Prices investors will pay for tariff refund claims surge after Supreme Court decision
By Timothy Aeppel and Laura Matthews
Feb 24 (Reuters) – The prices importers can get from selling their rights to possible government refunds rose after the U.S. Supreme Court ruled that President Donald Trump’s emergency tariffs were illegal.
The high court has not ruled on repaying the estimated $175 billion the government has received since last February, but many businesses are now preparing for possibly complex legal battles to make such claims.
Many companies have hedged their bets in recent months by selling some or all of their potential paybacks to outside investors for a fraction of their face value. Companies are holding on to these advance payments because the court ruled the taxes were illegal, and outside investors are poised to collect whatever is eventually returned.
These deals, known as “special situation” transactions, are attractive to investors because the assets are not correlated with broader markets, according to legal sources who work with buyers and sellers in the market.
Amy Pasacreta, a lawyer from Orrick’s restructuring team, said that they have seen an increase in interest in this opaque market since the decision was made, and prices have risen to the 40-50% range after much lower levels in previous transactions.
Orrick began seeing demand for refunds shortly after the tariffs were implemented in April.
The court case involved two types of emergency tariffs: those aimed at blocking fentanyl imports and a broader range of “reciprocal” tariffs. Fentanyl tariffs were thought by some analysts to be more likely to be approved and were sold cheaper. Pasacreta said the two categories have become closer together since Friday.
Before the decision, buyers were paying 16-17% for fentanyl tariff claims and 26-28% for reciprocal tariff claims.
“The reason we are not seeing higher (prices) is because the uncertainty is still there,” Pasacreta said. “This administration has stated that it will fight the refunds.”
Mark Bissell, CEO of vacuum maker Bissell Inc., said the company had been contacted repeatedly since Friday about the possibility of selling its return rights, and that the offered price had indeed risen to 45%.
“Our name stands out because we’re on a higher volume of (imported) containers,” he said, “so we’re on a list that a lot of people see.”
But he still refuses to sell. He prefers to wait and see if he gets a full refund from the Trump administration. “We spent the last year thinking we wouldn’t get anything back, so if we got it back it would be a bonus,” he said.
(Reporting by Timothy Aeppel and Laura Matthews; Editing by Lincoln Feast)
