Trump's "Liberation Day" Tariffs Cost Small Businesses $151 Billion -- And He Still Won't Pay Refunds

The "Liberation" That Cost $151 Billion

President Trump's April 2025 executive order imposing emergency tariffs on America's major trading partners was supposed to protect "American businesses and workers." One year later, those businesses have a different story to tell -- and $151 billion in receipts to prove it.

According to analysis by small business advocacy group We Pay the Tariffs, American companies paid that staggering sum under tariffs the Supreme Court has since ruled were applied illegally. The tariffs were collected under the International Emergency Economic Powers Act, which the Court determined Trump misused. The U.S. Court of International Trade ordered refunds.

The administration has not issued a single dollar in refunds. Instead, Trump imposed new tariffs on steel, aluminum, and pharmaceuticals to replace the ones courts overturned.

Small Businesses Absorb What Big Box Stores Can Shrug Off

Houston's Misfit Toys illustrates the squeeze facing small retailers. The vintage toy shop built its business on collectibles, but owner Daniel Rivera says new merchandise tied to summer blockbusters and Christmas drives foot traffic. Since the tariffs hit, he cannot afford to stock those items.

"The big box retailers will be fine," Rivera said. "People go to Target, also for soap and, you know, drinks and food. And while they're there, the kids will grab a toy. But here we will not be getting any of that summer action, any of that money."

Rivera's wife and operations manager Paulina Gamino explained the math: Toys that once sold for $25 now cost $40 to $45. Target and Walmart can absorb tariff costs. Mom-and-pop stores cannot.

"Our gross sales have gone up. We are able to employ more people, but our profits have gone down a lot," Gamino said. The store has pivoted harder into vintage collectibles, buying from laid-off Houston tech workers forced to liquidate their collections.

Uncertainty Freezes Purchases

The tariff chaos creates problems beyond higher prices. Kacie Wright manages Houghton Horns, a brass instrument shop near Fort Worth that sells student instruments from China and professional models from Germany, the UK, and Japan.

"We've had to raise prices," Wright said. "We've been paying about 40%, and we absorbed some of that and raised prices about 20%, but then we also had to cut out accessories. They used to come with mouthpieces and cleaning kits, and now you just get the instrument and the case, so the customers are paying 20% more for less."

Worse than the price hikes is the uncertainty. Custom instruments take three to four months to build, with backlogs adding over a year to delivery. Tariffs can change overnight.

"If a customer wants to order a custom trombone from us, we can say, 'Well, at current pricing, it might be $7,000, but then the tariffs could change tomorrow, and your price could end up being $6,000 or $9,000,'" Wright explained. "So, if a customer wants to place an order now, we have no idea what price to charge them."

That uncertainty is freezing purchases. Customers delay orders rather than gamble on what the final price will be.

The Pattern: Illegal Orders, No Accountability

Luis Torres, a senior business economist for the Federal Reserve Bank of Dallas, confirmed what small business owners are reporting: "You can see those comments of how those costs, those tariffs, you know, they've impacted them, costing increased selling prices, margin losses, also the uncertainty surrounding them."

The Supreme Court ruling that Trump's tariffs were illegal should have ended this. Instead, the administration simply imposed new tariffs under different legal authorities while refusing to refund the $151 billion collected under the overturned orders.

This is the pattern: executive overreach, court losses, zero accountability. Small businesses paid the price for Trump's illegal tariffs. They are still waiting for their money back. They will likely keep waiting while the administration finds new ways to impose the same costs under different names.

"Liberation Day" liberated American small businesses from $151 billion. The courts said that was illegal. The administration does not care.