prioritizes the interests of small businesses in that process. Importantly, the bill would ensure that importers are not required to take costly administrative steps to receive a refund of the tariffs unlawfully collected by the Administration. The bill would also direct CBP to coordinate with the Small Business Administration (SBA) to provide information and technical support. Finally, the bill’s reporting requirements would provide Congress, which has constitutional authority over trade and tariffs, with proper oversight over the refund payment process.

Specifically, the Tariff Refund Act of 2026:

• Requires CBP to pay refunds of all tariffs that were unlawfully imposed by the President under the International Emergency Economic Powers Act (IEEPA) and paid by importers — even if the importation has already been finalized and closed (“liquidated”) by CBP.
• Sets a deadline of 180 days after enactment for CBP to process all refunds.
• Requires CBP to pay interest on the refunded amount.
• Directs CBP to prioritize small businesses when paying refunds and to coordinate with the SBA to provide key information on the refund process to small businesses.
• Requires CBP to report every 30 days to relevant Congressional committees on the status of refunds until CBP has completed the payment of all refunds.
• Directs CBP to issue guidance on how to address duty drawback claims.
• Expresses the Sense of Congress that importers, wholesalers, and large corporations should pass on those refunds to their customers.

Senator Padilla has strongly opposed Trump’s harmful tariff policies that have raised costs across the board for millions of working-class families. Last year, Senators Padilla, Murray, and Wyden hosted a virtual press call alongside Port of Long Beach Chief Executive Officer Mario Cordero and other West Coast port leaders to sound the alarm on the dramatic decline of container ships making the trip to West Coast ports and the harmful consequences of Trump’s reckless tariffs across the American economy. These tariffs have devastated California’s ports, including the Ports of Los Angeles and Long Beach (San Pedro ports) — which receive 40 percent of the nation’s imports — impacting the entire U.S. economy. During a speech on the Senate floor last year, Senator Padilla similarly criticized Trump’s cruel tariffs and their impacts on the San Pedro ports, emphasizing the devastation they would cause American families and the national economy. Padilla also proposed a concurrent resolution that would simply demand basic transparency by requiring that any tariff used to offset tax cuts for the wealthy be explicitly written into the Republicans’ partisan budget reconciliation bill.

Full text of the bill is available here.

Source: Senator Alex Padilla