The sons of President Donald Trump's Commerce Secretary, Howard Lutnick, are allowing their clients to essentially bet that President Donald Trump’s tariffs will flop in the courts, according to new documents acquired by Wired.
Cantor Fitzgerald is an investment company led by Lutnick's sons. Writing on Monday, Wired noted that Lutnick ran the company for 30 years before being confirmed to serve on the Trump Cabinet in February. It's no surprise that the financial services company would take a different view on Trump's trade war, as Lutnick has been vocally opposed to it since the start.
The option isn't open to all clients, but according to the documents, some are allowed "to wager that Trump’s tariffs will eventually be ruled unlawful," by the courts.
The Commerce Clause in the Constitution places the responsibility of regulating international trade and commerce with foreign nations squarely in the hands of Congress. Trump attempted to make the tariff rules using the International Emergency Economic Powers Act. Several corporations have sued over the tariffs.
A representative from Cantor told WIRED in a letter that the firm was "willing to trade tariff refund rights for 20 to 30 percent of what companies have paid in duties," according to the report.
“So for a company that paid $10 million, they could expect to receive $2-$3 million in a trade,” the representative wrote. “We have the capacity to trade up to several hundred million of these presently and can likely upsize that in the future to meet potential demand."
“We’ve already put a trade through representing about ~$10 million of IEEPA Rights and anticipate that number will balloon in the coming weeks,” the Cantor representative said.
Wired explained that the kind of "litigation finance" has become increasingly popular, allowing firms to make money off of legal settlements.
International business law Professor Tim Meyer, from Duke University School of Law, told the outlet, “The fact that it’s Cantor Fitzgerald, that raises some questions. It’s quite interesting that the Commerce Secretary’s firm is the one that is betting the tariffs will be struck down. That strikes me as very interesting—and quite telling about what those with connections to the administration think about the merits of the tariffs.”
The Department of Commerce made it clear Lutnick wasn't involved in the company anymore and had no role in the decision.
Read the full report here.
