Tariff Refunds: Net Customs Fall as FY2026 Deficit Widens

Tariff refunds sent nearly half of the duties importers paid in fiscal 2026 back out the door. The Monthly Treasury Statement from the Treasury Department's Bureau of the Fiscal Service, released Friday, Oct. 16, 2026, showed gross customs receipts of a record $317.8 billion for the year that ended Sept. 30, refunds of $144.6 billion and net receipts of $173.2 billion, against $194.9 billion in fiscal 2025. By TradeFlock's calculation, refunds equaled 45.5% of gross duties, up from about 4% a year earlier. The full-year deficit was $1,992.5 billion. TradeFlock's angle is that gap between what importers paid and what Treasury kept, scored against the Congressional Budget Office's Oct. 8 estimate and last year's actuals.

Customs Receipts After Refunds Versus CBO's $172 Billion Estimate

The Congressional Budget Office's Monthly Budget Review, published Oct. 8, estimated fiscal 2026 customs duties at $172 billion, down $22 billion, or 11%, from fiscal 2025. CBO said that figure was net of "about $130 billion" in refunds of duties collected under the International Emergency Economic Powers Act (IEEPA). It also estimated that September customs receipts fell $24 billion, or 83%, from a year earlier, "mainly because of IEEPA refunds."

Treasury's statement put net customs at $173.2 billion, about $1.2 billion above CBO's estimate. Refunds for the full year totaled $144.6 billion, about $15 billion more than CBO's figure of about $130 billion. Both gaps are TradeFlock calculations comparing CBO's rounded estimates with Treasury's figures.

Gross Duties Hit a Record, but Treasury Kept Less

Through August, the Monthly Treasury Statement on Fiscal Data showed gross customs receipts of $292.5 billion for the fiscal year, refunds of $125.2 billion and net receipts of $167.3 billion. For the same 11 months of fiscal 2025, net customs receipts were $165.2 billion. In the whole of fiscal 2025, gross customs receipts were $202.4 billion, refunds were $7.5 billion and net receipts were $194.9 billion.

By TradeFlock's calculation from those Treasury figures, refunds equaled about 43% of gross customs collections through August. September pushed the full-year share to 45.5%. Net customs receipts for the month were $5.9 billion, on gross collections of $25.3 billion and refunds of $19.4 billion, against $29.7 billion in net receipts in September 2025. Before the release, TradeFlock estimated September net customs at roughly $4.7 billion, the gap between CBO's $172 billion full-year figure and Treasury's $167.3 billion through August. That estimate was about $1.2 billion too low.

Where the Refund Money Went

The refunds flow through U.S. Customs and Border Protection's Consolidated Administration and Processing of Entries system, known as CAPE. In an Oct. 8 opinion certifying a class of importers in Freestyle World, Inc. v. United States, the U.S. Court of International Trade said that about $136.6 billion in potential and certified refunds had been accepted for processing in CAPE, and that about $126 billion in duties plus interest had been refunded, citing a CBP declaration with figures as of Oct. 2.

The court also wrote that if CAPE stopped working, "approximately $30 billion in unlawfully collected" duties would stay on deposit at Treasury. The class covers importers that paid the challenged IEEPA duties between Feb. 1, 2025, and Feb. 19, 2026, and did not file their own suits. The order does not itself require refunds. The Oct. 8 order set a closed conference for Oct. 13 and gave the parties until today, Thursday, Oct. 22, to jointly propose a schedule, including when the government will answer the class complaint. A TradeFlock check found no joint proposed schedule on the public docket as of Thursday afternoon in New York. It takes effect only once the court adopts it, and class-wide refunds would come after that, not with the filing itself.

For fiscal 2027, that is the open number. Any refunds paid on that remaining balance after Sept. 30 would reduce customs receipts in the new fiscal year rather than in fiscal 2026. TradeFlock has covered how retailers report tariff refunds in quarterly earnings, earlier estimates of a refund bill of up to $182 billion, and a Senate Democratic bill to force $175 billion in refunds.

The FY2026 Deficit Against CBO and Fiscal 2025

Treasury reported a fiscal 2026 deficit of $1,992.5 billion, with receipts of $5,403.3 billion and outlays of $7,395.8 billion. CBO's Oct. 8 estimate was a $1,993 billion deficit, $218 billion more than in fiscal 2025, with revenues up $169 billion, or 3%, and outlays up $386 billion, or 6%. Treasury's final fiscal 2025 statement showed a deficit of $1,775.4 billion, on receipts of $5,234.6 billion and outlays of $7,010.0 billion.

For September, Treasury reported a $26.9 billion deficit, compared with a $197.9 billion surplus in September 2025. Interest remained a larger driver than tariffs. Treasury's Table 9 put net interest at $1,051.8 billion for fiscal 2026, up from $970.4 billion, an increase of $81.4 billion, or 8.4%. That is nearly four times the $21.6 billion drop in net customs receipts, by TradeFlock's calculation from the same statement.

What to Watch Next on Tariff Refunds and Receipts

The next Monthly Treasury Statement, for October, will show the first fiscal 2027 customs figures and any refunds paid after Sept. 30. Fiscal Data's release calendar lists it for Nov. 12. In Freestyle World, the schedule the Court of International Trade adopts from the parties' Oct. 22 proposal will indicate how quickly remaining class members might be paid. Two nearer dates are unconfirmed. The CAPE Portal Guide, a refund tracking site, reports that the court's Oct. 8 order (ECF 60) requires a CBP progress report on CAPE by 5 p.m. ET on Monday, Oct. 26, and sets a closed conference for Tuesday, Oct. 27. TradeFlock has not seen that order, so both dates may differ or move.

Cover photo: U.S. Custom House, Canal Street, New Orleans, July 1963, by Dan Leyrer for the Historic American Buildings Survey, Library of Congress, public domain, via Wikimedia Commons (cropped).