The tariff was illegal. The refund isn't yours.

Tariffs. That's all the shop owner said.

I was buying my son a bike last spring, and the price had jumped since winter. He shrugged. I shrugged. I paid.

In February, the Supreme Court ruled those emergency tariffs illegal. The government had collected about $166 billion under them, from roughly 330,000 importers.

So the money goes back. But it doesn't come back to me.

The refund goes to the importer of record, the company named on the customs paperwork. The shop owner didn't import that bike. I certainly didn't.

And the refund carries interest. Customs pays corporations about 6% a year, compounded daily, from the day they paid the duty. The 10-year Treasury pays a little under 5%.

Refunds started flowing in May. By September 11, customs had paid out or accepted about $134.7 billion, interest included, according to its own court filing.

Some of that money isn't going to importers at all.

A year ago, before any ruling, a few hedge funds started buying the rights to these refunds. A New York customs broker said they offered about 20 cents on the dollar.

Importers took the deal. They needed cash, and the case looked like a long shot.

Then the court ruled. By April, a partner at Sidley Austin said claims traded upwards of 80 cents. The payout is the full dollar… plus interest.

I have no idea how much of the $166 billion ended up with funds. Nobody publishes that number.

But I know who paid the tariff. I was standing at the counter.

The tariff refunds go to whoever filed the customs paperwork. So the Atlanta Fed asked those companies what they plan to do with the money.

It surveyed 1,156 executives between August 10 and 21. About a quarter said their company qualifies. For those firms, the refund averages 1.7% of a year's revenue.

Executives could pick more than one use. 75.2% said they'll hold at least some as cash. 52.5% said capital projects or research.

Then the customer. 17.2% plan rebates. 14.8% plan to lower prices.

Prices went up when the tariff arrived. Most of them aren't coming down now it's gone.

Some are passing it on. Walmart has pledged to use its refund to cut prices. FedEx and UPS set up refund channels for their customers. They're the exception.

And here's where it spreads. The court threw out one set of tariffs. It didn't end tariffs.

After the ruling, the administration turned to other legal authorities. The new list includes tariffs of up to 12.5% on imports from 86 countries, and 50% on a range of Canadian products.

In August, customs collections exceeded refund repayments for the first time since the refunds began. Refunds are slowing. New duties are building.

So the same shelf of goods is carrying a new tariff while the old one flows back to importers and their buyers.

The shopper pays at the register both times. The refund only runs one way.

Meanwhile, the claims turned into a credit product.

Law firm Troutman Pepper Locke described term loans secured by refund claims. Lenders advance about half the claim's value. Minimum loans run around $10 million, backed by claims roughly twice that size.

The interest is often payment-in-kind. The borrower pays nothing in cash. The loan just grows until the government pays out.

Troutman says some claim trades ran from tens of millions to more than $100 million. It also warns the figures come from press accounts and should be treated as indicative.

Not every dollar moves on time. As of August 21, about $1.7 billion across 22,170 refunds sat stuck because importers hadn't filed bank details. The interest keeps compounding.

Three more things worth keeping track of…

Qatar sold $3 billion of five- and ten-year bonds on September 22, its first public deal this year. The ten-year priced just 65 basis points over Treasuries, 30 tighter than first guidance. Meanwhile its LNG export revenue fell from $9 billion in the first quarter to $200 million in the second, per its finance ministry. Economists surveyed by Bloomberg expect the economy to shrink 12.1% this year, the worst forecast in their survey. A $580 billion wealth fund buys a lot of patience.

A supertanker carrying Gulf crude to Asia now earns a record of about $1.27 million a day on the spot market. The same class of ship on a one-year charter earns about $135,000 a day. That's a gap of more than nine times. Ten-year-old supertankers now sell for more than brand-new ones. Owners will take the spot money. Charterers won't lock in the long money. That's interesting.

Office loans in commercial mortgage bonds hit a record 12.00% delinquency rate in August, on Trepp's numbers. The special servicing rate across all CMBS reached 11.42%, its highest since February 2013. And 81% of newly delinquent balances were loans that failed to pay off at maturity. The borrowers kept paying interest. They couldn't refinance the principal. We'll see.

Gas from coal. That was the plan.

In 1980, after two oil shocks, Congress set up the Synthetic Fuels Corporation and gave it $20 billion. The goal was as many as 22 giant plants turning coal into natural gas.

The pipeline companies didn't trust the technology. So Washington carried most of the risk. On the flagship plant near Beulah, North Dakota, five pipeline companies put up about a quarter of the cost. The Department of Energy guaranteed a $1.5 billion loan for the rest.

The Great Plains plant cost $2.1 billion. It shipped its first gas in July 1984, ahead of schedule and under budget.

But gas prices fell instead of rising. A year later the owners defaulted. The government paid off the lender and ran the plant itself for three years.

In 1988 it sold the whole plant for $85 million in cash.

The buyer was Basin Electric, a power cooperative with a generating station next door. It also gave up federal tax credits and agreed to share revenue with the government through 2009.

The plant still runs. It makes gas, fertilizer and carbon dioxide. By Basin's count, the government recovered more than $1.3 billion of its $1.5 billion through revenue sharing and forgone tax credits. It took more than twenty years.

The cost didn't stop there. In 2024 a federal energy judge recommended Basin return $471.5 million to its member utilities for putting the synfuels business into their electric rates.

A loan guarantee looks free on the day it's signed. The guarantor pays later, when the forecast turns out wrong. Then the ratepayer pays after that.

A guarantee is a bill with a delay. We'll see.