USD flows: Supreme Court decision on tariffs possible on February 20, but not certain
The Supreme Court has scheduled February 20 as a day for announcements. There is no certainty on which cases will see decisions announced for, but a ruling on the Trump reciprocal tariffs is a clear possibility.
Should the Supreme Court fail to make a judgement on February 20, further decision days are expected on February 24 and 25. When arguments were made on the tariffs, even some conservative justices appeared skeptical on the case for them, and betting markets see a roughly two in three chance that the Supreme Court will rule against them. We would not be surprised to see the Supreme Court deliver a mixed decision, leaving some tariffs intact but ruling against others. Uncertainty over the Supreme Court decision may have influenced today’s comments from Trade Adviser Peter Navarro denying reports that Trump was considering reductions in metal tariffs. The case against metal tariffs is easy to make given their inflationary consequences but these tariffs are not under threat from the Supreme Court ruling and if some tariff options are barred Trump he may double down on alternatives. With Trump’s tariff hikes bringing in approximately an extra $20bn per month in revenue a broad ruling against the tariffs would threaten the recent modest progress in budget deficit reduction.
