They Bet Against Trump's Tariffs. Now They Stand to Make Millions

When Trump introduced sweeping tariffs on foreign goods last April, hedge funds and specialist investment firms began to bet on the possibility that the courts might rule that he had violated the law. They did that by purchasing the right to theoretical tariff refunds at cents on the dollar from struggling importers who wanted to swap the possibility of a future refund for an immediate cash payment.

“We were like, [Trump] is capriciously applying the law,” says Thomas Braziel, founder of investment firm 117 Partners, who says he purchased $925,000 worth of tariff refund claims with his own money. “That was the play.”

This trade was brokered by a variety of Wall Street firms. Though only a select few hedge funds engaged in the trade, those that did generally bought tens of millions of dollars worth of claims, says Neil Seiden, president at Asset Enhancement Solutions, one of the ...