Indeed, consumers might even hope for lower prices if corporations pass on the influx of cash. But Treasury Secretary Scott Bessent has already suggested consumers will be waiting a while—if not forever—for the cash to trickle its way back into their pockets.
He continued: “My sense is that could be dragged out for weeks, months, years, so … we’ll see what happens there.” Bessent continued that using alternative methods like Section 232 (national security justification) or Section 301 (unfair trade practices) means tariff revenue generation won’t drop or slow. But on the IEEPA revenues, he added: “I got a feeling the American people won’t see it.”
UBS’s chief economist Paul Donovan told clients this morning that any hopes of businesses passing the rebates back through to consumers may be naive: “Tariff rebates will increase the U.S. fiscal deficit, and act as a fiscal stimulus. Any rebates will be paid to U.S. importers (as they are the ones who made payments to the U.S. Treasury). With new tariffs coming in, it seems unlikely anyone will rush to lower prices to their customers.”
What businesses may be able to look forward to is a lower effective tariff rate.
In the immediate aftermath of the ruling, the Trump team confirmed it would be enforcing a 15% tariff rate under Section 122 of the 1974 Trade Act, which allows for levies to be enforced for 150 days—allowing the White House to get its ducks in a row to enforce the duties in the longer term.
“The [Deutsche Bank] house view [is] that we continue to expect the effective tariff rate to fall in 2026,” added Deutsche Jim Reid to clients this morning. “Indeed, since October the average customs duty collected has already declined by around two percentage points, to roughly 11%, largely due to carve outs and exemptions. Some of this easing has been attributed to the administration’s weak showing in local elections in early November, highlighting the domestic political constraints on another aggressive tariff escalation.”
