The supreme court vs. the president: what it means for the market

EUR/USD

Key zone: 1.1750 - 1.1850

Buy: 1.1850 (after retesting the 1.1800 level) ; target 1.2050-1.2150; StopLoss 1.1780

Sell: 1.1700 (on strong negative fundamentals) ; target 1.1500; StopLoss 1.1770

The U.S. Supreme Court ruled that Trump violated federal law by imposing large-scale tariffs unilaterally. The verdict: a president does not have the authority to set tariffs “without limits in amount, duration, or scope” absent a direct and clearly articulated mandate from Congress.

The case concerns tariffs introduced under the International Emergency Economic Powers Act (IEEPA) of 1977 — the “emergency economic powers” regime. Trump declared the U.S. trade deficit a national emergency and separately cited threats related to fentanyl supply chains. The Court stated that the IEEPA mechanism was not designed for the imposition of such sweeping tariff measures and does not grant the president the necessary authority to do so.

However, the tariff war continues — and the market has received a fresh source of risk.

Recall:

The market reacted not to the cancellation of all tariffs, but to the fact that the key mechanism for imposing them was declared unlawful. This reduces the likelihood of sudden decisions where tariffs are introduced quickly and without lengthy procedures.

At the same time, the Supreme Court did not close the issue entirely. The practical phase now begins: which specific tariffs fall under the ruling and how their revision will proceed. A particularly sensitive issue is the potential reimbursement to importers. The Court effectively referred this matter to lower courts, meaning an automatic and rapid refund should not be expected. More than $175 billion may have been collected under these tariffs, and additional litigation around this amount is likely.

And What Is the Result?

In response to the Court’s decision, an angered Trump hardened his stance and raised the universal tariff to 15% under Section 122 — up from the original 10%. However, emotions are a poor guide in policymaking.

• The new universal tariff has unexpectedly benefited countries previously subjected to the harshest criticism — such as China and Brazil. Their average tariff rates now stand below previous levels.
• Strategic U.S. allies — the European Union, the United Kingdom, and Japan — face additional tariff pressure, particularly in the technology and industrial sectors.
• Countries that have not finalized trade negotiations with the U.S. are suspending dialogue, opting for a wait-and-see approach.

Market reaction has been mixed. Amid rising cryptocurrency prices, demand for risk assets broadly increased. The dollar weakened, the U.S. Dollar Index declined, and Treasury yields rose — reflecting expectations that overall tariff pressure on the economy may ease.

The Supreme Court’s decision is important not as a political episode, but as a factor that changes the speed and scale of potential market shocks.

• The European Parliament had planned to ratify an agreement but now intends to reconsider its position; the European Commission is awaiting clarifications from the U.S. and urges Washington to adhere to previously reached arrangements.
• South Korea continues consultations and is not rushing ratification.
• India is not only postponing ratification but also delaying a visit to the U.S. pending greater clarity.
• For many countries, paying a fixed 15% appears more advantageous than accepting stricter terms — 30% plus investment commitments and purchases of American goods.
• The new tariffs may remain in effect for only 150 days, and Congress lacks sufficient support for their extension.

The introduction of global tariffs now becomes significantly more complicated: such measures require direct Congressional approval rather than reliance on personal interpretation or emergency powers. This reduces the risk of sudden tariff shocks and gives markets more time to adapt.

Nevertheless, full uncertainty has not disappeared. The Trump administration retains alternative legal tools, meaning the tariff issue could return to the agenda at any moment. The market has gained a pause — but not a guarantee of lasting stabilization.

So we act wisely and avoid unnecessary risks.

Profits to y’all!