Judgement Day, The U.S. Supreme Court may soon rule on Trump’s tariffs

The U.S. Supreme Court is expected to potentially deliver a hotly anticipated ruling on the legality of President Donald Trump’s sweeping tariffs on Friday, a decision that could have a deep impact on what has become a central pillar of the White House’s economic agenda.

At issue is Trump’s use of the 1977 International Emergency Economic Powers Act, or IEEPA, to impose the levies on a broad range of countries. Trump initially invoked IEEPA as a measure to address the flow of the drug fentanyl into the U.S. Speaking at hearings in November, justices from both conservative and liberal justices voiced some skepticism around Trump’s claims.

Recent statements on tariffs by Trump suggest that the White House is bracing for a negative outcome, analysts at ING said in a note. Online betting website Polymarket now shows just a one-in-four chance the high court will rule in Trump’s favor.

Should the tariffs be reversed, some observers have flagged that a new wave of uncertainty could surround what has been an erratic tariff agenda. One major question revolves around whether a ruling against the Trump administration would also force the U.S. government to send out an estimated $150 billion in refunds for duties already paid by importers.

“Overall, this scenario could be interpreted by markets as easing inflation pressures and improving corporate profitability, while at the same time worsening the fiscal outlook,” the ING analysts including Frantisek Taborsky and Francesco Pesole wrote. They added that expectations for Trump’s proposed “dividend” check to Americans from the tariffs may be “reduced” as well.