Cantor Fitzgerald, the financial outfit now helmed by the sons of Howard Lutnick, is diving into a speculative bet against Trump’s tariffs. These young guns at Cantor Fitzgerald & Co. are offering a chance to wager that the courts will eventually strike down these tariffs. They’re ready to buy up rights to potential refunds on hundreds of millions paid in tariffs. It’s a gamble on litigation outcomes, plain and simple.
Lutnick, who ran the firm for nearly three decades before joining the Trump administration, has been a vocal cheerleader for these tariffs, claiming they’d funnel “hundreds of billions” into U.S. coffers. He even suggested it could eliminate taxes for many Americans. But now, Lutnick’s old firm is betting against the very tariffs he supported. Interesting, isn’t it? Here’s what this really means: Cantor is hedging its bets, playing both sides of the field, a classic move when the political winds shift.
In documents seen by WIRED, Cantor is willing to trade tariff refund rights for 20-30% of what companies have already paid. So, if a company forked over $10 million, Cantor’s deal would give them $2-3 million upfront. They claim to have the capacity to handle hundreds of millions of these trades and are ready to scale up. Cantor’s already sealed a $10 million deal and expects more to roll in soon. Sounds like they’re banking on a legal win against the tariffs, which raises the question: what do they know that we don’t?
This is litigation finance, another way Wall Street finds profit in legal battles. These deals let companies get cash upfront or cover lawyer fees while investors bet on the outcome. The catch? Investors only pay a fraction of potential payouts, pocketing the difference if they win. It’s lucrative if the legal dice roll in their favor, but don’t forget, legal fights are long and messy.
Tim Meyer from Duke University highlights the irony: a firm linked to the Commerce Secretary betting against tariffs. He’s right—it’s telling about what insiders might really think about these policies. But the Commerce Department insists Lutnick is out of the loop, fully distanced from Cantor’s antics.
Cantor’s silence on the matter speaks volumes. Trump’s tariffs, targeting goods from countries like Mexico and Canada under the International Emergency Economic Powers Act, have sparked a flurry of lawsuits. One such suit saw small businesses challenging the administration, claiming presidential overreach. The trade court agreed, but the saga drags on with appeals, keeping tariffs intact for now.
Until a final ruling, companies must keep paying these tariffs, hoping for eventual refunds. Oral arguments are set soon, with a Supreme Court journey likely, meaning resolution is still far off. In the meantime, businesses argue the financial strain could be existential. The uncertainty and the red tape involved in claiming refunds make offers like Cantor’s tempting, despite potentially leaving money on the table later.
Ryan Petersen, CEO of Flexport, notes the tedious process of getting a refund under normal circumstances. Throw in the current chaos, and it’s no wonder some companies might jump at Cantor’s offer. When you’re staring down mounting financial pressures, a bird in the hand might just seem better than two in the bush.
