Supreme Court Ruling on Trump Tariffs: Potential Market Boost?

The United States Supreme Court will rule on the legality of President Donald Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA), with a decision expected as early as 14 January 2026. Lower courts have determined that the tariffs, which target China, Canada, Mexico, and other countries, exceed presidential authority, but they remain in effect pending a final ruling. President Trump has warned of economic devastation, claiming that refunds may cost "trillions" of dollars and leave the United States "screwed" if overturned.

Case Background

Trump's tariffs, which include reciprocal levies and those imposed on important trading partners, are based on emergency powers that have never before been utilized for import taxes. Challengers allege that this exceeds Congress's constitutional trading jurisdiction. The Court postponed its expected verdict last week, heightening uncertainty, but experts predict limits on executive power.

Market Impact Scenarios

A verdict against tariffs might eliminate trade obstacles, lowering supply chain costs and inflationary pressures, potentially boosting global markets. Risk assets may climb as corporate margins improve and investor sentiment rises, with emerging nations such as India benefiting from solid US demand.

Upholding them, on the other hand, sustains the status quo, ensuring policy continuity while prolonging trade conflicts. Nasdaq forecasts a market rally if tariffs are repealed, citing reduced uncertainty.

Global and Indian Ripple Effect

Indian exporters in IT, pharmaceuticals, and chemicals could benefit from freer US trade, as well as FII inflows into equities. Sectors susceptible to global friction will benefit the most from a pro-trade outcome.

While no verdict has been published, a strike-down might spark a broad market rally by signaling predictable trade policy.​