Firms impacted by the overturning of Trump's "Liberation Day" tariffs are borrowing against their expected refunds as the government builds a refund system, a creative but risky stopgap.
When the U.S. Supreme Court ruled in February that President Donald Trump's sweeping "Liberation Day" tariffs were unlawful, it didn't just reset trade policy, it put billions of dollars of previously collected duties in limbo and triggered a once‑in‑a‑generation refund process.
Reuters, citing economists at the Penn‑Wharton Budget Model, reported that more than $175 billion in U.S. tariff collections could be subject to refunds after the court rejected the legal authority under the International Emergency Economic Powers Act (IEEPA).
Those tariffs, which applied to a wide range of imports and were paid by more than 330,000 importers, were declared illegal as the government lacked congressional authority for such sweeping levies.
But there's a big gap between winning a legal argument and getting refunded cash. U.S. Customs and Border Protection (CBP) is still building a new claims processing system, known in industry circles as a refund portal, to vet and pay back these duties. According to the outlet, the portal is being rolled out in phases and could take up to 45 days or more to process claims once they begin, with a phase‑in approach that prioritizes recent entries.
In the early rollout, CBP reported over 26,000 importers had registered to seek refunds, but that still leaves many companies waiting for clarity on when and how much they might recover.
Now, Some Firms Are Turning Claims Into Cash Today
Rather than waiting, possibly years, for a refund check, some affected companies are tapping financial markets. According to Investing.com, importers are using their pending tariff refund claims as collateral for short-term loans. Under these arrangements, banks, hedge funds, and private lending firms lend cash now, secured by the value of refund claims that have yet to be paid.
"There's a lot of money looking to be deployed," said Raniero D'Aversa, partner at law firm Orrick, which advises on these transactions, quoted by Investing.com.
Structurally, these deals can mimic traditional corporate loans: the importer keeps ownership of the refund claim (instead of selling it at a discount), repays lenders once the government pays, and often accrues interest that is either paid in cash or payment‑in‑kind (added to the loan itself), notes Investing.com.
Risks and Rewards
This financing gives companies liquidity now, helping cover payroll, suppliers, inventory, and other operating costs, essentially serving as bridge financing during a long administrative process. According to Investing.com, many importers would otherwise have to sell their claims at steep discounts or wait indefinitely.
But the strategy is far from risk‑free. Interest rates on these deals can be high, and if refunds are delayed, reduced, or contested, borrowers remain obligated to repay lenders. Investing.com also reports that lenders typically require significant collateral and strict underwriting standards to protect themselves.
Trade finance experts caution that the refund process itself remains complex and legally unsettled. The phased CBP rollout, varying timelines, and ongoing litigation in federal trade courts shape how quickly funds actually reach importers, according to Reuters.
For many businesses, especially small and mid‑sized importers, these loans are less about profiting and more about survival. One corporate treasurer, speaking on background, told Reuters: "We're not counting the money as cash yet, but we can count it as hope, and that's sometimes enough to keep the lights on."
