On the finish of February, Rep. Jamie Raskin, rating member of the Home Judiciary Committee, despatched a letter to Commerce Secretary Howard Lutnick and his son Brandon Lutnick, who took over as chair of monetary providers agency Cantor Fitzgerald, changing his father as high brass when Lutnick took a spot on President Donald Trump’s cupboard.
Raskin demanded an investigation into Cantor Fitzgerald, which he alleged had engaged in shopping for the rights to tariff refunds from U.S. corporations, providing these corporations a fraction of how a lot they’d paid in levies in alternate for everything of their tariff refund sum.
The letter cited reporting from Wired from July 2025, which stated inner paperwork revealed the agency not solely had “the capacity to trade up to several hundred million of these presently and can likely upsize that in the future to meet potential demand” however it has already put by way of a commerce representing about $10 million of IEEPA rights.
Howard Lutnick was an early champion of tariffs who advocated for the levies to switch some earnings taxes. On account of the Lutnicks’ shut ties with each the Trump administration and Cantor Fitzgerald, the financial institution may have had entry to nonpublic data that may have knowledgeable a choice to commerce tariff refunds, Raskin claimed.
“That potential conflict of interest raises some troubling questions of federal ethics and insider trading,” he wrote. “Was the Lutnick family’s cornering of the market in this doomed endeavor a mere coincidence or something more orchestrated?”
Cantor Fitzgerald denied collaborating in any trades on the tariff refund secondary market.
“Cantor Fitzgerald has never executed any transactions or taken any position on tariffs refund claims,” a spokesperson instructed Fortune in an announcement. “In July 2025, certain Cantor salespeople explored brokering tariff trades, but Cantor never executed any transactions. All reports to the contrary are false. We will reiterate these points in our response to Ranking Member Raskin.”
Raskin’s scrutiny of the Lutnick household has delivered to the floor a wholly authorized and rising secondary marketplace for tariff refunds that has quietly emerged because the levies below the Worldwide Emergency Financial Powers Act have come below hearth, culminating within the Supreme Courtroom putting down the tariffs final month.
With the probability of as much as $180 billion in tariff income on the desk to be refunded to U.S. corporations and shoppers—who’ve been proven to have paid for almost all of the import taxes—funding corporations, hedge funds, and liquidation specialists are salivating on the alternative to make thousands and thousands from the mere potential of those refunds occurring.
“Speculative markets are gambling, right?” David Warrick, government vice chairman of supply-chain threat administration agency Overhaul, instructed Fortune. “They basically look at it and say, ‘Is it going to be red or black?’ And they obviously saw an opportunity whereby, ‘If this goes the way we think it might go, the money that we could make is tremendous.’”
Betting huge on tariff refunds
Like all speculative commerce, the secondary tariff refund market was a results of merchants deciding to take a chance, on this case on the IEEPA tariffs being deemed unlawful, necessitating the distribution of the tariff income. Importers approached hedge fund and different funding agency brokers, and in return for a few quarter, give or take, of the cash they spent on tariffs, offered the rights to their refunds. If the refunds got here, these buyers would see everything of the returns.
For some U.S. corporations hit arduous by tariffs and subsequent supply-chain woes in want of money move, the prospect of instant aid was interesting, stated Alex Hennick, president and CEO of A.D. Hennick and Associates, specializing in distressed asset restoration and liquidation methods. For others, the choice to promote the refund rights was price it to not take care of shelling out sources for a authorized staff or the headache of understanding after which present process the method to obtain the refunds.
“These hedge funds and these firms are really working closely with the government,” Hennick instructed Fortune. “They’ve done some of these processes in the past. It’s not something that’s brand new.”
This market emerged in earnest final fall, following the Supreme Courtroom deciding to listen to the case towards IEEPA tariffs in September, signalling to speculators there was an actual shot of the tariffs being struck down. The Supreme Courtroom’s ruling, nonetheless, sealed the deal for these buyers.
“The ruling pretty much said that they were right,” Hennick stated. “It’s just a matter of going through that process and trying to recover as much as possible.”
There’s no actual greenback determine on the scale of the market at this level, however Hennick instructed Fortune that wherever between 15% to 50% of the claims might be offered or assigned to liquidation specialists or hedge funds. Overhaul government Warrick stated the market may swell to as massive as $100 billion.
Possibilities of seeing returns
The Supreme Courtroom’s ruling doesn’t imply the danger on this market is gone. The choice omitted any particulars concerning the refunds, leaving it as much as decrease courts, such because the Courtroom of Worldwide Commerce, to stipulate the method of how they’d be doled out. Trump, for his half, has signalled he would struggle the refunds, saying they may take years to litigate in courtroom. Decide Richard Eaton of the U.S. Courtroom of Worldwide Commerce dominated on Wednesday that importers have been entitled to tariff refunds.
“It’s very difficult to define a probability of success for the likelihood that folks will receive refunds,” Wes Harrell, a dealer and head of a buying and selling group at Seaport International, instructed Fortune. “While I do believe that it will ultimately occur, I think that the big question is in what form and the timing, and how contentious it may be in the roadblocks or impediments that they may put up in order to receive a refund.”
Rathna Sharad, CEO of logistics platform FlavorCloud, stated regardless of the course of, it is going to have some arduous parts due to the sheer dimension of the greenback quantity. The U.S. has needed to dole out tariffs following lapses within the Generalized System of Preferences (GSP), which outlines import tax reductions for sure nations, although these refunds have traditionally been a lot smaller, about $3 billion at a time.
“There is no precedent to having done anything like this before,” Sharad instructed Fortune. “So it’s not going to be any kind of automated mailing checks back to folks that paid.”
How onerous this course of is will assist decide for corporations in the event that they wish to search a refund, promote tariff refund rights, or simply not hassle in any respect. Importers are the entities eligible for refunds, and plenty of instances, retailers will not be the direct importers. There could also be handshake offers or contracts that decide refunds corporations are eligible for. With out correct file maintaining from an organization (which can even have seen tariff charges on their product change over the course of the 12 months), the method of making use of for refunds may grow to be tougher.
“People are still trying to figure out where they shake out on this. Let the dust settle. Do some work. Talk to attorneys,” Harrell stated. “It just feels like early days.”
