Wall Street has found a new bet: tariff refunds. Investors are snapping up the rights to potential tariff payouts, gambling that the Supreme Court will strike down Trump-era import taxes and trigger government refunds totaling tens of billions of dollars, reports the Washington Post. Some hedge fund and investment firms are offering importers about 20 cents on the dollar for claims on President Trump's "reciprocal" tariffs, justified by what Trump called a trade deficit "national emergency," and about 5 cents on the dollar for levies on goods from China, Mexico, and Canada, which are touted as anti-fentanyl measures and seen as more legally resilient.
For many importers, the deals offer a tempting lifeline after shouldering the brunt of tariffs, but it's a hard choice. If they take the offer and the Supreme Court tosses Trump's tariffs, investors will collect the full refund. On the other hand, there won't be an immediate payout. The refund process is likely to be complicated and slow, with the government potentially requiring formal refund petitions, or offering "store credit" for future tariffs rather than cash.
And as importers decide what to do, hedge funds' interest has raised the bar: they now want claims worth at least $10 million, compared to about $2 million just days ago, per the Post. "The market is shifting literally daily. People don't know what to do," Salvatore Stile, a New York customs broker, tells the outlet. The Supreme Court is set to hear challenges on Nov. 5. Treasury Secretary Scott Bessent has said about half of the tariffs collected this year could potentially be refunded, "which would be terrible for the Treasury," per CNN. Some $210 billion had been collected as of Aug. 24, the outlet reports.
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