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Markets could face near-term volatility in the wake of the Supreme Court’s decision to strike down tariffs levied under the Emergency Economic Powers Act (IEEPA). The ruling creates a complex landscape as markets adapt to multiple unresolved issues, including raised global tariffs, investigations and potential refunds.
The Supreme Court ruled 6-3 that the administration's use of IEEPA to impose country-level tariffs was unlawful, a ruling that was overall directionally consistent with market expectations but went further than expected in overturning all the IEEPA tariffs.
Unresolved was the issue of potentially refunding an estimated $175 billion in tariff revenue, which was kicked down to a lower court. The process for firms to receive tariff refunds will be lengthy and challenging, with litigants needing to bring individual cases or participate in class action versus automatic refunds.
Also unaddressed was the administration’s strategy to reverse engineer the tariffs through alternative tariff authorities, including the subsequently announced 15% global tariff through Section 122 and Section 301 investigations, which could make way for more durable tariffs. These alternative authorities come with varying procedural, timing and rate‑related constraints, which introduce potential variability to tariff rates in the interim.
The litigation did not challenge sectoral tariffs, including autos, steel and aluminum, because they were crafted under a different legal basis, known as Section 232. Thus, the sectoral tariffs can remain in place.
Ultimately, despite the near-term uncertainty and potential volatility, the long-term outcome remains unchanged: Tariffs are here to stay, and previously negotiated deals are likely to remain in place.
However, bearing in mind widespread voter discontent with tariffs in a midterm election year, Raymond James Chief Investment Officer Larry Adam expects future tariff decisions will be milder than last year's. “There are already signs of some walk-backs, and the Supreme Court decision provides another opportunity for an off-ramp,” Adam said. “While it’s too early to revisit our corporate earnings and GDP growth assumptions for 2026, there could be slight upside to both.”
While there are individual examples of US companies that directly benefit from tariffs – steel mills and solar panel manufacturers, for example – corporate America is mostly opposed to protectionism. Any reduction in tariffs – whether from trade deals, unilateral White House decisions or legal action – is, broadly speaking, welcome news for companies and positive for corporate earnings.
Earnings in 2025 ultimately came in much better than the pessimistic predictions at the time of the trade war’s peak in April and May. Corporate America’s adaptation to tariffs – comprising flexible supply chain management, internal cost efficiencies and price hikes – has been, on the whole, successful.
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