The Supreme Court May Decide on Trump's Tariffs. Here’s What Analysts Predict for the Market.

Supreme Court Set to Review Trump-Era Tariffs

Tasos Katopodis / Getty Images

The Supreme Court is expected to soon address the legality of tariffs imposed during the Trump administration, a decision that could have significant implications for U.S. trade policy and financial markets.

Main Points

• Market experts are assessing which companies might benefit if the Supreme Court overturns Trump’s tariffs, but the wide range of possible outcomes means trade policy remains uncertain.
• No matter the verdict, the Trump administration retains options to reinstate or substitute tariffs, even if some are removed or reduced.

The Court’s upcoming ruling on President Trump’s tariff measures could cause notable shifts in both the markets and individual stocks. While analysts have identified potential winners and losers, the situation remains complex due to the numerous possible scenarios.

In other words, while a long-awaited decision may be imminent, investors should not expect a straightforward reaction such as “buy the rumor, sell the news.”

The Supreme Court could rule as early as Friday on whether Trump’s use of emergency powers to levy tariffs was lawful. The justices might uphold the so-called “Liberation Day” tariffs introduced in April, or they could declare them unlawful and reverse them. Such a decision would bring much-needed clarity to a trade policy landscape that has been uncertain for nearly a year, following an initial market shock that has since subsided.

According to experts, a Supreme Court decision could inject fresh volatility into the markets. Louis Navellier, Chief Investment Officer at Navellier & Associates, commented, “If the tariffs are ruled illegal, expect market turbulence; if they’re upheld, a rally is likely.”

Should the tariffs be overturned, analysts suggest that companies most impacted by the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs could see substantial gains. Importers may even receive refunds for tariffs already paid, a point some firms have advocated for. However, the broad spectrum of potential outcomes adds complexity to the outlook.

Why This Decision Matters

According to the Tax Foundation, the tariffs introduced last year resulted in an average tax hike of $1,100 per U.S. household, with that figure projected to rise to $1,400 this year. If the IEEPA tariffs are eliminated, those numbers could drop to $300 in 2025 and $400 this year.

JPMorgan equity analysts note that if the Supreme Court finds the IEEPA tariffs unlawful and permanently blocks them, companies that import large volumes of goods—such as Dick’s Sporting Goods (DKS), Mattel (MAT), and Hasbro (HAS)—would likely see the greatest reduction in tariff costs.

Other major retailers, including Walmart (WMT), Target (TGT), Costco (COST), and BJ’s Wholesale Club (BJ), are expected to experience more modest savings, according to JPMorgan’s latest report.

Additional Insights

Deutsche Bank analysts estimate that retailers are currently paying an extra 20% in tariffs. If the IEEPA tariffs are struck down, this could provide relief, although Deutsche’s consumer research team cautions that new tariffs—potentially around 15%—could temporarily take their place.

The Supreme Court’s ruling may not be all-or-nothing. Morgan Stanley policy strategists suggest the Court could limit the IEEPA tariffs to certain countries with which the U.S. has a trade deficit, or grant the administration a grace period to adjust the legal basis for the tariffs, possibly imposing a time limit on those still in effect.

Even if the tariffs are completely rolled back, the administration has other legal tools to reinstate or replace them. As Morgan Stanley notes, “Timing remains the biggest unknown in these scenarios.”

A decision could arrive as soon as tomorrow, but complete clarity on trade policy may still be some time away.