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The US Supreme Court struck down President Donald Trump\u2019s sweeping global tariffs, undercutting his signature economic policy and delivering his biggest legal defeat since he returned to the White House.<\/p>\n
Treasuries and a Bloomberg gauge of the dollar fell after the US Supreme Court ruling.<\/p>\n
Read: US firms paid nearly 90% of 2025 tariff costs<\/p>\n
Voting 6-3, the\u00a0court said\u00a0Trump exceeded his authority by invoking a federal emergency-powers law to impose his \u201creciprocal\u201d tariffs across the globe as well as targeted import taxes the administration says address fentanyl trafficking.<\/p>\n
The justices didn\u2019t address the extent to which importers are entitled to refunds, leaving it to a lower court to sort out those issues. If fully allowed, refunds could total as much as $170 billion \u2013 more than half the total revenue Trump\u2019s tariffs have brought in.<\/p>\n
The White House has said it will quickly replace the levies using other legal tools, though the fall-back options tend to be either more cumbersome or more limited than the wide-ranging powers Trump asserted under the International Emergency Economic Powers Act.<\/p>\n
Stocks rose on news of the decision given investors previously fretted tariffs would hurt the outlook for economic growth and company earnings. But Treasuries fell on the potential loss of tax revenues and the dollar also dipped because of the likely relief to other economies.<\/p>\n
The ruling strikes at the heart of Trump\u2019s agenda, blunting an all-purpose cudgel he has enthusiastically wielded against trading partners. Trump this month set up a process to impose tariffs as high as 25% on goods from countries doing business with Iran. He previously threatened to impose tariffs on European countries resisting his attempt to take over Greenland.<\/p>\n
The decision could cut the US average effective tariff rate by more than half. A Bloomberg Economics analysis before the ruling concluded that a broad decision against Trump would reduce the rate from 13.6% to 6.5%, a level not seen since March.<\/p>\n
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CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
The high court majority said the 1997 law doesn\u2019t authorize tariffs. IEEPA, as the law is known, gives the president a panoply of tools to address national security, foreign policy and economic emergencies but doesn\u2019t explicitly mention tariffs or taxes.<\/p>\n
\u201cWhen Congress grants the power to impose tariffs, it does so clearly and with careful constraints,\u201d Chief Justice John Roberts wrote in the court\u2019s majority opinion. \u201cIt did neither here.\u201d<\/p>\n
Two Trump appointees \u2014 Justices Neil Gorsuch and Amy Coney Barrett \u2014 joined Roberts and the court\u2019s three liberals in the majority. \u00a0Justices Brett Kavanaugh, Clarence Thomas and Samuel Alito dissented.<\/p>\n
Kavanaugh wrote that the refund process was \u201clikely to be a \u2018mess,\u2019 as was acknowledged at oral argument.\u201d<\/p>\n
Trump has called tariffs \u201cmy favorite word\u201d and vowed they will \u201cmake us rich as hell.\u201d<\/p>\n
The case is Learning Resources v. Trump,\u00a024-1287.<\/p>\n
Here\u2019s what investors and strategists across Wall Street are saying:<\/strong><\/p>\n Bipan Rai at BMO Asset Management Inc.<\/strong><\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n \u201cKnee-jerk reaction to the Supreme Court decision sees the USD lower and duration under a bit of pressure. We don\u2019t see this as a dramatic shift over the long-term as the White House is likely to look at other measures as an offset to revenue loss. There may be some slippage, but not enough to materially matter.\u201d<\/p>\n<\/blockquote>\n Alvaro Vivanco<\/strong>, Emerging Markets Macro Strategist at Wells Fargo<\/strong><\/p>\n \u201cThis should be marginally positive for EM FX, mostly because it underscores the policy uncertainty out of the US. I don\u2019t think it\u2019s a game changer for most EM economies given all the concessions and trade deals. The negative comes from higher UST yields and a steeper curve \u2013 lets see how far that goes.\u201d<\/p>\n<\/blockquote>\n Marc Chandler<\/strong>, Chief Market Strategist at Bannockburn Global<\/strong><\/p>\n \u201cKnee jerk dollar sell-off and jump in us yields, but market had largely expected outcome. Tariffs funds was credit positive so the loss of the them is credit negative.\u201d<\/p>\n<\/blockquote>\n Valentin Marinov<\/strong>, Head of G-10 FX Research and Strategy at Credit Agricole<\/strong><\/p>\n \u201cAhead of the SCOTUS decision, we expected that a verdict that goes against Trump\u2019s tariffs could wreak havoc to his administration\u2019s trade policy and the resulting policy uncertainty could hurt US growth outlook in the very near-term.\u201d<\/p>\n \u201cThe reaction in the FX market has been rather muted. I suspect that this is due to the impact of the lingering uncertainty surrounding the situation around Iran.\u201d<\/p>\n<\/blockquote>\n \u00a9 2026 Bloomberg LP<\/p>\n Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n\n
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