Until recently, tariffs were one of the main sources of growth in US budget revenues.
Now the situation looks almost the opposite.
In July 2026, the American treasury receivednegative net result for customs duties: instead of revenues, the budget was faced with large payments for returns. Reuters reports that in July alone, the net outflow of customs duties amounted to about$8.55 billion. The reason is large-scale refunds to importers after the Supreme Court decision on tariffs introduced in 2025.
And here an awkward question arises:
If the government returns money to businesses that companies previously paid in tariffs, why don't prices in stores return to their previous levels?
The answer is much more interesting than the graph itself.
$5–8 billion to negative revenues
If you look at the dynamics of US customs duties, the contrast is almost impossible to miss.
In 2020–2024, monthly receipts were primarily in the area$5–8 billion. Then a sharp increase began.
At its peak, monthly collections approached$31 billion.
After this, the graph turned around so sharply that in 2026 the bars had already gone below zero.
At first glance, this can be taken as a simple story:
tariffs were introduced → the budget received more money → tariffs were canceled → revenues disappeared.
But in reality something more complex happened.
Negative values do not mean that American companies suddenly stopped paying any customs duties. They reflect the situation whenrefunds on previously paid duties exceed current receipts.
And this is where the main part of the story begins.
A tariff is not a bill for a foreign country
One of the most common mistakes when talking about tariffs is to frame them as money that a foreign manufacturer simply transfers to the US government.
In practice, a tariff is levied when a product is imported into the United States.
It is paid by the American importer or the party responsible for customs clearance. Then the company decides how to distribute the additional cost.
There are several options:
accept part of the costs;
reduce margins;
negotiate with the supplier to reduce the price;
replace the supplier;
increase the wholesale price;
pass on the costs to the final buyer.
In practice, a significant part of the tariff burden actually reached consumers.
A Federal Reserve study released in 2026 found that the 2025 tariffs were gradually passed through to consumer prices. Researchers estimate that by February 2026 they had raised prices for basic goods by approximately3,1%, and core inflation as a whole by approximately0.8 percentage points. The researchers also concluded that the pass-through of tariff costs into prices was essentially complete at this point.
That is, the scheme turned out to be much simpler than the promise “foreigners will pay”:
tariff → cost increase → price increase → consumer.
But now a second question arises.
What happens when the tariff is canceled?
Let's imagine a simple example.
The company imported goods for $100.
After the introduction of the tariff, its cost increased, conditionally, to $120. To maintain the economics of the business, the company raised the price for the buyer.
After some time, the tariff is canceled.
Costs are falling again.
But the price in the store does not have to automatically return from $120 to $100.
Why?
Because price is not an accounting formula “cost plus tariff”.
It depends on demand, competition, inventory, wages, logistics, rent, marketing and - most importantly - onwhat price is the market ready to pay?.
If the customer continues to buy the product at the new price, the company has no automatic economic reason to immediately return the old price.
That is why reducing inflation and lowering the price level are completely different processes.
Inflation may slow down. Prices - no
This is one of the most important points for understanding the entire story.
Let's say the product cost $100.
After the tariff shock, it rose to $110.
Then the tariff was canceled, but the price remained at $110.
Inflation stops accelerating at this point.
But the product itself remains10% more expensivethan before the tariff shock.
That is why the fight against inflation does not mean an automatic return of the economy to the previous price level.
The Fed has already recorded a gradual slowdown in the tariff impact on prices in 2026. But this means first of all a weakeninggrowth rate, rather than a massive return of prices to pre-tariff levels.
It turns out to be a paradox:
the tariff disappears from current expenses, but its trace may remain in the price of the product.
Now comes the fun part: where do the returns go?
Following a U.S. Supreme Court decision in February 2026, massive tariffs imposed by the Donald Trump administration under emergency powers under IEEPA were overturned. The court found that the president exceeded the powers granted by law.
After this, the process of returning previously paid funds to importers began.
And the amounts turned out to be huge.
According to data released in August 2026, CBP was already processing hundreds of thousands of refund applications, and the total volume of refunds filed was in the tens of billions of dollars. The largest American companies began to reflect this money in their financial results.
And here a paradox arises:
the consumer could pay a higher price in 2025, and in 2026 it is not he who receives the refund, but the importer.
Legally, this is understandable: it was the importer who paid the customs duty to the state.
Economically, the situation is much more interesting.
Will the consumer get their money back?
Not necessarily.
Some companies actually plan to channel some of their returns to customers through price reductions or direct refunds. For example, a number of large retailers and carriers have already considered returns as a way to partially offset the tariff burden for customers.
But there is no universal mechanism that forces the company to return the entire difference to the buyer.
Therefore, several scenarios are possible at once.
Scenario No. 1 - price reduction.
The company receives the return and passes on part of the benefit to the buyer.
Scenario No. 2 - margin restoration.
The company has already raised prices, and returns reduce its costs. As a result, profits increase.
Scenario #3 - combination.
Part of the return remains with the business, part is used for discounts and customer retention.
It is the third scenario that may be the most realistic for many companies.
Why it matters for corporate profits
Tariff refunds are not just a line item on government accounts.
For a business, it can be an unexpected financial bonus.
If a company has already adjusted prices to the new cost structure and then gets back some of the rates it previously paid, its bottom line may improve.
And this is already reflected in profits.
In August 2026, it was reported that more than 40 companies from the S&P 500 had already disclosed about$9.6 billion in tariff refunds, including about $2.1 billion received in cash. Major recipients included Apple, Nike, FedEx, Amazon and GM.
This results in an unusual sequence:
the consumer pays a higher price → the company receives a tariff refund → the government records negative customs revenues.
This does not mean that every company automatically receives “excess profits.” But the mechanism is indeed capable of temporarily improving the corporate economy where prices have already risen and the tariff burden has disappeared.
But there is an important caveat
It would be wrong to say thatthe entire amount of tariffs turned into net corporate profit.
Companies also incurred other costs: logistics, supply chain realignment, supplier changes, currency risks, inventory holding and demand uncertainty.
In addition, some businesses actually reduce prices or refund customers.
The Fed study shows another side of the story: the rise in prices due to tariffs was accompanied by a reduction in household spending by about4%in the most affected categories. The burden was especially noticeable for households with less disposable income.
That is, it is not just about who received the return.
It's aboutwho bore the economic burden at the time the tariff was in effect.
Why this story matters to markets
There are several signals here for investors.
1. Inflation
If the tariff shock does gradually fade, this could reduce pressure on commodity prices.
This is a positive for the Federal Reserve.
But if companies keep their prices elevated, the decline in inflation will be slower than the removal of tariffs would suggest.
2. Company profits
Returns may temporarily support profits for individual importers and retailers.
Therefore, the quarterly results of companies that received significant amounts from CBP should be considered in light of the fact thatwhat part of the profit is operating and what part is related to returns.
3. Consumer demand
Higher prices have already changed consumer behavior.
The Fed's research shows that consumers weren't just paying more—they were also cutting back on purchases and switching to cheaper alternatives.
If prices remain elevated, this effect could continue even after some tariffs are eliminated.
4. US Budget
Negative values on the chart are an important signal for American finance.
When the government relies on tariffs as a source of revenue and is then forced to return previously collected funds, the fiscal effect is reversed.
In July 2026, it was tariff refunds that became one of the factors behind weak budget revenues and an increase in the deficit.
The main paradox of tariff history
Tariff policy was supposed to solve one problem: make imports more expensive and change economic incentives.
But she had an unexpected second act.
First, tariffs increased the cost of imports.
The business then transferred much of that value into prices.
Consumers started paying more.
After this, some of the tariffs were canceled by court decision.
And the state is now returning to importers the money that was collected earlier.
At the same timeprices do not have to return to the original level.
That's why the US customs revenue schedule is not just a tax collection schedule.
This is a visual story abouthow the cost of trade policy can move between government, business and consumer.
And while some people look at the red bars and see a drop in tariff revenues, the market must look deeper:
who got the refund, who kept the increased price and who ended up paying for the initial shock?
The answer to these three questions may be much more important than the fact that tariffs are eliminated.
What does this mean for the market?
If tariff pressure does continue to ease, the main potential beneficiary could be the consumer sector: lower costs could support demand and reduce inflationary pressure.
But if companies maintain higher prices while receiving returns, the effect will be distributed differently - through increased margins and profits.
Therefore, in the nearest company reports and macroeconomic statistics, it is worth monitoring not only the inflation level itself.
It is important to look at where the effect of tariffs moves after they are lifted: into prices, company margins, or back to the consumer.
This is where the next stage of tariff history is now located.
