IEEPA Tariff Claims can be Sold Now at a Discount
| IEEPA Tariff While the Supreme Court invalidated the Administration’s ability to impose tariffs under IEEPA (International Emergency Economic Powers Act), it was deliberately silent with respect to refunds. As the Administration’s stance is likely to be adversarial, it could take months if not years for businesses to receive IEEPA tariff refunds via conventional channels. Prior to the Supreme Court Ruling, Hedge Funds were purchasing IEEPA tariff claims at an average of only 22% of the total claim due to the high risks involved. After the Ruling, due to mitigation of some of the uncertainty, they are currently purchasing claims at 40% to 45% of the total claim. Instead of waiting 6, 12, 24 months or even longer to receive an IEEPA tariff refund, Hedge Funds can purchase claims within approximately 4 to 6 weeks depending on the quality of documentation assembled by the business. How the Process of Selling an IEEPA Tariff Claim Works Company X has paid ($10 Million) in tariffs since April 7, 2025Company X wants to de-risk prior to determination and finalization of the IEEPA tariff Refund Process. Company X sells (50%, 100%, or some other percentage) of its tariff ‘claim’ to Buyer A in the form of a participation. The Trade is nonrecourse to Company X as to the outcome of the Refund Process; but recourse to Company X only if the amount / validity of the claim is proven to be false, or too high. Process for Selling IEEPA Tariff Claims: Company X has paid $10 million in IEEPA Tariffs. Company X agrees to “sell” its tariff claim to Buyer for 45% of the claim amount, i.e. $4.5 million.. Buyer sends Seller a Confirm, and then ultimately a Participation Agreement which will govern the transaction. IMPORTANT – Company X retains its status as the “Plaintiff” / “Claimant” since these tariff claims are not transferable. Buyer might ask Company X to commence litigation for the return of the IEEPA tariffs paid. The rationale for this is that it is possible that only those parties who have commenced actual litigation are entitled to refunds. Thus, Company X will need to commence litigation in order to receive their refund.Buyer will continue to monitor the situation and inform Company X of developments.If and when the refund is received on the claim, Company X will receive the refund and forward to the Buyer. Key Points: Company X (as seller of the Claim) must be a financially healthy enough counterparty for Buyer A to enter into what could be a 2-to-3-year process of obtaining the refund. Legal fees are split going forward based on risk percentage. If Company X sells 100% today, Buyer A will pay 100% of legal costs today. Buyers are currently paying 40% to 45% to companies seeking to sell their IEEPA tariff claims. However, this is an evolving market and these percentages can either increase or decrease depending on the markets’ reaction to the Trump Administration’s expected obstructionism and the unresolved Court of International Trade’s procedural issues. Prior to the Supreme Court decision, buyers were purchasing tariff claims at an average of 22% due to the high risks involved. There would likely be an administrative process instituted such that companies that have paid these IEEPA tariffs will need to file special claims and wait to get refunded by the government. The process of receiving the refund payment from the government could take up to 12-to-18-to-24 months or even longer. Contact Chris Lehnes to learn if your client is a fit for this program |
Wall Street Traders Are Pouncing on the Tariff Refund Chaos
This details how investment firms are turning a legal and political mess into a new trading opportunity.
The situation stems from a recent Supreme Court ruling that tossed out several of President Trump’s sweeping tariffs. This has created a scramble for companies to claw back the levies they have already paid—estimated to be as high as $133 billion.
- The Rise of “Claims Trading”: Large corporations (like retailers and manufacturers) that paid billions in tariffs are now selling the rights to their potential government refunds to Wall Street investors.
- Why Companies Are Selling: Rather than waiting years for the government to process refunds or navigate complex litigation, companies are opting for immediate cash by selling their claims at a discount.
- The Players: Specialist investment firms—including King Street Capital Management, Anchorage Capital Advisors, and Fulcrum Capital—are among those pouncing on these claims. They are betting that they can eventually collect the full refund from the Treasury, netting a significant profit.
- Legal Uncertainty: The Supreme Court has not yet explicitly ruled on whether the government must issue refunds for the tariffs already collected. Despite this, investors are moving quickly to snap up these rights, treating them similarly to how they trade the debt of bankrupt companies.
- The “Chaos” Factor: The process is currently a “long, drawn-out mess” with high administrative hurdles. Traders are effectively providing a “liquidity service” to companies that want the tariff money back on their balance sheets now rather than later.
In short, while the reversal of the tariffs has caused massive administrative and fiscal confusion for the government, Wall Street has identified it as a lucrative new asset class.
Contact Chris Lehnes to learn if your client is a fit for this program
