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 - The U.S. Supreme Court is examining the legality of global tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA), raising questions about the boundaries of presidential economic authority [1][2] Group 1: Legal Proceedings - The Supreme Court hearing lasted two and a half hours, focusing on whether Trump overstepped the constitutional taxing authority granted to Congress [1] - Chief Justice John Roberts indicated that tariffs are essentially a tax on Americans, which is a core power of Congress, suggesting that significant economic actions by the president require explicit congressional authorization [1] - Some conservative justices argued that the president has inherent discretion in foreign affairs and national security matters, referencing a precedent from the Nixon era [1] Group 2: Government's Defense - The Trump administration defended the tariffs as a necessary measure to address a long-standing trade deficit, which they claim poses a national security threat [1] - Government lawyers warned that removing the tariffs could lead to aggressive trade retaliation from other nations, undermining U.S. economic and security standing [1] Group 3: Financial Implications - U.S. Customs data indicates that since February, the IEEPA tariffs have generated approximately $89 billion in revenue for the U.S. [2] - The outcome of the case could reshape the boundaries of presidential economic power and impact the global trade landscape [2]