9 Jan 2026
The Supreme Court just kept the world guessing. šļøš
Wall Street was holding its breath for a Friday ruling on the Trump administrationās broad tariffs. Instead? Silence.
The Court released one unrelated opinion and adjourned, leaving the legality of billions in trade dutiesāand the fate of the U.S. fiscal deficitāhanging in the balance.
Here is why this is the biggest "wait and see" in the market right now:
ā” The $200 Billion Stakes
At the heart of the case is the IEEPA (International Emergency Economic Powers Act). The Court has to decide:
Legality: Can the President use emergency powers to bypass Congress and levy global tariffs?
The Refund Bomb: If the tariffs are ruled illegal, will the U.S. have to pay back $150Bā$200B to importers who already paid up?
āļø The "Mishmash" Theory
Treasury Secretary Scott Bessent expects a "mishmash" ruling. The Court could grant limited powers or require only partial repayments. Itās rarely all-or-nothing at this level of government.
š The "Workaround" Reality
Even if the White House loses, don't expect a free-trade party.
The "Plan B": The administration is already eyeing the 1962 Trade Act to keep tariffs at similar levels.
The Impact: Analysts at Morgan Stanley see "significant room for nuance." The White House may pivot to a "lighter-touch" approach focused on affordability, but the tariffs aren't likely to vanish.
š The Economic Twist
Despite the controversy, the data is defying the doomsayers:
Inflation: Has remained surprisingly limited.
Trade Deficit: October hit its lowest level since 2009.
The Bottom Line: If the court blocks the tariffs, itās a win for corporate earnings and input costs, but a massive headache for the national deficit and "onshoring" ambitions.
Prediction markets only give a 28% chance that the tariffs are upheld exactly as they are.
