The Supreme Court of the United States is preparing to deliver a decision on the legality of tariffs imposed under former President Donald Trump’s administration, with the ruling anticipated as early as Friday, January 9. The case scrutinizes the use of the International Emergency Economic Powers Act (IEEPA), a statute dating back to 1977, which Trump's administration cited as the legal foundation to impose tariffs on various countries.
Since Trump took office in January 2025, his administration employed the IEEPA to levy tariffs as a tool for economic and strategic policy, a move that has sparked extensive debate and market attention. Traditionally, the IEEPA has been used to address direct national security emergencies rather than to apply tariffs on active trading partners. This novel application has led to significant legal challenges questioning the scope of executive authority and its interaction with Congressional powers.
The Supreme Court, which comprises a 6-3 conservative majority, has hastened proceedings in this case, opting for an early opinion day upon returning from recess. The scheduled opinion release time is projected for 10 a.m. Eastern Time on Friday, though delays and extended deliberations cannot be ruled out. This expedited timeline suggests the high importance and urgency the Court places on resolving the issue during the current session.
Legal Issues Centering on IEEPA and Executive Power
The core legal contention revolves around whether the president has the authority to impose tariffs on foreign nations using the IEEPA. Opponents argue that no precedent exists for such usage; no president before Trump has adopted this specific law as a basis for tariff enforcement. Critics contend that utilizing the IEEPA for tariffs represents an executive overreach that encroaches upon powers reserved for Congress by the Constitution, notably in taxation and trade regulation.
Comparative legal analysis highlights parallels with a recent Supreme Court ruling concerning the deployment of federal troops in Chicago. That ruling struck down federal authority where it exceeded statutory limits. The Peterson Institute for International Economics notes these overlaps, emphasizing constitutional powers vested explicitly in Congress over tariff-setting authority. The Court's stance in the Chicago case, marked by concerns over intrusion on legislative authority, could foreshadow similar reasoning against the tariffs in the pending case.
The Court may issue a comprehensive ruling invalidating all tariffs imposed under the IEEPA or deliver a more nuanced decision that retains some tariffs while restricting future executive action. Additionally, justices must confront questions pertaining to restitution: if tariffs are declared unlawful, mechanisms for returning collected funds—paid by countries, businesses, and consumers—must be addressed. Consumers have also experienced indirect cost increases as a consequence of these tariffs.
Post-Ruling Scenarios and Administrative Workarounds
A ruling against the Trump administration’s tariff approach does not imply an absolute end to tariffs. Treasury Secretary Scott Bessent has acknowledged the possibility of other legislative frameworks being invoked to impose tariffs if the IEEPA authority is curtailed. Alternative statutes such as the Trade Act of 1974 or the Trade Expansion Act of 1962 could serve as legal bases for tariff application in the future, according to financial news reports.
Market Expectations and Prediction Markets
Financial prediction markets reflect considerable interest and varying probabilities regarding the Supreme Court’s decision. Platforms like Kalshi and Polymarket have attracted millions of dollars in wagers on the timing and outcome of the ruling. On Kalshi, the likelihood of the Court upholding Trump’s tariffs stands at approximately 28%, marking a decline from nearly 48% in November and 36% at the close of 2025. Conversely, a majority (72%) bet on tariffs being overturned.
Further, participant forecasts on Kalshi about how many justices will support tariffs highlight expectations of a narrow minority in favor, with the most popular estimate being three justices voting to uphold tariffs. There remains a small probability that none or all of the nine justices will side with tariffs.
Industry and Stock Impacts to Monitor
Market analysts identify this rul ing as a pivotal event that could influence investment and sector performance in 2026. Jay Woods, Chief Market Strategist at Freedom Capital Markets, has identified the tariff case as a major factor in market direction for the early part of the year, noting that the ruling improves clarity on trade policy, which had lingered as a market overhang.
Specific companies have already experienced tangible effects and have engaged in litigation to recover tariff payments. Costco Wholesale (NASDAQ:COST), for example, has filed lawsuits seeking repayment. Nike Inc. (NYSE:NKE), impacted by import tariffs, saw significant pressure on its share price and could potentially benefit from a reversal of the tariffs.
Other firms such as subsidiaries of Toyota Motor (NYSE:TM), Revlon, Del Monte Fresh Produce, Constellation Brands (NYSE:STZ), Deere & Company (NYSE:DE), and 3M Company (NYSE:MMM) have also reported financial consequences attributed to these tariffs. The construction, industrial, apparel, and manufacturing sectors are among those most affected. The ruling could trigger volatility in sector-specific exchange-traded funds (ETFs) and cause pronounced price movements in individual company stocks depending on the result.
Outstanding Legal and Economic Ambiguities
Despite anticipation, several uncertainties remain leading into the ruling. It is unclear how exactly the Court will balance executive authority against legislative prerogatives, or to what extent tariffs already collected will be reimbursed to importers and consumers. The method and timing for any potential restitution have yet to be outlined.
Moreover, should the Court strike down the tariffs, the administration’s response and potential invocation of other trade statutes further complicate the trade policy environment. This creates an ongoing atmosphere of uncertainty for investors and companies reliant on importing goods from countries subject to these tariffs.
Given these factors, market participants are advised to closely monitor developments and prepare for potential sharp adjustments across industries sensitive to import costs and international trade dynamics.