Bye bye tariffs...for now

The President may fancy himself a dealmaker, but the Supreme Court just trumped him.

This morning, the Supreme Court struck down the White House’s global tariffs in a 6-3 ruling, arguing that President Trump was exceeding his authority—a huge blow to the Trump administration and the core economic policy of the president’s second term.

The issue wasn’t the tariffs themselves, but the way they were implemented. While previous administrations had required investigations, findings, and approval before putting tariffs in place, it turns out that imposing tariffs immediately and unilaterally via Truth Social didn’t pass the sniff test. The Supreme Court justices particularly noted the way the president abused the International Economic Emergency Powers Act to put tariffs in place.

“It is also telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope,” the ruling said.

The post-ruling scoreboard

A number of industries were popping champagne today after the announcement:

• Retailers that import a majority of their products from overseas jumped on the news, particularly home goods and furniture sellers like Wayfair, RH, and Williams-Sonoma.
• Consumer brands, especially shoemakers like Crocs and Adidas, rose after the announcement, as did stocks like e.l.f. Beauty and Lululemon.

And, of course, we can’t forget what the ruling means for the Fed. “The Supreme Court decision will pave the way for accelerated rate cuts as inflation expectations from tariffs are now less of a factor,” wrote Jamie Cox, Managing Partner for Harris Financial Group, in a note today. “The looming question is what new authority the Administration will use to salvage some of the tariff revenue.”

Everyone wants their money back

Since a big chunk of tariffs are now illegal, the government technically owes businesses billions of dollars in refunds—one estimate says the US could repay up to $175 billion—a task that will be as much of a chaotic mess as you’d expect.

And what about the 90% of tariff costs that have been passed on to US consumers and businesses, according to the Federal Reserve Bank of New York analysis from earlier this week? We wouldn’t hold our breath for an IOU.

The crash out: In a speech from the White House this afternoon, Trump vowed to sign an executive order imposing a new 10% “global tariff” that will be added on top of the levies that remain intact after the court’s ruling.

Looks like the tariff drama still isn’t over yet.—LB