A cargo ship docks in New York Harbor on November 19, 2025 in New York City.
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The Supreme Court did not rule Friday on the legality of sweeping tariffs imposed by President Donald Trump, so markets are still awaiting a decision that could have far-reaching implications for trade policy and the U.S. fiscal situation.
There had been speculation that a ruling on tariffs would be issued on Friday, but the Supreme Court issued only one opinion that day, and it was unrelated to tariffs.
It is unclear when a ruling on tariffs will be announced. The court is expected to announce its next decision on Wednesday.
If a decision is made, two questions will be addressed: whether the administration can use provisions under the International Emergency Economic Powers Act to impose tariffs, and, if that is not appropriate, whether the United States must refund importers who have already paid the tariffs.
However, the final decision may lie somewhere in between.
Courts have the option of granting limited authority under IEEPA and requiring only limited repayments, as well as several other options for how to deal with the thorny issue that has garnered so much attention on Wall Street.
And even if the White House loses, it has other tools to impose tariffs that don’t require emergency powers under the law.
Treasury Secretary Scott Bessent himself said Thursday that he expected a “mishmash” of rulings.
“There’s no question that we can continue to collect tariffs at roughly the same level from a total revenue standpoint,” Bessent said at a news conference in Minneapolis. “What’s questionable, and what’s really unfortunate for the American people, is that the president has lost the flexibility to use tariffs for both national security and bargaining power.”
President Trump used IEEPA in part as an emergency measure to stem the flow of fentanyl into the United States
Impact of losing
José Torres, senior economist at Interactive Brokers, said there will be multiple impacts if the tariffs are eliminated.
“If the courts block the tariffs, the administration will find a workaround,” Torres said. “Despite the potential controversy surrounding such a decision, President Trump remains highly ambitious in achieving this agenda.”
“Tariff blockage will have a negative impact on domestic export ambitions. It will also have a negative impact on the fiscal situation and interest rates will rise,” he added. “But it will be good for corporate profits. Input prices will come down and trade will be smoother.”
Administration officials have cited a number of options to offset the court’s decision if it doesn’t go their way. Prediction market site Karshi points out that there is only a 28% chance that the court will rule in favor of implementing the tariffs. Torres said his company’s customers have similar expectations.
Bessent said the administration has at least three other options through the 1962 Trade Act, which would keep most of the tariffs in place. But he also worries that reimbursements could strain the administration and its efforts to reduce the budget deficit. Tariffs brought in about $195 billion in fiscal year 2025 and another $62 billion in 2026, according to Treasury data.
Ultimately, Morgan Stanley analysts believe there is “significant room for nuance” in the Supreme Court’s decision.
Morgan Stanley analysts Ariana Salvatore and Bradley Tian said in a note that the court has “broad discretion in making its decisions, and a variety of outcomes are possible, including the court narrowing existing tariffs but mandating their complete elimination, or limiting the application of future tariffs.”
“Given the recent political focus on affordability, we believe there is scope for the administration to take a lighter approach to the overall tariff system,” they added.
So far, the impact of the tariffs has been less than analysts expected. While the impact on inflation was limited, the trade deficit fell sharply, contrary to some expectations that tariffs could leave the United States a pariah on the world trade stage. Trade imbalances in October reached their lowest level since the end of the financial crisis in 2009, when imports fell sharply in the wake of the massive recession triggered by the financial crisis.
