Core Viewpoint - The U.S. Supreme Court's ruling on presidential tariff powers could significantly impact the market by the end of the year, with uncertainty surrounding tariffs persisting regardless of the court's decision [1] Group 1: Court's Stance and Market Reactions - The Supreme Court justices expressed skepticism about Trump's authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), as the law does not explicitly mention tariffs [1] - Internal divisions among the justices are evident, with 4 justices likely opposing the government's stance, while 3 support it, and 2 are undecided [2] - Market expectations fluctuated during the hearings, with the probability of tariffs being upheld dropping from 40% to around 30% [2] Group 2: Economic Impact and Refund Procedures - Even if the court rules against the tariffs, the market should not expect an immediate policy reversal, as refund processes could take months and depend on further legal actions by importers [3] - As of September, approximately $89 billion in IEEPA tariffs had been collected, with projections suggesting this could rise to between $115 billion and $145 billion by the time of the court's ruling [3] - Experts warn that the cancellation of tariffs could lead to greater chaos, with potential for increased uncertainty and a significant rise in the U.S. fiscal deficit due to large refund amounts [3] Group 3: Alternative Legal Options for Tariffs - The Trump administration has multiple alternative legal tools to impose tariffs if the IEEPA is rejected, including provisions from the Trade Act of 1974 and the Trade Expansion Act of 1962 [4] - Goldman Sachs indicates that the government could quickly reimplement similar tariffs using these alternative laws, particularly against major trading partners [4] - The net impact on tariffs for major trading partners may be minimal, with actual tariff rates potentially decreasing by only about 1 percentage point [4]

Core Viewpoint - Goldman Sachs indicates that the U.S. Supreme Court's decision on tariff rulings remains closely contested, with a ruling expected in December 2025 or January 2026. The firm believes that even an unfavorable ruling may not fundamentally alter the tariff landscape [1]. Group 1: Court Proceedings and Predictions - The Supreme Court's oral arguments on November 5, 2025, revealed skepticism among most justices regarding the president's authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), leading Goldman Sachs to lower the market's probability of maintaining tariffs from 40% to around 30% [1][2]. - Goldman Sachs predicts that if the court rejects the IEEPA tariffs, the Trump administration could still implement similar tariffs through other legal avenues, resulting in an actual tariff rate decrease of only about 1 percentage point [1]. Group 2: Financial Implications and Refund Processes - As of September, the government had collected approximately $89 billion in IEEPA tariffs, which is expected to rise to between $115 billion and $145 billion by the time of the court's ruling. The refund process for any potential tariff reversals could take several months [3]. - Even if the court rules against the IEEPA tariffs, the government has various alternative legal tools to impose tariffs, including provisions from the Trade Act of 1974 and the Trade Expansion Act of 1962, which could allow for the reimplementation of similar tariffs, particularly against major trading partners [3]. Group 3: Judicial Dynamics - The oral arguments highlighted a division among justices, with three liberal justices explicitly questioning the government's position, while some conservative justices also leaned towards opposing the government based on congressional delegation of power [4]. - Key swing votes appear to be Justices Barrett and Chief Justice Roberts, with Barrett questioning whether Congress intended to grant broad tariff powers through the IEEPA, and Roberts emphasizing that taxation is a core power of Congress, although recognizing tariffs as tools of foreign policy [4].