Tariff Refund Market Heats Up After Supreme Court Ruling
Washington, D.C. – February 20, 2026 – Following the U.S. Supreme Court’s ruling against President Trump’s emergency tariffs, a previously niche market for trading potential tax refund claims has experienced a surge in activity. Importers are increasingly exploring options to monetize potential refunds, while investors are drawn to the asset class’s independence from broader market trends.
Supreme Court Blocks Trump Tariffs
The Supreme Court invalidated President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to unilaterally impose tariffs on most U.S. Trading partners. The 6-3 decision centered on tariffs aimed at curbing the flow of fentanyl and broader “reciprocal” tariffs. Chief Justice John Roberts, writing for the majority, asserted that the power to impose tariffs rests solely with Congress.
President Trump reacted strongly to the ruling, calling it a “disgrace” and indicating his administration would resist issuing refunds.
The Rise of “Special Situation” Trades
Companies that paid the tariffs are now evaluating their options for seeking refunds, potentially totaling an estimated $175 billion collected since February. Many have begun selling the rights to future tax refunds to investors in deals known as “special situation” trades. This allows companies to receive immediate capital, albeit at a discount, while transferring the risk and potential reward of the refund process to investors.
Transaction Prices Soar
Interest in this market has dramatically increased since the Supreme Court’s decision. According to Amy Passacreta, a lawyer at Orrick specializing in restructuring, transaction prices have jumped from very low levels to between 40% and 50% of face value. Prior to the ruling, prices for fentanyl duty claims traded around 16% to 17%, while reciprocal duty claims were priced at 26% to 28%.
Passacreta noted that the price gap between the two types of tariffs has narrowed since the ruling, as the likelihood of refunds for both categories is being reassessed.
Corporate Response and Uncertainty
Mark Bissell, CEO of vacuum cleaner maker Bissell, reported receiving numerous inquiries about selling refund rights, with offers increasing by 45% since Wednesday. However, Bissell has opted to wait and observe if the Trump administration will issue full refunds. “I thought we wouldn’t make it back at all last year, so if we make it back, that’s a bonus,” he said.
Looking Ahead
The future of tariff refunds remains uncertain, dependent on the Trump administration’s response and potential further legal challenges. The surge in the “special situation” trade market reflects a growing expectation that some refunds will eventually be issued, but also acknowledges the inherent risks and complexities involved. The market will continue to be closely watched as the situation unfolds.