The court limits Trump’s tariff power… the White House hits back with a 15% blanket tariff… how will it all play out?… digging into the portfolio implications VIEW IN BROWSER Last month in the Digest, we laid out three possible ways the Supreme Court could rule on President Donald Trump’s global tariffs: - Path #1: The court upholds the tariffs
- Path #2: Tariffs are struck down (narrow ruling)
- Path #3: Tariffs are struck down (broad power ruling)
On Friday, we got our answer… In a 6–3 decision written by Chief Justice John Roberts, the Court ruled that President Trump exceeded his authority by using the 1977 International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on virtually every country. In plain English: IEEPA does not authorize tariffs. That puts us squarely in what we called Path #2 – a narrow strike-down that removes the tool, not the strategy. In general, it should be supportive for the market, though it won’t be the end of volatility. As a refresher, with Path #2, the Court didn’t issue a sweeping rebuke of executive power. It made a narrower point… If Congress intended to give the President the extraordinary power to impose tariffs under IEEPA, it would have said so explicitly. But it didn’t. So, President Trump’s tariffs are invalid. Of course, the story didn’t stop there. Within hours of the ruling, President Trump made clear he intends to find other ways to pursue his trade agenda. In a press conference Friday afternoon, he called the ruling “ridiculous.” He also said the administration has “very powerful alternatives” – and he quickly announced the first move… The economic consequences Before we get to Trump’s response, let’s review what the Court actually did. Trump’s tariffs weren’t small. According to the Tax Foundation, the IEEPA-based tariffs were expected to raise roughly $1.5 trillion over the next decade – representing about 70% of Trump’s second-term tariff program. So, these tariffs weren’t just symbolic measures or political theater. They were a massive macro lever, affecting corporate margins, consumer prices, federal revenue projections, and inflation expectations. The Court’s ruling effectively pulled that lever off the table in its most aggressive form. This is significant because it reduces the risk of sweeping, overnight escalation if Trump is displeased with a negotiation. And that lowers the probability of sudden, across-the-board cost shocks to global supply chains. But – importantly – the court’s decision does not mean tariffs are disappearing. And here, we can pick back up with Trump and his backup plan announced on Friday. First, the administration said it will maintain certain tariffs already in place under other authorities – such as steel and aluminum tariffs imposed under Section 232 (national security). Second, Trump said he will impose a 15% global tariff under Section 122 (after initially floating 10%). And one important reality check in all this… Economists at Goldman Sachs estimate that the net reduction in the effective tariff-rate increase since early 2025 is modest – from just over 10 percentage points to about 9. So, while the Supreme Court blocked the most sweeping tariff regime, trade pressure will continue – just under different legal authorities, and with the exact rate still subject to change. And that shifts our focus forward… | Recommended Link | | | | While Nvidia makes all the headlines, this little-known company is already beginning to surpass Nvidia’s stock gains as data center growth surges. I believe this stock could soar in the next 12-24 months, potentially leaving Nvidia in the dust. I want to give you the name, ticker and my full analysis today – because I know you certainly won’t hear about this stock in the mainstream financial media. Click here to get all the details… |  | | Two giant unknowns Even with the White House moving quickly, two major questions remain. - Do companies get refunds?
The Court did not address whether companies that already paid tariffs under IEEPA are entitled to refunds. Hundreds of companies have already filed protective lawsuits seeking refunds. Now, if refunds are ultimately ordered: - Billions could flow back to corporate balance sheets
- The U.S. Treasury could take a meaningful fiscal hit
- Liquidity would be injected back into the private sector
Justice Brett Kavanaugh (one of the dissenters) warned this could become a “mess” with significant fiscal consequences. President Trump himself suggested that refund litigation could drag on for two to five years. Here’s legendary investor Louis Navellier from last Friday’s Growth Investor Flash Alert: [Any refunds would come] after exhaustive legal fights, because the Supreme Court doesn’t provide remedies. That’s up to the lower courts, the federal courts and the appellate courts. So, even if refunds ultimately come, they won’t come quickly – which means this remains a legal overhang, but not an immediate liquidity event. - How durable Is the new tariff strategy?
Section 122 (the source of Trump’s 15% tariff proposal) is the fastest alternative, but it’s inherently temporary. If the administration wants to build a longer-term tariff framework, it would likely turn to: - Section 232 (national security) – which can impose durable tariffs but typically requires an investigation process that can stretch for months.
- Section 301 (unfair trade practices) – which also requires investigations and formal findings before tariffs are imposed.
Those paths are slower and more targeted than IEEPA. So, the simplest way to think about all this is: The Court didn’t eliminate tariff risk, but it shifted that risk from a sudden shock to structured process. Where does this leave the trade war? This ruling doesn’t end trade tension. It’s just “this version is gone.” President Trump has made clear he intends to continue using tariffs as a negotiating tool. He has also argued that without tariffs, the country would be “in trouble” – underscoring how central they are to his broader economic strategy. Remember, these tariffs weren’t just about revenue or inflation. They were diplomatic leverage. So, how does the Supreme Court’s ruling affect that leverage? Well, by constraining Trump’s ability to impose broad, immediate tariffs, the Court has altered negotiating dynamics with Canada, Mexico, the European Union, and China. Here’s Bloomberg from this morning: The Supreme Court’s nixing of US President Donald Trump’s “reciprocal” tariffs is throwing fresh confusion over the raft of trade deals negotiated by global partners as the inescapable reality of ongoing levies remains a threat. The European Union is poised Monday to freeze the ratification process of its agreement with Washington. Meanwhile, Indian trade officials postponed a trip to the US that would have aimed at concluding their interim accord. Foreign governments now know that sweeping tariff threats face legal limits. That could embolden some partners to negotiate more aggressively or delay concessions. Seemingly speaking directly to this possibility, here’s Trump from Truth Social earlier today: Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to. BUYER BEWARE!!! That response makes one thing clear… While the Court limited Trump’s legal pathways, it didn’t limit his willingness to escalate. So, what does it mean for your portfolio? Import-heavy retailers and consumer brands that rely on global supply chains and operate on tight margins could see a slight tailwind. Think companies like Williams-Sonoma (WSM), Nike (NKE), Deckers (DECK), and Lowe’s (LOW). A less chaotic tariff policy could mean better earnings visibility for companies that source abroad. Plus, it reduces one layer of potential inflation pressure, which in turn makes the Federal Reserve’s path marginally easier than it otherwise might have been. But still, a 15% tariff is not zero, so we’re measured in our optimism. On the flip side, domestic producers that benefited from tariff protection – particularly in select industrial and materials niches – may lose some relative advantage if global competition reasserts itself. Overall, this leans slightly constructive for diversified, long-term portfolios – not because tariff pressure has vanished, but because the rules governing it are clearer than they were a week ago. Wrapping up Friday’s Supreme Court ruling was significant because it removed the most aggressive tariff mechanism at President Trump’s disposal – forcing trade policy back into established statutory lanes. But that doesn’t mean smooth sailing... With the White House already pivoting to a 15% tariff, and Trump saber rattling, we should expect more volatility. Still, the win is that instead of sudden, sweeping escalation, we’re more likely to see more measured moves through defined legal channels. And for Wall Street – which hates uncertainty – that’s a win. We’ll keep you updated. Have a good evening, Jeff Remsburg | 
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