Legal Analysis - The U.S. Supreme Court's debate on the legality of "reciprocal tariffs" shows a 3:6 ratio in favor of declaring them illegal, indicating a high probability of a ruling against them[2] - The main arguments for declaring the tariffs illegal include the assertion that tariff authority belongs to Congress and that the IEEPA was intended to limit presidential power, not expand it[2][11] - Three potential outcomes of the ruling are identified: a likely illegal ruling with delayed effect (45%-55% probability), partial illegality with possible allowance for fentanyl tariffs (20%-30% probability), and a low probability (10%-20%) of upholding the legality of reciprocal tariffs[17][18] Economic Implications - If reciprocal tariffs are deemed illegal, the U.S. tariff structure may decline by approximately 25%, with total tariff revenue potentially dropping from $1,959 billion to $1,554 billion[4][26][37] - Current tariff revenue composition shows reciprocal tariffs account for 45%, Section 301 tariffs for 18%, and Section 232 tariffs for 17%[4][26] - The effective tariff rate for the U.S. is currently 9.75%, with the highest rate on Chinese imports at 40.4%[4][32] Political Response - In response to a potential ruling against reciprocal tariffs, Trump may resort to existing tariff laws such as Sections 232, 301, and 338, but the likelihood of broad tax refunds is low due to legal constraints[3][22] - The probability of universal tax refunds is low, with refunds likely limited to specific plaintiffs rather than a blanket return to all importers[3][25] - Trump's proposal to distribute tariff revenues to citizens faces significant legislative hurdles, requiring Congressional approval[3][25]