The US Supreme Court's recent ruling on Donald Trump's tariffs has sent shockwaves throughout the business community, with nearly $175bn on the line. As companies vie for a refund, law firms, hedge funds, and AI companies are poised to reap the benefits.
According to Joseph Spraragen, a seasoned New York-based attorney, his phone has been ringing off the hook since the ruling, with hundreds of businesses seeking advice on how to secure their share of the estimated $175bn tariff refund pot. Spraragen's firm, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt (GDLSK), has spent months filing lawsuits for heavy-hitter clients, including luxury brands Prada and Dolce & Gabbana.
As reported by The Guardian, the Supreme Court's decision has deemed Trump's tariffs illegal, opening the floodgates for businesses to seek refunds. Already, FedEx, L'Oreal, and Dyson have sued for refunds, and clients are now looking for trade lawyers at an unprecedented rate.
Jennifer Hillman, a law professor at Georgetown University and former general counsel for the US trade representative office, notes that the only winners from this trade war have been the lawyers. The complexities of Trump's tariffs have put trade lawyers into overdrive, with compliance costs shooting through the roof.
Law Firms Spring into Action
With the Supreme Court's ruling opening the door to a major fee stream, law firms across the country have been springing into action. Quinn Emanuel Urquhart & Sullivan, a sprawling firm with 1,300 lawyers, has launched its own "Tariff Refund Task Force", promising to "pursue refunds aggressively" for business clients.
The final legal fees likely to pour from tariff refund cases are hard to calculate, but some firms are advertising "flat fees" to get cases filed in court, a sum that is likely to cost businesses $10,000-$15,000 a pop, according to Nicole Bivens Collinson, head of international trade at law firm Sandler Travis and Rosenberg.
Hedge Funds Enter the Fray
Not everyone should take the legal route, however. Hillman explains that most importers should be able to retrospectively change the tax rate applied to imported items before the charges are formally settled with customs. But that could be a hefty administrative task, and firms with bigger sums on the line, and influential shareholders to appease, will face pressure to do everything they can to get every dime they are owed.
Hedge funds are now swooping in to buy up rights to tariff refunds, with firms such as Jefferies, Oppenheimer, and Seaport Global Securities reportedly brokering deals. Richard O'Neill, a partner in the Seattle office of customs and trade law firm Neville Peterson, notes that hedge funds have been looking to scoop up these claims since before the Supreme Court's ruling.
AI Firms Join the Mix
Some AI firms are also rumoured to be muscling in, offering to process people's applications in exchange for cuts of any future refunds. Hillman explains that these firms are saying, "I'll do all the work for you, but then I get 20%".
There are separate concerns about opportunists in the legal sector, with less experienced lawyers willing to take on claims despite having little previous history in trade or customer law. O'Neill advises importers to go with a law firm that actually litigates these issues.
A Two-Tier System Emerges
For now, those with the experience are trying to keep their heads above water. Brian Janovitz, a Washington-based trade lawyer at DLA Piper, has been fielding a non-stop wave of calls and emails from clients since the ruling. He notes that it is probably a "prudent step" for clients to go to court if they want to ensure they are covering all their bases and maximising their chance of getting a refund.
Ultimately, though, any complaints about legal fees should be aimed at the Trump administration, Hillman says. The question remains whether companies will pass on any of those returns to consumers, barring any legal orders. Whether any companies will be pressured into lowering their prices or providing a "tariff rebate day" remains to be seen.
