US Companies Sell Tariff Refund Rights Amid Supreme Court Case

A specialized Wall Street market has emerged where U.S. companies sell the rights to potential government tariff refunds to outside investors, typically hedge funds. These deals provide companies with immediate liquidity in exchange for forfeiting the majority of any eventual refund if the Supreme Court rules that President Donald Trump's emergency tariffs were unconstitutional. If the court upholds the tariffs, the companies keep the upfront payment and investors receive nothing.

Atlanta-based Kids2 recently received $2 million from a Boston-based hedge fund, a deal brokered by Jefferies LLC. The payment represents a small fraction of $15 million the company paid in customs, with Kids2 accepting rates between 9 and 23 cents on the dollar for tariffs tied to the International Emergency Economic Powers Act and fentanyl-related imports.

Industry reactions to these special situations trades are divided. Kids2 CFO Mark Mintman characterized the move as a prudent cost recovery action. Conversely, Bissell Inc. CEO Mark Bissell declined similar offers, expressing skepticism that the administration would simply implement alternative tax collection methods if the current tariffs were overturned. The White House maintains confidence in the legal merits of the tariffs, while President Trump warned that a court ruling against them would be an "economic disaster."