Importers who were hit by Donald Trump’s "Liberation Day" tariffs are now selling their tariff refund claims to hedge funds at a discount, turning a court-ordered payout into immediate cash while they wait for the government to pay. The market opened after the U.S. Supreme Court struck down the tariffs in February, but no one knows how long the Trump administration will take to send money back.
U.S. importers paid $166 billion in extra duties at the border before the tariffs were struck down, and the claims being traded now typically carry a face value of $10 million to $25 million. Smaller refunds under $5 million are having trouble finding buyers, while larger claims from high-quality sellers can fetch as much as 70 cents on the dollar. Before the Supreme Court ruling, tariff refunds were selling for 20 to 40 cents on the dollar.
Wes Harrell, who tracks the market, said the Supreme Court decision “unlocked the market” and that the past month has been spent by importers getting their documents in order, talking to trade counsel and deciding how best to protect their rights in the litigation and refund process. He said some companies are selling 50 percent to 75 percent of their refund “in an effort to hedge out some of the legal and process uncertainty.”
The trade has drawn hedge funds backed by upwards of $30 billion apiece, including King Street and Fulcrum Capital, while Oppenheimer and Stifel are brokering deals. Peter Albano said Oppenheimer has seen growing demand from importers over the past year, as cash flow and day-to-day operations were squeezed by the tariffs, and that the bank has helped turn a future payment into working capital. Neil Shapiro said Stifel continues to see strong demand for tariff-related recoveries.
Some firms are also exploring using the tariff refund as collateral for bank loans, a sign that they are looking for liquidity now rather than waiting for direct payment from Washington. That leaves the market defined by a simple tradeoff: sell now at a discount, or hold out for the full refund and hope the government moves quickly.