The phone call came at dawn from a tire shop owner in Las Cruces. He’d laid off three workers in six months. His supplier in Juárez had doubled prices after the tariffs hit. Now he was asking New Mexico State Treasurer Laura Montoya a question she couldn’t answer: when would someone make this right?
That same morning, Montoya joined three other state treasurers on a video call that felt more like a damage assessment briefing than a press conference. Colorado’s Dave Young. Minnesota’s Julie Blaha. Vermont’s Mike Pieciak. All of them were staring at the same wreckage—a year’s worth of economic pain triggered by what the White House once called “Liberation Day.”
On April 2, 2025, President Donald Trump announced sweeping tariffs framed as economic patriotism. The Supreme Court later ruled them illegal. But the money—$166 billion at last count from state attorneys general, now climbing by roughly $24 million in interest each day—has vanished into federal coffers with no clear path back to the households that paid it.
“We risk destroying American industry from the inside out,” Montoya said during Wednesday’s call, organized by For the Long Term, a nonprofit focused on state fiscal policy. Her voice carried the edge of someone who’d been hearing stories like the tire shop owner’s for months.
New Mexico sits in a particularly exposed position. The state shares a 180-mile border with Mexico and relies heavily on cross-border trade for everything from automotive parts to agricultural goods. Poverty rates here have consistently tracked above the national average—around 18 percent compared to roughly 12 percent nationwide, according to U.S. Census Bureau data. When costs rise even modestly, the ripple effect is swift and severe.
For the Long Term released a report Wednesday estimating that the tariffs eliminated 200,000 blue-collar jobs nationwide and cost the average American household an additional $1,700 between February 2025 and January 2026. Those figures don’t capture the secondary losses—the contractors who stopped getting calls, the small exporters shut out of markets by retaliatory tariffs from Mexico and Canada, the families who deferred medical care because groceries suddenly cost more.
“No court ruling can undo the damage that’s already been done,” Pieciak said during the briefing. He’s dealt with economic fallout before, but this felt different. Courts can declare policies unconstitutional. They can halt future enforcement. What they can’t do is rewind time or refund billions collected under a legal theory that no longer exists.
The coalition’s call came weeks after attorneys general from multiple states, including New Mexico’s Raúl Torrez, sent a March letter to Congress requesting legislative action on refunds. The letter was precise in its ask: return the money to businesses and citizens who paid under what turned out to be an unlawful scheme. Congress has not responded with meaningful legislation.
Montoya said her office remains “open to hearing” suggestions about how to pursue those refunds at the state level, though the mechanics remain unclear. State treasurers manage public funds and investments. They don’t typically claw back federal revenue. That would require either congressional appropriation or a legal mechanism no one has successfully tested.
“This is not chump change,” Montoya added. For a state like New Mexico, with a population just over two million, even a proportional share of $166 billion represents significant economic relief—money that could stabilize small businesses, reduce household debt, or fund infrastructure that tariff-inflated costs have delayed.
The tariffs were sold as a tool to strengthen domestic manufacturing and reduce dependency on foreign supply chains. In practice, they functioned more like a consumption tax. American companies importing steel, aluminum, and finished goods paid the tariffs upfront, then passed costs to consumers. Retailers raised prices. Manufacturers squeezed margins or cut payrolls. According to International Monetary Fund analysis, tariffs of this scale typically reduce GDP growth by 0.3 to 0.5 percentage points in the first year.
Trump’s team framed the policy as fiscal conservatism—a way to force trading partners into renegotiating deals favorable to the U.S. Montoya didn’t mince words about that narrative. “The president, who prides himself on having mastered the art of the deal, and his administration, who baselessly laud each other for their so-called fiscal conservatism, failed in their own ambitions and delivered yet another poor performance that cost Americans more than they can afford.”
What’s striking about this coalition isn’t its partisan makeup—though all four treasurers are Democrats—but its focus on the mundane mechanics of economic harm. They’re not debating trade theory. They’re talking about lost paychecks and compounding interest. They’re asking who pays when policy becomes litigation becomes a Supreme Court rebuke, but the money still doesn’t come back.
Vermont’s economy, heavily reliant on Canadian trade, saw dairy and maple syrup exports plummet under retaliatory tariffs. Minnesota’s agricultural sector faced similar pressures. Colorado’s construction industry dealt with inflated material costs that stalled housing projects. Each state absorbed the shock differently, but the pattern held: costs went up, jobs disappeared, and households adjusted by spending less.
The question now is whether political will exists to correct it. Refunding $166 billion—plus interest—would require Congress to appropriate funds in an election year, attached to a policy the previous administration still defends. Legislative mechanisms exist for tax rebates and emergency relief payments, but deploying them here would mean admitting the tariffs were both illegal and economically destructive.
State treasurers don’t command armies or negotiate treaties. They manage pension funds and bond ratings. But they also see, in granular detail, what happens when federal policy misfires. Montoya’s office tracks revenue streams, monitors municipal debt, and fields calls from business owners who can’t make payroll.
That tire shop owner in Las Cruces is still waiting for an answer. So are the 200,000 workers who lost jobs, and the millions of households that stretched budgets to absorb an extra $1,700 in costs. The Supreme Court said the tariffs were wrong. Congress hasn’t said what comes next. And every day that passes, the bill grows by another $24 million.
