Supreme Court’s Trump tariff decision: five takeaways

The Supreme Court’s decision Friday to throw out a large number of tariffs that President Donald Trump imposed on imports was widely expected. What’s far less certain is the longer-run impacts as the economy and markets again adjust to a changed landscape.

Trump and other White House officials have promised to employ other authorities to implement the tariffs, with the president already announcing a 10% levy under a section of the Trade Act of 1974.

However, other questions remain: What will be the impact on prices? Will companies that paid the tariffs covered in the high court’s decision seek refunds? How will the Federal Reserve react?

Here are five takeaways from the ruling and the associated fallout.

1. The economic impact

In a word, the macro reverberations are expected to be limited, especially pending Trump’s next moves and what happens with the refunds issue.

RSM chief economist Joseph Brusuelas characterized the likely economic fallout as “narrow,” though there are “enormous potential winners from this ruling,” particularly in the tariff-sensitive retail and manufacturing sectors.

Growth slowed substantially in the fourth quarter, with GDP accelerating at just a 1.4% annualized rate. But that was largely due to the government shutdown, with faster growth likely in the first quarter of 2026.

“Fiscal conditions already point to a sizable positive impulse in 2026, driven by the One Big Beautiful Bill Act and an easing monetary policy backdrop,” said Jason Pride, chief of investment strategy and research at Glenmede. “The tariff ruling may incrementally enhance this stimulus, reinforcing expectations for above-trend economic growth.”

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

2. Some help for inflation

The court decision came the same day that the Commerce Department reported core inflation ran at a 3% annual rate in December, according to the Fed’s primary forecasting gauge. Central bank officials have estimated that tariffs are worth about half a percentage point to inflation, an impact that will be only temporary at least as it figures into the way inflation is calculated.

So losing the tariffs reduces, for now, a potential economic headwind that could figure into the Fed’s decisions on interest rates this year.

Interestingly, markets on Friday rolled back their bets on rate cuts a bit, now placing a higher likelihood of the next reduction coming in July rather than June, as previously indicated, according to CME Group data. Traders still largely expect two cuts this year, with about 40% odds of a third — little changed from before the decision.

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

3. Relief for the market

For much of the past year, Trump’s more severe tariff declarations have periodically sent financial markets reeling — then spinning back higher after he ultimately backed off many of the most aggressive measures.

True to form, stocks rallied Friday, glossing over worries about the pace of growth and inflation, and raising hopes for corporate earnings. Treasury yields drifted higher but the move was contained as investors debated the merits of growth versus inflation.

“More broadly, the decision underscores a shift toward slower, more procedurally constrained trade policy, reducing headline volatility, but increasing the importance of fiscal mechanics and supply considerations for fixed‑income markets,” said Dan Siluk, head of global short duration and liquidity and portfolio manager at Janus Henderson.

4. What about those refunds?

Wall Street reaction was mixed on the prospect for tariff refunds.

Morgan Stanley estimated that the U.S. probably would pay back about $85 billion to affected parties. RSM’s Brusuelas pegged the number at between $100 billion and $130 billion, while analyst Ed Mills at Raymond James put the outlay still higher, at about $175 billion, in line with a University of Pennsylvania model.

One question is process. The Supreme Court’s decision did not address the issue specifically, likely leaving it to lower jurisdictions. Justice Brett Kavanaugh noted the likelihood of a “mess” sorting out the issue. Brian Gardner, chief Washington policy strategist at Stifel, speculated that refunds won’t happen retroactively at all after the issue makes its way through lower courts.

“We remain skeptical that the government will refund/pay a large sum, but, again, this issue remains unresolved,” Gardner said in a note.

5. What now?

The path from here will be complicated, but Trump in a news conference Friday indicated no willingness to back down in the effort to impose tariffs, which he has repeatedly called “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 has implemented, so the rest stand. From there, the administration can cite a number of provisions in the trade law to levy the duties.

However, he will need to go to Congress for approval on many of them, and there are also time limits attached to some of those measures.

“Given Trump’s public ire against previous court rulings and tariff criticisms, we would not be surprised to see a meaningful tariff escalation/response from the White House sooner rather than later,” wrote Chris Krueger, managing director at TD Cowen Washington Research Group. Krueger expects the 2026 tariff effort to be “all gas, some [temporary[ brakes … stay tuned.”