New Tariff Trades Show Wall Street Doubt Over Refund Payouts

Core Viewpoint - There are significant doubts regarding the potential for government refunds on tariffs imposed by Donald Trump, even if the US Supreme Court rules against these tariffs [1]. Group 1: Market Reactions - Major Wall Street firms have engaged in deals with companies that may qualify for reimbursement if the tariffs are deemed unlawful, with betting markets indicating a higher likelihood of this outcome following a recent hearing [2]. - The current trading prices for tariff-refund claims range from 10 to 25 cents on the dollar, reflecting only a slight increase since the Nov. 5 hearing, indicating ongoing uncertainty about the viability of these trades [3]. Group 2: Legal Context - The Supreme Court is deliberating whether Trump had the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), with a ruling against him potentially leading to full refunds [5]. - The refund process could be complex and lengthy, requiring importers to file individual claims for each affected shipment, which raises logistical concerns [5][6]. Group 3: Industry Insights - Investment firms such as King Street Capital Management, Anchorage Capital Advisors, and Fulcrum Capital Holdings are betting on tariff-refund claims, with brokers like Seaport Global Holdings and Jefferies Financial Group facilitating these trades [4]. - There are concerns about the time and complexity involved in recovering funds, as highlighted by industry experts, who note that the Supreme Court may rule against the tariffs without mandating refunds [6][7].