I’ve been thinking about the president’s second-term tariff policy for about 8 months now. Even before the April 2nd liberation day, they appeared unlawful to me. I wrote about it a few times; I tracked down Neal Katyal, the attorney who argued the appellate case to be a guest on Masters in Business.
It didn’t seem to me like enough of Wall Street was paying close attention to this.
Today, I listened to the arguments at the Supreme Court (via C/SPAN). I haven’t practiced law in three decades, but you don’t need to be an active attorney to recognize a beatdown when you hear one. Had this been a boxing match, it would have been stopped on a TKO (technical knockout).
I’m going to go out on a limb: All (or nearly all) of the Trump tariffs will be overturned by SCOTUS as unconstitutional. It should be 9-0, but several of the justices have given up any pretense of being neutral, nonpartisan arbiters; my guess is 7-2 or (maybe) 6-3 will affirm the Court of Appeals decision in favor of overturning the tariffs. If you surveyed Constitutional Law professors, I bet it is close to 95% agree tariffs are the province of Congress (as per the Constitution, Article 3, Section 8), and that these Executive orders are unconstitutional.
Considering the plaintiffs have won at both trial (Court of Trade) and at the full en banc hearing in the DC Court of Appeals, this isn’t a big surprise. I suspect any company that paid an unconstitutional tariff will be entitled to a refund. Look at the companies that suffered the largest stock price damage in the first weeks of April; I don’t imagine consumers will be able to easily get a refund.
Perhaps Wall Street has overlooked this, but the market has caught on. It’s very likely that a large part of the rally over the past 6 months was the market anticipating this outcome.
Before I get too far ahead of myself, let’s wait for the SCOTUS decision in Trump vs VOS Selections. Hopefully, we see this before the new year…
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For those interested, lots of useful links follow, including audio of the SCOTUS arguments, interesting recent articles, and my prior discussions on the topic as well.
Previously:
Might Tariffs Get “Overturned”? (July 31, 2025)
The Muted Impact of Tariffs on Inflation So Far (July 17, 2025)
Are Tariffs a New US VAT Tax? (March 31, 2025)
MiB: Special Edition: Neal Katyal on Challenging Trump’s Global Tariffs (September 3, 2025)
Neal Katyal on Challenging Trump’s Global Tariffs (September 8, 2025)
Which States Could Suffer the Most From Trade War Tariffs? (September 16, 2019)
See also:
SCOTUS Bench Memo Trump Tariff Case: Separation of Powers, Delegation, Emergencies (Just Security, November 3, 2025)
The Court Must Decide If the Constitution Means What It Says (The Atlantic, November 5, 2025)
Mystery conservative donors bankroll opposition to Trump’s tariffs (Washington Post, November 5, 2025)
The Supreme Court should liberate us from ‘liberation day’ (The Hill, 11/04/25)
Striking Down the Tariffs Won’t Hurt Anybody (Cato, October 28, 2025)
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Disclosure: Both I and RWM clients own the full run of these industrials via ETFs, mutual funds, or direct indexing, including individual stocks or options: Caterpillar, Deere, Ford, GM, etc.
