The US Supreme Court completed the release of opinions on Friday but did not announce the ruling on Trump's tariffs. The US Supreme Court stated that its next announcement of decisions will be on Wednesday, January 14.
The U.S. Supreme Court did not issue a ruling on Friday regarding the tariffs implemented by U.S. President Trump. The market is still awaiting this decision, as it will have profound implications not only for trade policy but also potentially for the fiscal condition of the United States.
There had been speculation that the ruling might be announced on Friday, but no decision will be made at this time, and it remains unclear when the final ruling will be released.
Once the ruling is issued, it will address two core issues: first, whether the U.S. government can impose tariffs under relevant provisions of the International Emergency Economic Powers Act (IEEPA); second, if such actions are deemed inappropriate, whether the U.S. will need to refund duties already paid by importers.
However, the final ruling may also adopt a compromise approach.
The court could choose to grant limited authority solely within the framework of IEEPA and require refunds only in a limited scope; additionally, for this highly sensitive issue closely watched on Wall Street, the court has multiple options available for its handling.
Moreover, even if the White House loses the case, the Trump administration still possesses other tools to impose tariffs without relying on the emergency powers referenced in the act.
U.S. Treasury Secretary Scott Bessent stated on Thursday that he expects the ruling to be a 'mixed' decision:
There is no doubt that our ability to continue collecting tariffs at roughly the same overall revenue level will not be affected. What is truly questionable, and deeply regrettable for the American people, is that if the president loses, his flexibility in using tariffs as a national security tool or negotiation leverage will be restricted.
Bessent noted that the Trump administration could at least maintain most of the tariffs through three alternative pathways under the Trade Act of 1962. However, he also expressed concern that if refunds are required, it could place pressure on the U.S. government and its efforts to reduce the fiscal deficit. According to U.S. Treasury data, tariffs generated approximately $195 billion in revenue in fiscal year 2025 and around $62 billion in 2026.
How does Wall Street view this?
Jose Torres, senior economist at Interactive Brokers, stated that the removal of tariffs would have multifaceted impacts:
If the court blocks these tariffs, the government will certainly seek alternative measures. President Trump is highly ambitious in advancing his agenda, even if this decision could be controversial. Blocking the tariffs would hinder the goal of bringing manufacturing back to the U.S., as well as strain fiscal conditions, potentially leading to rising interest rates; however, it would benefit corporate profits by reducing input costs and facilitating smoother trade.
Trump administration officials have mentioned various options to hedge against an unfavorable ruling.
Data from the prediction market Kalshi shows that the probability of the court upholding the current tariffs is only 28%. Torres noted that clients of his firm share a similar expectation.
Overall, analysts at Morgan Stanley believe there is significant room for nuanced handling in the U.S. Supreme Court's decision. Analysts including Ariana Salvatore pointed out in a report:
The court has considerable discretion in its ruling, with outcomes varying widely. For instance, the scope of existing tariffs could be narrowed without requiring complete removal, or future tariff applications could be restricted. Given recent political focus on cost-of-living issues, we do believe there is space for the administration to adopt a more moderate approach to the overall tariff system.
It is worth noting that, contrary to expectations by some analysts that tariffs might marginalize the U.S. in global trade, their actual impact so far has been surprising: inflation has been minimally affected, while the trade deficit has narrowed significantly. In October, the trade deficit fell to its lowest level since the end of the 2009 financial crisis, when imports had plummeted due to the severe recession triggered by the crisis.
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Editor/Stephen