SCOTUS Weighs Trump Tariffs in High-Stakes Decision

The Supreme Court could reshuffle a big chunk of US trade policy as soon as Friday. The justices are expected to rule on whether the White House legally used the International Emergency Economic Powers Act, or IEEPA, to impose hundreds of billions of dollars in tariffs—measures the administration partly framed as an emergency move to curb fentanyl flows, reports CNBC. The court will also weigh a costly follow-up question: If those tariffs were improperly enacted, must the government pay back importers who already shelled out the duties?

Bloomberg notes that more than 1,000 companies are already suing over the tariffs. Analysts say the outcome doesn't have to be an all-or-nothing call, per CNBC. The court could, for example, narrow the administration's authority under IEEPA and order only partial refunds. Treasury Secretary Scott Bessent told an audience in Minneapolis he expects a "mishmash" decision, but he insisted the government's "ability to continue collecting tariffs at roughly the same level" isn't in doubt. He warned, though, that losing the IEEPA argument would restrict the president's flexibility to use tariffs as a national security or negotiating tool.

Trump's team has already signaled it has alternative options, including several provisions under the 1962 Trade Expansion Act that Bessent says could preserve most of the tariff revenue. Tariffs generated about $195 billion in fiscal 2025 and $62 billion so far in 2026, money that helps offset the deficit. The bigger hit, Bessent has suggested, could come if the government is forced to hand back significant sums to importers. Reuters notes that President Trump may not make things easy if that's the case. "It's not in the government's DNA to give back money. And Trump would not want to give back money," says the CEO of a Canadian appliance firm.

Prediction market Kalshi puts the odds of the court fully blessing the tariffs as implemented at just 28%, per CNBC. Morgan Stanley analysts say the court could allow much of the current trade regime to stand while scaling it back or constraining future use. Jose Torres of Interactive Brokers says a full block on the tariffs would likely hurt efforts to bring production back to the US and could push interest rates higher, but it would lower companies' input costs and boost profits. Despite initial warnings that the measures would stoke inflation and blow up trade ties, the tariffs so far have had a limited effect on that and coincided with a sharply narrower trade deficit.