Core Viewpoint - The U.S. Supreme Court will hold a hearing in November regarding the legality of certain tariffs, increasing the likelihood that some tariffs may be deemed illegal in the first half of next year [1] Group 1: Tariff Legality and Implications - If certain tariffs are ruled illegal, they may be replaced by new tariffs that could have different rates depending on the exporting country [1] - Refunds will be available for tariffs paid from April 2025 until the ruling, with U.S. Treasury Secretary suggesting that half of the tariff revenue could be refunded, equating to 0.5% to 0.7% of GDP, which would add to the fiscal deficit [1] Group 2: Impact on Companies - Refunds of tariff payments represent a form of tax rebate, providing unexpected cash payments to U.S. companies that have paid tariffs, with approximately two-thirds of these payments coming from small U.S. companies [1] - The potential for tariff refunds may act as a fiscal stimulus similar to income tax rebate checks [1] Group 3: Inflation Considerations - The introduction of new tariffs replacing old ones may lead to inflationary distortions; if new tariffs lower rates, prices of U.S. goods that increased due to previous tariffs may not decrease due to price stickiness [1] - Conversely, if the new tariff regime raises certain rates, it could introduce new inflation risks [1]