Wall Street firms are snapping up rights to possible tariff refunds from U.S. importers

Wall Street firms are snapping up rights to possible tariff refunds from U.S. importers, betting the Supreme Court will void President Donald Trump’s emergency duties and make the government repay tens of billions collected this year.

A small circle of hedge funds and niche finance shops is offering about 20 cents per dollar for claims tied to Trump’s “reciprocal” tariffs, and roughly 5 cents per dollar for levies on goods from Canada, Mexico, or China linked to fentanyl trafficking, according to Salvatore Stile, founder of Alba Wheels Up International, a New York customs broker.

The anti-drug claims draw lower bids because they’re seen as more likely to survive in court and thus less likely to be refunded. Investor focus has shifted to bigger packages: the minimum claim size has jumped from a few million dollars to around $10 million in recent days, Stile said. He declined to identify the funds, citing business confidentiality.

For companies that have absorbed most of the tariff costs, these arrangements offer quick cash. Investors aim to keep any remaining refund if the Supreme Court throws out the measures, according to four trade specialists familiar with the transactions.

Small businesses face uncertain choices

As quoted in a WSJ report, Stile said he has advised more than 20 importers on selling “tens of millions of dollars” in refund claims, and that many smaller firms are torn between waiting for a full repayment and taking a partial payout now. “The market is shifting literally daily. People don’t know what to do,” he said.

The dispute centers on two rounds of tariffs the president imposed under the International Emergency Economic Powers Act (IEEPA). The first, announced in February, targeted goods from China, Mexico, and Canada that the White House linked to the U.S. fentanyl crisis.

A second wave followed two months later and was framed as a response to the “national emergency” of persistent trade deficits. The Supreme Court has agreed to hear two related cases, with oral argument set for Nov. 5, as reported by Cryptopolitan. Both the administration and the plaintiffs, several importers and 12 Democratic state attorneys general, are seeking a fast ruling.

$80 billion at stake if court sides against tariffs

The stakes are high. If the justices side with the president, investors will lose what they paid for the claims. If earlier rulings against the tariffs are upheld, the Treasury Department may need to return about half of this year’s collections, Treasury Secretary Scott Bessent has said. Through June 30, importers paid about $80 billion tied to the emergency levies, according to Treasury data.

Adam Fazackerley of Lay-n-Go says tariffs add about $75,000 per container from China and roughly $50,000 on shipments from Cambodia. The Alexandria, Va., firm has cut from nine workers to three (including Fazackerley and his wife) and shelved plans with big retailers like Costco to focus on direct sales. With this year’s tariff bill in the “hundreds of thousands of dollars,” he’s keeping his claims; a refund would fund new products and marketing. “I cannot plan my business based on hopes.”

I operate as if that money, if it comes back to us, that’s fine. But we’ve had so many headwinds as a small business since 2018 that I can’t count on what I hope is going to happen,” he said.

A comparable market appeared during Trump’s first term, when thousands of importers challenged “Section 301” tariffs on Chinese goods. Firms such as Outpost Capital Partners of Southport, Connecticut, offered to buy refund rights in similar deals, according to a trade attorney. Managing partner Brian Coppola declined to comment.

Cantor Fitzgerald, Commerce Secretary Howard Lutnick’s former company, has also been linked to current IEEPA claims. In July, Wired reported that the firm, now run by Lutnick’s adult sons, had already purchased one importer’s rights and was prepared to buy up “several hundred million” dollars’ worth, citing internal documents. Danielle Popper, Cantor’s vice president for corporate communications, pointed to a prior statement saying the firm was not “taking views in litigation claims including tariffs.” The Commerce Department did not comment.

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