Editor's Note: Expert commentary on this topic will be published soon—stay tuned.

The U.S. Supreme Court’s February 2026 decision in Learning Resources, Inc. v. Trump has introduced significant uncertainty—not just relief—into the secured-finance ecosystem. While the ruling curtailed tariffs previously imposed under emergency authority, President Donald Trump has simultaneously proposed sweeping new tariff measures, including broad universal duties and sharply higher China-specific tariffs. For asset-based lenders, trade-finance providers, restructuring professionals, and import-dependent borrowers, the combined effect is less a clear liquidity windfall than a shifting policy landscape with uneven credit consequences.

At its core, the Court limited the federal government’s prior tariff approach, raising expectations among some importers that previously paid duties might ultimately be recoverable. Early commentary framed those potential refunds as a balance-sheet positive. But that outlook now competes with the prospect of materially higher future tariffs under new policy proposals. For many borrowers, especially retailers and manufacturers with global sourcing, the question is no longer simply whether past tariff costs might be recouped, but whether future tariff exposure could expand faster than any recovery.

Borrowing-base and liquidity effects
Some import-heavy borrowers had begun to model potential cash inflows tied to past tariff payments, treating them as contingent assets in liquidity planning. Lenders were cautiously evaluating whether such expectations could support amendments or incremental availability. That dynamic has cooled as new tariff proposals imply renewed or increased duty burdens on forward imports. For borrowers operating on thin margins, the risk of higher landed costs may offset any anticipated recoveries, limiting lenders’ willingness to treat tariff-related receivables as meaningful collateral support. The net effect is heightened variability in borrowing-base projections rather than a clear expansion.

Financial performance and covenant pressure
Tariffs since 2018 have already compressed EBITDA across import-dependent sectors. The recent ruling briefly suggested the possibility of normalization if historical tariff expense proved reversible. However, the prospect of new tariffs—potentially broader than prior measures—has shifted forecasts back toward margin pressure. Secured lenders are again stress-testing borrowers under higher cost-of-goods scenarios rather than assuming tariff relief. For covenant-constrained credits, especially in retail and distribution, renewed tariff risk may delay deleveraging trajectories and extend amendment cycles.

Inventory economics and sourcing strategy
Tariffs directly shape inventory cost and valuation. Hopes that effective costs might fall if prior duties were recovered are now counterbalanced by the possibility of materially higher duties on future imports. Borrowers may accelerate supplier diversification, near-shoring, or inventory front-loading ahead of any policy changes—actions that can temporarily inflate working-capital needs and volatility in collateral values. For lenders, inventory liquidity and advance rates may hinge more on supply-chain adaptability than on any retrospective tariff adjustments.

Refinancing and transaction implications
Earlier expectations that tariff recoveries could catalyze refinancings or support valuations in import-heavy M&A have become more conditional. Buyers and lenders now must weigh potential historical recoveries against forward tariff exposure that could structurally alter cost bases. In some cases, anticipated tariff increases could depress valuations or require additional equity support, particularly where sourcing alternatives are limited. Rather than a uniform tailwind, tariffs have become a bidirectional risk factor in underwriting.

Restructuring outlook
For stressed import-dependent borrowers, the evolving tariff environment complicates recovery assumptions. While past duty payments might still represent a potential asset, higher future tariffs could deepen operating losses or liquidity shortfalls. Distress models therefore increasingly incorporate downside tariff scenarios, especially for sectors with high import intensity such as apparel, consumer goods, and electronics distribution. The overall effect is greater dispersion in outcomes across borrowers depending on sourcing flexibility and pricing power.

Policy and supply-chain uncertainty
The combination of the Court’s decision and new tariff proposals underscores that U.S. trade policy remains fluid rather than settled. Even as one tariff framework was curtailed, another potentially broader one has been proposed. For secured-finance markets, this means tariff exposure is likely to remain a recurring underwriting variable. Lenders may continue to apply sector-specific reserves or conservative advance assumptions for import-reliant borrowers until policy direction stabilizes.

In sum, Learning Resources has not transformed tariffs from a drag into a dependable asset for secured-finance participants. Instead, it has highlighted how quickly tariff assumptions can shift. Any prospective recoveries from past duties now sit alongside the possibility of significantly higher future tariffs. For lenders and borrowers alike, tariffs remain less a source of liquidity than a continuing source of credit volatility—one likely to influence collateral values, covenant performance, and restructuring outcomes across import-dependent sectors in the years ahead.

AI assisted in the creation of this article.