The US Supreme Court is set to rule on the legality of former President Trump’s global duties on trade partners, a landmark test of presidential powers. The court’s first opportunity to issue a verdict passed last week, and the next opinion day is scheduled for Wednesday, January 14.
Companies like Costco are bringing lawsuits against the US government, hoping to secure refunds on import duties if the court rejects Trump’s authority to impose tariffs. The court heard arguments in early November, with both conservative- and liberal-leaning justices expressing skepticism about the method used to impose the duties. Trump invoked a 1977 law meant for national emergencies to implement the tariffs.
Trump has frequently expressed concern over the ruling, stating that losing the ability to tariff other countries would be a “terrible blow” to the US. He recently posted on social media, stating, “If the Supreme Court rules against the United States of America on this National Security bonanza, WE’RE SCREWED!” US Treasury Secretary Scott Bessent stated that the Treasury has sufficient funds to cover potential refunds if the court rules against Trump, but he doubts businesses will pass those refunds on to consumers.
The potential ruling comes amid evolving trade relationships. Bessent noted that Europe and China are experiencing a feud over chips, and the EU recently approved the Mercosur trade deal, potentially in response to US tariffs. The US October trade deficit was the lowest since 2009, as imports declined.
The complexity of US tariff rates has increased significantly, with the Harmonized Tariff Schedule now exceeding 4,500 pages. Experts do not anticipate a significant decrease in tariff rates in 2026. The Supreme Court’s decision, expected as early as Friday, presents market risks, and the average tariff rate has risen to over 15%.
Trump has warned of dire consequences if the Supreme Court rules against him, and he has expressed concerns about potential trade deal setbacks, such as a failure to call Modi, which could stall potential trade agreements.
The Supreme Court did not issue a ruling on the tariff case on Friday, the first day in session for 2026.
If Trump loses at the Supreme Court, importers are bracing for a potential $150 billion fight over tariff refunds.
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