Supreme Court to Decide on Legality of Trump's $133.5 Billion Tariffs

The U.S. Supreme Court is poised to deliver a pivotal ruling this Friday on the legality of $133.5 billion in tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA). The outcome could have substantial fiscal implications, with the potential for the administration to face liability for refunds if the tariffs are deemed unlawful. The Court, which heard arguments in November, has signaled skepticism towards the tariffs, leading to a decline in confidence within betting markets regarding the administration's position. The Kalshi market now assigns a 30% chance of success for the Trump administration, while Polymarket gives a 23% probability, both down from approximately 40% pre-arguments.

The tariffs, first imposed in February 2025, were levied under the IEEPA, a 1977 law intended for use during national emergencies. During the November hearings, justices expressed doubts about the legal basis for these duties. Should the Court rule against the administration, it remains uncertain whether a refund of the collected duties would be ordered. The tariffs' reach extends globally, with significant impacts on countries such as China CN, Mexico MX, and Canada CA. China and Hong Kong account for $37.87 billion in fentanyl-related tariffs, while Mexico and Canada face $6.48 billion and $2.42 billion, respectively. Additional reciprocal tariffs amount to $81.74 billion across all involved countries, including Brazil BR, India IN, and Japan JP.