The U.S. trade landscape was turned upside down on Friday after the Supreme Court ruled that the Trump administration's tariffs imposed under the IEEPA were unlawful.
The decision effectively repeals nearly half of the current tariff regime, including reciprocal tariffs on Canada, Mexico, and China, sparking a complex reaction in the stock and bond markets.
While this decision provides an immediate respite for importers, it does not completely eliminate the possibility of future tariffs. President Trump has already announced a new global tariff of 10%. While this may look like a complete victory for free trade, LPL Chief Equity Strategist Jeff Buchbinder warns that the reality is much more complex.
8 Takeaways from the Supreme Court's Tariff Decision
1. Short-term boost for corporate America
Think of it as a random stimulus package. Since the IEEPA was the basis for about half of the Trump administration's tariffs, these costs are effectively disappearing overnight. For companies that were preparing for double-digit tariff rates, this is a sudden "tax cut" that should provide a healthy boost to profitability in the coming weeks.
2. The relief may not last long
Don't get too comfortable. President Trump has already made it clear that he is moving towards other laws, such as Section 122 or Section 301, to recover these taxes. LPL believes that up to 90% of these "illegal" tariffs may be restored by the summer. In other words, the tariffs are still there; they're just getting a legal makeover.