Supreme Court’s Trump tariff decision: five takeaways

The Supreme Court’s decision on Friday to strike down a slew of tariffs imposed by President Donald Trump on imports was widely expected. Less certain are the long-term impacts as the economy and markets once again adapt to the changing landscape.

Trump and other White House officials have promised to employ other authorities to implement the tariffs, which the president has already done. Announcing the imposition of a 10% tax. Pursuant to an article of the Trade Law of 1974.

But other questions remain: What is the impact on prices? Will it include companies that paid customs duties? Supreme Court decision Seeking a refund? How will the Federal Reserve react?

Here are five takeaways from the ruling and associated implications.

1. Economic impact

In short, the overall fallout is expected to be limited, especially pending Trump’s next moves and what happens with the refund issue.

Joseph Brusuelas, chief economist at RSM, described the potential economic fallout as “narrow,” although there are “huge potential winners from this ruling,” especially in the tariff-sensitive retail and manufacturing sectors.

Growth slowed significantly in the fourth quarter, with… GDP is accelerating at an annual rate of only 1.4%. But this is largely due to the government shutdown, with faster growth likely in the first quarter of 2026.

“Financial conditions are already pointing to a big positive boost in 2026, driven by one nice big bill and an easy monetary policy backdrop,” said Jason Pride, head of investment strategy and research at Glenmede. “The tariff ruling may gradually strengthen this stimulus, boosting expectations for above-trend economic growth.”

Pride warned that there could be a temporary decline in exports if companies rush to import products before Trump’s next tariff moves, as they did in early 2025.

2. Some help with inflation

The court’s decision came on the same day as the Ministry of Commerce The core inflation rate was 3% annually In December, according to the Federal Reserve’s core expectations gauge. Central bank officials have estimated that the tariffs are worth about half a percentage point of inflation, an effect that will be only temporary at least because it shows up in the way inflation is calculated.

So the loss of tariffs reduces, for now, potential economic headwinds that could impact the Fed’s interest rate decisions this year.

Interestingly, on Friday markets backed off their bets on interest rate cuts a bit, now placing a greater likelihood of the next cut in July rather than June, as previously indicated, according to CME Group data. Traders are still largely anticipating two cuts this year, with a roughly 40% chance of a third – little changed from before the decision.

“We believe the Supreme Court’s decision to strike down the IEEPA tariffs will not have significant macro implications for the U.S. economy or the Fed,” Evercore ISI analysts said in a note.

3. Relief to the market

For much of the past year, Trump’s tougher tariff announcements periodically sent financial markets reeling – and then rising after he eventually rolled back many of the more aggressive measures.

correct in form, Stocks rose on Fridayignoring concerns about the pace of growth and inflation, and raising hopes about corporate profits. Treasury yields rose but the move was contained as investors debated the merits of growth versus inflation.

“More broadly, the decision highlights the shift towards a slower and more procedurally restrictive trading policy, which reduces headline volatility, but increases the importance of financial mechanisms and supply considerations for fixed income markets,” said Dan Seluk, head of global short-term and director of liquidity and portfolio management at Janus Henderson.

4. What about those refunds?

Wall Street’s reaction was mixed to the potential tariff rollback.

Morgan Stanley estimated that the United States may pay about $85 billion to the affected parties. RSM’s Brusuelas put the figure at between $100 billion and $130 billion, while Raymond James analyst Ed Mills put spending higher than that, at about $175 billion, in line with expectations. University of Pennsylvania model.

One question is the process. The Supreme Court’s decision did not specifically address this issue, and will likely leave it to lower jurisdictions. Justice Brett Kavanaugh noted the potential for “chaos” in resolving the case. Brian Gardner, chief Washington policy strategist at Stifel, speculated that refunds would not happen retroactively at all after the case reaches the lower courts.

“We remain skeptical that the government will return or pay a significant amount, but again, this issue remains unresolved,” Gardner said in a note.

5. What now?

The road from here will be complicated, but Trump indicated in a press conference on Friday that he was not willing to back down from efforts to impose tariffs, which he repeatedly described as “the most beautiful word” in the dictionary.

One important point is that it’s not as if tariffs are going away.

Trump used the International Emergency Economic Powers Act to cover about 60% of the tariffs he implemented, so the rest stands. Hence, the administration can cite a number of provisions in the Trade Code to impose duties.

However, it will need to go to Congress for approval, and there are also time limits attached to some of these measures.

“Given Trump’s public outcry against previous court rulings and criticism of tariffs, we would not be surprised to see a concrete tariff escalation/response from the White House sooner rather than later,” wrote Chris Krueger, managing director of TD Cowen Washington Research Group. Kroger expects the 2026 tariff effort to be “all gas, some[temporary]brakesstaytuned.”[المكابحالمؤقتةتابعونا”[temporary[brakesstaytuned”