The U.S. Supreme Court is widely expected to strike down President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping global tariffs, marking a decisive turning point in U.S. trade policy, according to a majority of trade and legal experts polled by JPMorgan Chase. The ruling, anticipated before year-end, could dramatically reshape American trade relationships, reverberate through global markets, and trigger fiscal consequences for the U.S. government and businesses alike.

Legal Experts Expect High Court Rebuff

JPMorgan’s recent conference in London gathered leading trade lawyers, former government officials, and economists to debate the fate of Trump’s controversial tariff regime. The consensus: There is a 70–80% probability the Supreme Court will side with prior federal courts and curb the president’s authority to wield IEEPA for imposing broad economic sanctions in the form of global tariffs.

“While the three liberal justices are expected to oppose the IEEPA tariffs, Chief Justice John Roberts and Justice Amy Coney Barrett—both known for their pro-business leanings—may also vote against the administration,” the note summarized. “Justice Brett Kavanaugh is seen as the swing vote, having sided with the majority 90% of the time. Notably, none of Trump’s appointees has strictly followed partisan expectations on this issue.”

Lower courts, including the U.S. Court of International Trade and the Federal Circuit Court of Appeals, have already ruled against the administration, stating the duties violate constitutional limits. The appeals court delayed enforcement of its decision until October 14 to allow for Supreme Court review. The outcome is likely to shape trade negotiations and economic strategy for years to come.

Tariffs at the Heart of Trump’s Trade Policy

The bulk of Trump’s tariffs—more than 80% of those announced during his presidency—were enacted under the auspices of IEEPA, a law originally designed to let the president address extraordinary threats to national security through economic restrictions. Trump leveraged IEEPA most notably to implement reciprocal tariffs, which served both as punitive measures and as bargaining chips to force concessions in high-profile trade negotiations with partners like the European Union and Japan.

• The U.S.-EU agreement purportedly unlocked $600 billion in European investment and $750 billion in U.S. energy purchases, alongside massive American weapons sales.
• The U.S.-Japan deal included $550 billion in Japanese investments, with broad implications for auto, tech, and infrastructure sectors.

While some other tariffs, such as those on steel, aluminum, and autos, have been imposed under Section 232 of the Trade Expansion Act of 1962 (citing national security concerns), and Section 301 of the Trade Act of 1974 (targeting unfair practices), the loss of IEEPA authority would significantly undermine the scale and flexibility of Trump’s trade arsenal.

Financial Stakes: $165 Billion in Tariff Revenue at Risk

Should the Supreme Court invalidate Trump’s broad use of IEEPA, the administration faces the potential obligation to refund a significant portion of the $165 billion in tariffs collected through August 2025. Analysts estimate total annual revenue from Trump’s tariff policies approaches $300 billion to $400 billion—a sizable sum that the White House has touted as a partial remedy for the U.S. budget deficit, which surpassed $2 trillion in fiscal 2025 amid rising interest costs and federal outlays.

The prospect of mass refunds already has American importers and trade associations mobilizing. According to a recent analysis by the U.S. Chamber of Commerce, up to $150 billion could be returned to businesses affected by tariffs deemed illegal, injecting liquidity but also disrupting federal revenue forecasts. Law firms representing importers have begun filing claims in advance of a final court decision, while Congressional watchdogs warn of budgetary shocks in an already volatile fiscal environment.

Wider Impacts: Trade Deals, Strategy, and Market Uncertainty

The prospect of the Supreme Court overturning key planks of Trump’s trade regime has sent shockwaves through global markets. Major U.S. trading partners, including Canada, Mexico, and China, are reassessing their negotiating posture, with several threatening countermeasures if tariffs “snap back” or earlier trade deals are unwound. Meanwhile, exporters reliant on tariff-fueled market access are urging the White House to seek legislative fixes or alternative legal justifications.

Even if the administration pivots to other tariff mechanisms—such as sectoral duties on lumber, furniture, or technology—none offer the speed, breadth, or strategic leverage of IEEPA. “The potential loss of IEEPA tariffs does not end the tariff story, but fragments it,” JPMorgan’s note cautioned. Sector-specific tariffs are slower to implement, more vulnerable to litigation, and could invite targeted retaliation.

On Capitol Hill, the debate is already intensifying. Supporters of Trump’s approach argue that broad executive tariff authority is needed in a volatile geopolitical climate, especially given ongoing tensions with China and persistent trade deficits. Critics counter that overreliance on emergency powers undermines Congressional oversight and can lead to unintended diplomatic consequences. Congress may seek to clarify or rewrite the scope of IEEPA, but any legislative fix is likely months, if not years, away.

A Possible Lifeline for Trump’s Tariff Powers?

Despite momentum against Trump’s use of IEEPA, a minority dissent from Federal Circuit Judge Richard Taranto argued that the law does not meaningfully constrain a president’s emergency invocation of tariffs. This dissent, cited by analysts at Capital Alpha, provides a theoretical path for the Supreme Court to uphold at least some aspects of Trump’s approach, especially if the Court wishes to avoid sharply delimiting executive authority amid rising global tensions.

Legal scholars remain divided. Some see a possible compromise ruling, preserving narrow emergency powers while striking down the broadest applications. Others point to the increasingly unpredictable record of the current Supreme Court, particularly on questions involving presidential war and economic powers.

Business Community Awaits Clarity

For U.S. manufacturers, retailers, and supply chain operators, the Supreme Court’s coming decision represents a pivotal moment. “For years, companies have managed risk amid shifting tariffs and retaliatory duties,” said Jennifer McCullough, a trade policy director at the National Retail Federation. “Now, the stakes are even higher, and everyone is bracing for both legal and financial whiplash.”

Federal officials have quietly prepared contingency plans in case of a defeat at the high court, including guidance for Customs and Border Protection and the Internal Revenue Service to handle possible refunds and adjust compliance frameworks. At the same time, advocacy groups and business coalitions are pressing the White House and Congress to provide a predictable, rules-based approach to tariffs that avoids sudden disruptions.

Looking Ahead

The Supreme Court’s final ruling on the IEEPA tariffs—expected by the end of 2025—will almost certainly have ripple effects on global trade, U.S. diplomatic relations, and the domestic political debate. As the world’s largest economy faces heightened fiscal pressures, geopolitical competition, and a presidential election cycle, the outcome will shape both policy and politics for years to come.

This remains a developing story as the justices deliberate and stakeholders across business and government await clarity on the future of U.S. tariff authority.