Donald Trump, the current president of the United States, is present 1 of the key figures influencing the formation of global geopolitics. His re-entry to power in 2024 raised many controversy and concerns, which the time showed mostly proved justified. 1 of the most crucial events during his over an yearly word was the announcement of a wide tariff package for goods imported into the US. The tariffs were announced on April 2, 2025, and Trump called this day Liberation Day (Liberation Day). Customs are now inactive a hot topic, as time has shown the president of the United States is openly utilizing them as a means of diplomatic force to accomplish his own political and economical objectives.
Although Liberation Day is treated as 1 of the most extremist and widely commented tariff packages in U.S. history, present remains a fundamental question.
Are these fares even legal?
The United States ultimate Court is about to talk on this matter. As it turns out, the situation is not clear at all, and a possible decision by judges may affect financial markets, including stock, bond or dollar quotations.
International Emergency economical Powers Act (IEEPA)
In order for customs tariffs to enter into force, Trump had to have any legal basis. In this case, the president referred primarily (but not only) to the 1977 Act on global Exceptional economical Rights (IEEP). This law gives the president a wide scope of power in emergency situations concerning the economy and trade. And so on April 2, 2025 (The Day of Liberation) Trump announced an extraordinary economical situation (national emergency), citing, among another things, that abroad trade practices and a immense trade deficit constitute a "crisis" for the sovereignty, competitiveness and national and economical safety of the US.
The administration’s leaning on this bill immediately caused much controversy. As we can read, this act traditionally served for financial sanctions (freezing assets, financial blockades) against hostile countries alternatively than for mass imposition of duties. In the event of a state of emergency, the president may, according to this law, ‘examine’, ‘regulate’ or ‘ban imports’. The word ‘duty’ or ‘tax’ does not appear in the document. Moreover, critics point out that the constitutional power over customs tariffs belongs exclusively to legislature and cannot be full delegated to the president without strict restrictions.
Court vs. Trump
A breakthrough in this context was the suit of a tiny household wine import company mainly from Italy and France – VOS Selection. This company, along with another tiny importers, brought a suit before the U.S. Court of global Trade (CIT) in April 2025, citing the arguments set out above, i.e. in short the President's excess of powers.
They accused Trump administrations of causing direct financial harm to companies – higher costs of importing European wines, which increased prices, reduced sales and threatened the existence of a tiny business.
It's important. On May 28, 2025, the CIT court issued a key judgement in this case, recognising duties as illegal and beyond the powers of the president under the IEEP Act. Trump's administration appealed against the CIT judgement to the United States Court of Appeal for the national territory (CAFC). However, this court upheld the conviction of the first instance, confirming that the president could not impose specified extended duties without the consent of Congress. The case is presently pending by the United States ultimate Court (SCOTUS). proceeding of the parties took place on 5 November 2025 and is now awaiting a final ruling.
While everyone expected to be dissolved on 20 January at the last sitting of the ultimate Court, the ruling on this substance was not issued. As we can read, the next session at which the ruling may begin on 20 February this year. It is besides uncertain that a judgement will be given this time, as the court does not inform in advance which day it will issue a judgement in a circumstantial procedure. Although the substance of customs is urgent, experts indicate that a final decision may be taken at any time until the end of June 2026, erstwhile courts issue the most rulings before going on a summertime break.
Will the current US tariffs be cancelled?
Although we inactive gotta wait for the verdict in this case, present it is estimated that Trump has small chance of winning. If we look at a popular polymarket app, present the chances of a court supporting Trump's tariffs are only 31%.
As you can see on the chart, the situation was very different until November last year, erstwhile the above-mentioned proceeding of the parties before the U.S. ultimate Court took place. As it now consists of as many as 6 conservative judges (designated by Republican organization presidents) and 3 Liberals (designated by Democratic organization presidents), it was expected that the substance would turn out as Trump thought – by the way, it should be the most dominated by the right-wing judicial lineup since the 1930s. However, in the hearing, 3 conservative judges joined 3 Liberal judges in asking very skeptical questions, which now powerfully affects Trump's perception of winning. Conservative judges primarily supported the uncertainty that the IEEPA actually gives the president the right to impose specified extended duties without the express consent of Congress. According to the U.S. Constitution, legislature (legislatorship) has the right to impose taxes and duties. Giving this power to the president would mean taking distant her authority, which is straight elected and accounted for by the nation.
Trump's customs tariffs – will the US government return the funds to the injured importers?
If the court ruled that tariffs were illegal, importers could claim a refund of up to USD 150 billion.
However, commercial law lawyers inform that reimbursements of customs duties may be delayed, depending on what decisions the ultimate Court will take. We may be dealing with the designation of duties as illegal, and the case may be referred to the Court of global Trade (CIT) in order to find the reimbursement process. A committee may be appointed to manage more than a 1000 court cases concerning reimbursements, which is simply a complex process. We can yet see individual cases. All these scenarios combine 1 denominator – this could mean months of legal debates and further appeals, which will make the full process last for years.
What does Trump say?
Trump: “It would take many years to find how much we are talking about, and even who, erstwhile and where to pay... It would be a complete mess that would make repayment impossible for our country."
This argument does not go completely to traders and customs experts who repost that the process should be simple, due to the fact that all the duties paid are marked in item in the systems.
Let us decision on to the most crucial topic.
So are we approaching the end of Trump's tariffs, thanks to which the president of the United States has so far managed to make geopolitics according to his vision?
Trump contingency plan
Currently, Trump's administration is certain of its triumph – or at least creates specified appearances. Scott Bessent, US Treasury Secretary, who stated in 1 of his fresh interviews that it is “very unlikely” that the ultimate Court will regulation against Trump. He besides added that even if the administration loses, fresh duties will enter into force within 24 hours of the sentence, utilizing another powers. This was besides confirmed by 1 of Trump's chief economical advisers, Kevin Hassett, who until late was the lead candidate for the fresh FED president: "(customs) will be replaced immediately to accomplish the same effect".
Effects on the US budget
If Trump's tariffs were indeed considered illegal, the government would gotta return around US$150 billion to entrepreneurs. Given that US budget expenditure in 2025 amounted to US$7 trillion, it is evident that this is not an amount that could ruin the US budget. All the more so, as experts point out, the payouts would most likely spread heavy over time.
Effects on the investor
At the very beginning I would like to point out to you that this year for the stock markets starts very much like the erstwhile year. We see the US dollar weakening due to many Trump actions (customs tariff, attack on Fed independence, possible coordinated intervention with the Bank of Japan to halt the sale of nipponese yen, or the ongoing dispute over Greenland). In specified an environment, capital migrates to markets outside the US, which, as in the erstwhile year, are doing better than the US's main index (marked with a navy line on the illustration below).
The direction in which the marketplace will follow in the event of Trump's failure is not conclusive and will mostly depend on his subsequent decisions.
If, as announced, the current administration replaces the existing tariffs in a short time, the script may be akin to that of 5 November last year, erstwhile the proceeding of the parties on duties took place. The skeptical attitude of the judges towards the arguments of the presidential organization then translated into the fall of the S&P 500 index, the weakening of the dollar (DXY) and the sale of American bonds, entering the communicative of the alleged "Sell America". However, I believe that there would be no sharp declines (panics) as this script is already mostly valued by the market.
What if the administration is incapable to rapidly introduce fresh duties?
It would be a temporary wind in sails for US importing companies, which could not only reduce their costs by improving their margins (no customs duties), but could besides number on a partial refund of funds from illegal tariff titles.
With respect to the dollar and the bonds, in this case there are inactive a number of Trump actions that can effectively curb their growth, specified as the effort to take over the Fed (attack on the independency of the central bank) or further Trump territorial claims that fall into the unpredictability of American politics – only last week we heard about the 2 European funds that sold US bonds precisely for this reason. Will it turn into a broader trend? At this point, we don't know, but 1 thing is known.
Trump can contribute effectively to this.
Author: ]]>Krzysztof Miazga]]>
Source: ]]>IndependentTrader.pl - independent financial portal]]>
Original text: ]]>https://independenttrader.pl/trump-vs-sad-highest-us-are-tariff-will be-refused/]]>
