The U.S. Supreme Court has once again declined to rule on the legality of tariffs imposed by former President Donald Trump under the International Emergency Economic Powers Act (IEEPA). The decision keeps a key pillar of current U.S. trade policy unresolved and extends uncertainty for businesses, investors, and global supply chains.

What happened
The court concluded its latest session without issuing a verdict, despite expectations that clarity could emerge. The core issue is whether the president can impose tariffs unilaterally using emergency powers without congressional approval. For now, the delay means existing tariffs remain in force.

Why this matters

1. Corporate balance sheets
   Tariffs have pushed up input costs for manufacturers and importers. Companies remain unsure whether tariffs will be upheld, struck down, or replaced under a different legal framework. This uncertainty complicates pricing strategies, inventory planning, and capital allocation decisions.

2. Fiscal implications
   Since April 2025, tariff collections have become a meaningful source of federal revenue. If the court eventually rules against the administration, the government could face reimbursement claims from importers, creating a potential fiscal strain and disrupting budget projections.

3. Trade and geopolitics
   The tariffs coincided with the U.S. trade deficit falling to its lowest level since 2009, strengthening the political case for their continuation. A negative ruling could weaken executive leverage in future trade negotiations and reshape how trade policy is enforced.

What the administration says
Trump and senior officials maintain that alternative legal routes are ready if needed. These could include other trade statutes, national security justifications, or seeking congressional backing, though the latter appears less likely in the near term. None of these options offer the same speed or unilateral control as IEEEPA, making the court’s eventual ruling pivotal.

Market takeaway
Uncertainty remains elevated for trade-sensitive segments such as industrials, consumer goods, autos, capital goods, and global supply chains linked to China. For markets, this prolongs volatility in exposed stocks, FX swings tied to trade expectations, and cautious corporate guidance.

Bottom line
Until the Supreme Court delivers a ruling or the administration formally shifts to a new legal framework, tariffs stay in place. However, the risk of a sudden policy reversal remains, keeping investors and businesses on edge.